Daily Commentary - Posted on Thursday, July 2, 2009, 9:21 AM GMT +1

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Jul Thursday 2

Trading the Odds the Session Before 4th of July

This is a follow-up on my posting Trading the Odds on Thursday – July 2, 2009.

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I received several emails tonight asking if -and to what extend- the fact that July 2 will be the last session before Independence Day will have any impact on today’s outlook (regularly -correctly- stating that the last session before the 4th of July holiday shows a bullish bias).

Table I shows the ES (E-MINI S&P 500) intraday performance (since 01/02/1990) concerning the open, high, low, close (compared to the previous’s session close) and close versus open on those sessions (in this event Thursday, July 2) immediately preceding the 4th of July holiday .

2009-07-01-ES-4JulyAlthough the 4th of July holiday shows a bullish bias on the close (and concerning a close above the open as well) with a profit factor (sum of all profits divided by the sum of all losses) of 1.86 compared to an at-any-time profit factor of 1.07, chances for a higher or lower close are more or less even, and the session prior to the 4th of July holiday shows an especially remarkable tendency of being a very ‘quiete’ session. Out of those 19 x 5 = 95 performance figures listed above there are only 11 figures which exceed the +/- 1.0% bar (open/high/low/close/close vs. open), and there is not a single figure exceeding the +/-2.0% bar. Additionally the average winning AND the average losing trade on those sessions immediately preceding the 4th of July holiday always undercut the respective at-any-time winning and losing trade on the open, the high, the low, the close and close vs. open concerning their magnitude of change (means the average winning and the average losing trade are always lower than their respective at-any-time counterparts for a regularly very ‘quiete’ session).

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Bottom line:

Although the 4th of July holiday historically shows a bullish bias on the close, don’t expect too much movement and/or excitement today on any side (above and below Wednesday’s close) of the market.

But from my perspective I give the slightly negative bias concerning today’s outlook based on those setups which were triggered on Wednesday’s close more weight than than regular slightly bullish bias on those sessions immediately preceding the 4th of July holiday.

Successful trading,

Frank

P.s.: I’ll regularly make some intraday updates as well using Twitter. If you’re interested in, please have a look at the blog during the trading session as well or subscribe directly to Twitter (recommended).

Disclaimer: Short ES (E-MINI S&P 500) at time of writing.

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