Clear Analysis Of Friday To Monday Stock Price Action During Last 3 Months

Sitting here during the trading day on Friday, I suddenly realized I wanted to know what the Friday to Monday action has been like. So I checked and I think it is very much worth being aware of.

Referencing the SPY (SPY) daily chart, during the past 13 weekends we have had the following price action on Friday to Monday closes:

A total of seven Fri/Mon changes were strongly down at least 2 points ranging from 1.2 to 4 points down

A total of one Fri/Mon change was strongly up 3 points. That was on the weekend of 12/5

A total of five Fri/Mon changes were very small changes ranging from .1 to .3, with only one slightly up at .5.

This analysis strongly suggests:

1. On Monday March 2nd, we will most likely NOT have any kind of strong rally. Why? We have only had one strong Monday rally in the past three months. Contrarians would argue this perhaps means we’re due for one! :)

2. We are quite likely to have a further decline of 2.5 points, which is the average of the 7 stronger decline days, or a day with little price change.

Based on the above simple analysis, for example, I am holding a position in Direxion Financial Bear 3X Shares ETF (FAZ) for the highly possible decline today and Monday and I feel comfortable holding the position until Monday rather than liquidating it, and could reward handsomely.

Hope you may find this insight helpful showing Friday to Monday price action to be neutral to down during the past 13 weekends. The analysis helps us to see that the risk of loss holding a long position from Friday to Monday during the past three months is substantially higher than holding a short position. Of course now we’ll see what the market will do.

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