75% Chance Today Gets Bought?
Of course no study can give the odds for any given day. The circumstances are always unique. Still, I thought this would be interesting.
Looking at the big gap downs since April 1, 2000, we see that big gap downs are usually bought, particularly if they occur after days/weeks of down.
Today, the NASDAQ is set to gap down about 4%, right over critical support and over its standard Bollinger Band (i.e., into deeply oversold). Things are ugly out there, especially with the dollar in such peril and confidence in the systems itself shaken by these accounting scandals, but stranger things have happened -- maybe it gets bought.
Below I list the NASDAQ gap down days of 3% or more since April 1, 2000. The last two columns show where it closed and where it closed two days later, both relative to the gap down. As you can see, we see that 66% of the time it ended up on the day and 66% it was higher 2 days later. The number jumps to 75% for cases where it was not sold (i.e., up or flat). TWO DAYS
Date Open High Low Close Gap CLOSE LATER
04/24/00 3467 3497 3345 3482 -4.9% +.5% +4.7%
04/27/00 3519 3774 3514 3774 -3.1% +7.2% +12.5%
09/22/00 3616 3804 3615 3804 -5.6% +5.2% +2.0%
10/18/00 3107 3258 3026 3172 -3.3% +2.1% +12.1%
11/30/00 2599 2642 2523 2598 -4.0% -.0% +.6%
12/20/00 2411 2433 2313 2333 -4.0% -3.2% +4.4%
02/16/01 2445 2458 2397 2425 -4.2% -.8% -7.2%
03/02/01 2111 2198 2092 2118 -3.3% +.3% +4.4%
03/14/01 1949 2029 1933 1972 -3.3% +1.2% -3.0%
09/17/01 1614 1629 1579 1580 -4.8% -2.1% -5.3%
09/21/01 1396 1454 1387 1423 -5.1% +2.0% +7.6%
06/07/02 1500 1549 1496 1535 -3.5% +2.4% -.2%
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