Monday, July 13, 2009

Trading Monday 7/13: Bias Positive

Two signals tonight.

1. 20MA has crossed below 50MA on the S&P500. You would think this would be contrued as a negative, and it may - however history has shown that the market has a tendency to close up within 3 days of such 'cross unders'. (70% of the time, compared to 51.74% 'at any time' odds)

2. NDX closed up, while S&P closed down and delta between NDX and S&P is more than 0.70%. The market has a tendency to close up when such divergences occur, which a historical probability of 78% over a 3 day timeframe.

With futures trading significantly lower as i write this, it would seem that a lower open tomorrow may present a short term buying opportunity.


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