The study below is one that appeared in the Quantifinder yesterday afternoon. There were a few like it. This study looks at big gaps up from 50-day lows that go unfilled and close above the open.
The suggestion here is that the overwhelming 1-day bullishness (big gap and move higher) immediately after a new low is probably overdone, and unlikely to carry through for a 2nd day. I believe this study deserves some consideration, but I would also keep in mind that based on other indicators (like the elevated CBI, which closed at 67 on Wednesday) the bounce should have further to go over the course of the next several days.
Related Quantifiable Edges Studies
- Performance After a Gap-and-Go Day in QQQ and SPY: Quant Study
- Breakaway Gaps: Unfilled SPY Gap on a 50-Day High Breakout
- Large SPY Gap Up Near a 10-Day High: Intraday Selloff Tendency
- Unfilled SPY Gap Up + Close Above Open After Oversold: Bullish Edge
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