Today was marked as the worst day of the 3 day seasonal weakness pattern and could be the lowest point of the weakness we see.
The market tried to break out of its wedge today, but the pressure lower would not let it hold.
The second day in this weakness pattern calls for a modest increase in prices, so we could see a break on the upside out of the wedge tomorrow. You can plainly see on the chart that we are getting very close to a break one way or the other and Wednesday should rectify prices in either direction, with the probibility leaning towards a break higher.
The Third and last day in the seasonal weakness pattern calls for only modestly lower prices so should we get a break out of the wedge in an upward thrust tomorrow then we will look for a small pullback of that move for Thursday.
After this pattern works its way through, the market should enter a period of unusual strength all the way until March 19th. Of course we need one thing to happen at a time and the first is an upside breakout of the wedge.
For those of you keeping score, here is how the seasonal patterns work out for tomorrow.
DAY OF THE MONTH - 52% CHANCE OF AN UP DAY (INSIGNIFICANT) - NEUTRAL
DAY OF THE MONTH RETURN - NEUTRAL
DAY OF THE WEEK - 59% CHANCE OF AN UP DAY - BULLISH
DAY OF THE WEEK RETURN - BEST OF ALL DAYS - BULLISH
POST OPTIONS EXPIRATION - 54% UP DAY AND BEST OF ALL DAYS - BULLISH
POST OPTION EXPIRATION RETURN - HIGHEST OF ALL DAYS - BULLISH
POST PRESIDENTS DAY - 40% CHANCE OF AN UP DAY - BEARISH
POST PRESIDENTS DAY RETURN - INSIGNIFICANT - NEUTRAL
TOTALS
4 BULLISH
3 NEUTRAL
1 BEARISH
OUTPUT - MILDLY POSITIVE DAY EXPECTED
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