A Pattern Suggesting A Pullback

Large gaps up like yesterday that reach new highs, go unfilled and finish above the open don’t often follow through over the short-term. Below is a study that appeared in last night’s Quantifinder that demonstrates this.

This study suggests a fairly potent downside edge over the next 3 days. Occurences are a little bit low but with only 25% of instances trading higher 3 days out and an average return of -1.4% I believe it is worth taking under consideration.