One notable bit of evidence that emerged on Wednesday was the fact that it qualified as an IBD Follow Through Day (FTD). I have done a lot of research on FTDs over the years. Much of that research can be found on the blog. Here is a link.

The failure rate here is substantial no matter how you look at it. A short-term downside edge is suggested which largely plays out in the 1st 2 days. Every instance closed below the entry price over the next few days. And these FTDs have demonstrated a paltry 20% success rate. All these stats are impressive and point to a downside inclination over the next few days.

(Definitions for “successful” rallies as well as FTD determination criteria can be found in this post from 2008.)
 

Related Quantifiable Edges Studies

• IBD Follow Through Days Quantified: Summary of the 4-Part Study
• Breadth Strength on IBD Follow Through Days: Does It Boost Success?
• IBD Follow Through Day With a 20-Day SPX High: Bullish Edge Study
• IBD Follow Through Days: Are They Actually Predictive? (Part 1)

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