I recently looked at one-day selloffs of over 5% and found them to have an upside edge. Tonight I looked at rallies of 5% or greater. For the S&P the sample size is small but there has been a bit of a downside bias since 1960:
Of the 11 instances, the only one that didn’t close below the close of the 5% day within the next 4 days was the 5/27/70 occurrence.
A couple of things to note: First, 8 of the last 9 have closed lower. Second, the lower closes have generally been tame – both in relation to the 5% up day and compared to the instances that continued to rise the next day.