Prospects for Monday? Check out this simple recent analysis based on yahoo.com/finance historical data for the DOW. I have noticed a tendency for the Low on the first day of a new week to be well below the prior weeks close. OK, it's just the last 13 weeks, but it's worth further investigation certainly!
Basically, for ALL of those last 13 weeks, it has been possible to short at the Friday close, and make a good pip profit from the low of the following Monday ( or Tuesday if there was a bank holiday ). The average pip drop using this method has been -76.
I am not suggesting a method for timing the low, I am simply highlighting the opportunity, and speculating whether the likelihood of a ( at least an initial ) fall at the start of the week is greater than the likelihood of an initial rise. OK it needs more historical testing! Which I will do...
Anyway, just an interesting bit of fun to ponder over the weekend. Oh and yes - I am short above 10900 this weekend, just incase...
Does anyone have any suggestions for why this might be happening? I can only think that there may be a common desire to book profits at the start of the week, after strong runs upto the end of the prior week and/or digestion of weekend news&analysis...???
P.S. This has happened for the last 13 weeks despite an eventual rise by the end of the day for about half of these start of week sessions...
End of week close ; Start of week low ; From close to low
28-Oct-05 10402.77 ; 31-Oct-05 10372.67 ; -30.10
04-Nov-05 10530.76 ; 07-Nov-05 10488.74 ; -42.02
11-Nov-05 10686.04 ; 14-Nov-05 10618.89 ; -67.15
18-Nov-05 10766.33 ; 21-Nov-05 10708.86 ; -57.47
25-Nov-05 10931.62 ; 28-Nov-05 10839.37 ; -92.25
02-Dec-05 10877.51 ; 05-Dec-05 10766.57 ; -110.94
09-Dec-05 10778.58 ; 12-Dec-05 10707.18 ; -71.40
16-Dec-05 10875.59 ; 19-Dec-05 10781.70 ; -93.89
23-Dec-05 10883.27 ; 27-Dec-05 10754.16 ; -129.11
30-Dec-05 10717.50 ; 03-Jan-06 10650.18 ; -67.32
06-Jan-06 10959.31 ; 09-Jan-06 10906.33 ; -52.98
13-Jan-06 10959.87 ; 17-Jan-06 10841.17 ; -118.70
20-Jan-06 10667.39 ; 23-Jan-06 10607.36 ; -60.03