The Strong Edge Suggested By Similar Pullbacks In The Past

In last night’s letter I decided to look at other times where a 3-day pullback was coming off a 50-day high and was strong enough to put SPY below its 10ma, but not strong enough to make it close at a 10-day low. These filters seem to fairly represent the current situation, and the results were quite compelling.

Under these circumstances, it appears bounces have been both reliable and powerful.