With Christmas just a few weeks away, I thought it would be interesting to see how the S&P behaves in the days just before Christmas. Do the days just before this holiday tend to be bullish, bearish, or neutral? To test the market behavior just before the Christmas holiday I will use the S&P Cash index back in 1960. I will create an EasyLanguage strategy that will enter a trade X days before Christmas and close that trade on the opening of the first trading day after Christmas. Each trade will dedicate $50,000 to purchase shares. Stops, and both commissions and slippage are not utilized in this study. Ten Days Before Christmas First let’s look at the ten days before Christmas. What happens […]Read more ›
Post Tagged with: "Market Edge"
This article is going to be an extension of a previous article where we performed an intraday price study. We do this by exploring different market sessions to determine if we can find an edge for a possible intraday trading system. If you have not read the previous article, When To Go Long, I urge you to read this because we are going to jump right in and explore the same concept on the short side. As a reminder here are the five different market sessions we will be looking at. Six Market Sessions Pre-Market, 06:20 – 08:30 The Open, 08:30 to 10:40 Midday, 10:40 to 13:50 The Close, 13:50 to 15:00 Post-Market, 15:00 to 17:10 We will be using the […]Read more ›
I’ve received a couple of questions in regards to the Overnight Edge study that I think you may find interesting. As a reminder, the Overnight Edge study demonstrates that points gained in the S&P futures market appear to be much more plentiful during the night sesssion. Again, what I call the night session is after the U.S. close at 15:00 Central time. It was presumed a market edge could be taken advantage of by opening positions during the overnight session or by holding trades after the close. This overnight edge can appear in individual stocks as well. Below is the example of trading 1 share of Apple (AAPL). No commissions or slippage were deducted. The first equity graph (below) depicts […]Read more ›
In this article I’m going to highlight a trading edge that appears in many different instruments and markets including both the futures and equity markets. It’s an edge that has persisted for well over two decades. This edge is a long bias that occurs in the “overnight” session as defined by the U.S. markets. Traders who hold long positions overnight can often be rewarded as substantial upward movement can occur during this quiet time. Does this edge still hold up? Or is it fading? Many day traders discuss the advantages of closing out their positions at the end of the day. Such traders are often proud they don’t hold open positions overnight for fear of the market moving strongly against them in the overnight session. This is […]Read more ›
I was recently looking at a daily chart of the Euro when I noticed something that has always been there but it never really caught my attention. Below is a chart of the Euro future contract. The days are not important. Look at each candle. Notice anything? Nearly all the days have pronounced tails. It’s also true they all have wicks, but for the sake of simplicity let’s just look at the tail. The tail of a daily candle is the “wick” below the candle. Suddenly one thing stood out at me: the daily close if often well above its intraday low. This got me thinking if I could buy near the daily low I might just have an edge […]Read more ›
It’s been about a year since I’ve taken a look at the very popular 2-period RSI trading method by Larry Connors and Cesar Alvarez. We all know there are no magic indicators but there is an indicator that certainly acted like magic over several decades. What indicator is it? Our reliable RSI indicator. Over the past few years the standard 2-period trading system as defined in the book, “Short Term Trading Strategies That Work“, has been in a drawdown. During 2011 the market experienced a sudden and sustained drop which put the system into loss. It has been slowly recovering since. Below is an equity graph depicting the trading system’s equity curve trading the SPX index from 1983. You can easily see the […]Read more ›