Studies: NASDAQ, oil, and rate hike

Here are 3 simple market studies

The NASDAQ just did something that’s extremely rare

The NASDAQ has done something very rare over the past few days.

  1. 2 days ago, the NASDAQ gapped up and then sold off for the rest of the day.
  2. Yesterday, the NASDAQ gapped down and then rallied for the rest of the day.
  3. The daily CLOSES over the past 2 days were within 0.1% of each other.

This has only happened 3 other times in history (1970-present).

As you can see, the NASDAQ’s 6-12 month forward returns are excellent.
Personally, I wouldn’t put too much emphasis on this study.

  1. The sample size is very small. n = 3
  2. 2 of the historical cases don’t apply to today. The 2009 historical case came after a massive 50%+ bear market. The 1990 case happened in the middle of a “big correction”.

XLE (energy sector ETF) has gone up 10 days in a row

XLE is the energy sector ETF. It has gone up 10 consecutive days. This is rare (from 1998-present).

Historically, this is more of a short term bearish sign for oil itself rather than XLE.

Stocks tend to make a short term decline during rate hikes (i.e. this week)

The Fed is expected to hike interest rates this week. During the current rate hike cycle, the stock market has typically experienced some short term weakness (couple of days) during a rate hike.

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2 comments add yours

  1. Hi Troy, a lot of useful information in this update for us short term traders.
    Keep it coming.

  2. Thank you for the advice Matt. Unfortunately as a Canadian, going to NY isn’t as easy! 🙂

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