Monthly Archives: February 2011

SPY and QQQQ Probability for an Up Day – Wednesday, February 23, 2011

After a sizeable drop like yesterday’s, it is natural for traders to wonder if the negative momentum will continue  next day or there will be an up day. Based on historical data for SPY (since 01/1997) and QQQQ (since 01/2000), the probability … Continue reading

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Price Pattern Trading – Part I

In part I of this article we will study the basic structure of price patterns and in Part II we will discuss advanced techniques of using price patterns to develop trading systems.                            Figure 1 shows an example of the a price … Continue reading

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Is the Dow 30 Overbought?

The 14-day Relative Strength Index of the Down Jones Industrial average shows a reading of 78.93 as of the close of yesterday, Friday, February 18, 2011. Since the beggining of  year 2000, there were seven more times when the 14-day RSI reached or exceeded … Continue reading

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Models, S&P 500 Returns and Related Folklore

According to Investopedia, the Sports Illustrated Swimsuit Issue Indicator was first coined by the Bespoke Investment Group. This indicator suggested, when it first appeared, that when the cover model is an American the S&P 500 has a higher probability to generate a yearly … Continue reading

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Where is the Market Heading?

Since the low of March 2009, The Dow Jones Industrial Average has gained roughly 89% as calculated based on yesterday’s close. In the same period, the S&P 500 index rose about 100%. This spectacular rise in stock prices has occurred during … Continue reading

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Price Action Lab Blog Offer

For a limited time only with every purchase of a professional license of Price Action Lab customers will receive the three books by Michael Harris  free of all charges (no s&h charges) anywhere in the world. For details follow the … Continue reading

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Who Needs the Trading Day? Part Two

I already demonstrated in another article the flaws in the Bespoke study about buying SPY at the close and selling it on the next open. Basically, that study did not account for commissions and this effect alone completely changed the picture … Continue reading

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Who Needs the Trading Day? I do

A study last month in the Bespoke blog concluded that the simple strategy of buying on the close and selling on the open of next day would have significantly outperformed buy and hold since the launch of SPY ETF. The Bespoke results were published in … Continue reading

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