The study below was from the Quantifinder yesterday and was last seen in the 1/26/11 subscriber letter. It suggests that when SPY closes strong (in the top 10% of its range) but still only manages a small gain on the day, that the next day has a downside tendency. Stats are updated.

As you can see, the bearish inclination appears to max out after just 1 day. And while not terribly large, the edge has been fairly consistent over time. Just a little pattern to keep in mind today and in the future…