For the 2nd day in a row the market finished up strongly on Thursday. Over a year ago on the blog I posted a simple study that looked at S&P performance following two consecutive days where it rose at least 0.75% and closed below the 200ma. At the time the 0.75% hurdle was a good sized 1-day move. In the last year a move of that magnitude hasn’t been significant. Still, I thought it would be interesting to go back and run the results again using the same parameters.
The fact that the 0.75% hurdle has become easier to achieve hasn’t weakened the bearish influence of the setup. I attribute a large part of reason for this to be the exceptionally choppy environment the market has been in over the time period.