S&P 500 Index - From record high to a close below 200-day moving average within 20-days - What happens next

Probability Trader


S&P 500 Index - From record high to a close below 200-day moving average within 20-days - What happens next? We note that the S&P 500 Index has moved from a record closing high (18th September) to a close below its 200-day moving average (13th October) all within a 20 trading day interval. This type of market behaviour is somewhat strange having only occurred on 9 previous occasions since 1950 (non-overlapping - at least 20-days between each signal). Intuitively, we thought that such a swift mood change may have had negative implications for the market moving forward. Albeit, a little choppy over the 5-day to 10-day period & taking note of the limited sample size, 20-days following this particular pattern the S&P 500 Index managed an average gain of 1.65% with a 7 from 9 win rate. Full data analysis & tables can be viewed at (VIEW LINK)

Probability Trader
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