Markets extremely boring to trade

1st of sept. an up day for the indices 8 of the last ten.
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For the sake of simplicity, let us assume that every year has 365 days. Also, let us assume that the probability of an up or down day is exactly 50%. (It isn't, but the average winner versus average loser removes the edge from that fact. These assumptions are just for ease of demonstration.)

For any one calendar date there is a 5.5% probability of having 8 or more up days for the last 10 years. If you analyze all 365 days, you should, on average, find about 20 that will give you such results for any 10 year period. This is completely due to randomness.

So be careful...

-Raystonn
 
Thank you for your point, and I don't disagree with it. The cold hard facts of math and statistics do not apply for it.

BUT when you think of an anecdotal "fact" like this. if tomorrow closes up it will be 9 out of 11. Sure same random odds. but as this goes on people start to hear of this fact.

"don't go short today, its a historically up day. TODAY could break the pattern, but why fight it? live to fight another day"

Enough people start saying this and suddenly you have another up day on your hands. hmmm.

No arguement intended merely a rehashing of something i read recently:

Russian proverb that says:

If you are always looking back at history, you will lose an eye.
If you ignore history, you'll lose both.
 
cnbc seems to use those statistics on a daily basis.

cnbc will continue to hype the market like they did in MAY right before we had that huge drop. I guess people forget now that the dow is back up close to new highs along with the s&p.
 
Perhaps a good strategy would be to fade these calls then. Wait for the money to push the market in the direction the media indicates, then fade it so you can be on the same side as the smart money when the market comes back down.

-Raystonn
 
Remember it is end of summer holidays for the kids.

Many pro traders, firm traders and such will take a break during the last week of August to the first week of September (right before school year start) for a short vacation with their family.

low participation => low volume => more noise and tight range

By 2nd week of September you will see pick up of volume again.
 
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