One of the biggest overnight rallies. The YM is up 70 points, ES 6.5, NQ 11 points. The Nikkei closed up 240 points. I am just looking at the TV and suddenly the YM is up only 42 points, but still very decent upgap we are looking at the open. Score: 9 downs, 5 ups, 2 flats
Apparently the YM dropped just before the release of economic data at 8:30. It was nothing exciting and since then there haven't been much movement. The interesting thing was though that the YM dropped 25+ points but the ES sled only 1 point...
After the close futures already jumped (YM 20 points) due to favorable earnings reports from MSFT and others. After midnight they went higher YM reached its top at 30+ but fell by 6 am rised again and at fell again after 8 am, when GDP data was released. Currently up only by 3 points. Still this will go down as an up for the record... Score: 9 downs, 6 ups, 2 flats
I forgot to mention, but the Nikkei closed up HUGE, by 569 points. Compared to that the aftermidnight updrift was very mild and doesn't signal big strength for the Dow.
The futures are slightly down, but by not much, so today is a flat. The Nikkei was up quite decently like 200+ points during the night but ended up only 90 points. Still it has rallied like 10% in the last 6 or so trading days.... Score: 9 downs, 6 ups, 3 flats. Tomorrow is the last day of reporting because the month comes to an end. The result already shows what I have expected....
Well, I guess this is the surprise response for the day for me. First, (although not that important) it wasn't my idea, but a common belief among the MRC. Second, my results are actually stating exactly the OPPOSITE what you are saying, namely that at least in January there WERE more downgaps than upgaps. My bet was for the long ran that it is close to 50-50, occasional seasonality screwing it like in December. Going back to the midnight thingy, I actually have found that there was a certain updrift relevance after midnight this month at least, but several times it fell back by 3-6 am. So if one wanted to take advantage of it, he had to be either awake or use a trailing stop loss order....
Thanks for the long term statistics! Can you backtest the midnight - 7 am timeframe? Maybe that gives a different result... Another strategy employed could be going for the 50-50. Thus if we had let's say a bunch of downgaps and it is even on the long run, playing long should be more rewarding, because we are DUE for an upgap...
Thanks again for the stats, you are a Godsent!! As for backtesting something else... How about looking for nights and upgaps after a downgap? I assume there should be more upgaps when we just passed a downgap night.... So the strategy would be something like this: wait and play only after a downgap. Of course in this case we would miss upgaps if there are let's say 5 in a row... Or can you look at the rows? How many upgaps or downgaps occur in a row? We might find a statistically higher probability, like after 3 upgaps/downgaps an opposite gap is more likely to occur... Another idea: Is there any relevance in the day of the week? Or over the weekends? (maybe weekends are more likely to gap up)
Thanks again for the stats. As the last night of this month has arrived, I am going to close this thread. Futures are mixed this morning, thus it is a flat. But let's notice that there was a spike of 10+ points upward after 3 am, that after 4 am slowly went into the red and lost 20+ points, right now being in the red by 9 points. So the end score for January: 9 downgaps, 6 upgaps and 4 flats The moral of this little statistical exercise was, that don't take anything for granted on ET what other users say (midnight rally works all the time), but check it for yourself.