Why Friday’s Weak Bounce Was Not Encouraging

The first day of a bounce from an oversold condition can often provide strong hints about how the next several days are likely to perform. Weak bounces like we saw on Friday tend to have a much lower success rate over the following days.  The study below appeared in Friday’s Quantifinder.  It exemplifies this concept.

The numbers here suggest a decent downside edge that has generally played out over the next 3 days.