If you’re bullish…

According to sentiment guru Jason Goepferd at sentimentrader.com, "there has been a strong tendency for the S&P 500’s performance on a day the Fed announces a rate decision to be reversed (at least partially) over the next few days. Since 1996, there have been 23 instances of the S&P closing in negative territory on one of those days, as it did Tuesday. The next day, the S&P changed course and closed in positive territory 18 of those times (78%) by an average of 0.7%. Looking over the next week, the average maximum drawdown was -0.8% (excluding the September 2001 meeting) while the average maximum gain was more than twice that, at +1.9%.

In other words, when the market’s initial reaction to the Fed decision was negative, that was most often a headfake as the market drifted higher after that."

1 thought on “If you’re bullish…”

Comments are closed.