The S&P 500 index futures (CME.SP) closed with a marginal gain of 5.2 points on Tuesday, or 0.6% at 853.20 after opening the regular trading session with a 'big' move from the previous day's close. It was the third 'big' opening gain in a row.
Q: How have the S&P futures performed in the past after three successive 'big' opening moves?
A: According to the 10 previous occurrences of this event, EventEdge indicates that CME.SP has shown a somewhat bullish edge that peaks 29 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, Nov. 25, 2008) is Thursday, Jan. 8, 2009. CME.SP rallies in 80% of the cases (8 of 10) by an average of 5.3% relative to the close on the event date. The average of the two declines is 2.7%. The overall return of the 10 cases is 3.7%, which, based on the close of CME.SP on the event date (853.2), provides a target price of 884.77.
Note: The market closed lower than the open, but higher on the day - this pattern we call a 'false rally' and may be a bearish factor, although false rallies on the third day where the market has opened up big have all been bullish. Click here to see that event combination in EventEdge.
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Gibbons Burke is editor of MarketHistory.com.
