ELECT 24 Top Ad

The Unique S&P Chart Pattern Seen Just 13 Other Times

The S&P 500 Index hit a record high on the same day it made a bearish engulfing pattern

Oct 24, 2017 at 10:34 AM
facebook X logo linkedin


The S&P 500 Index (SPX) just did something so rare it's happened only 13 other times in history. Specifically, the index yesterday not only made a bearish engulfing pattern, but also hit an all-time high. Below, we'll take a look at how the S&P tends to perform after this unique double occurrence.

A bearish engulfing pattern happens when the index "engulfs" the previous day's candle. Specifically, it happens when the index:

  • Moves higher from open to close on Day 1, and
  • Moves lower from open to close on Day 2, and
  • The Day 2 open price is higher than the Day 1 closing price, and
  • The Day 2 closing price is lower than the Day 1 open price

spx bearish engulf pattern


Below are the previous times the SPX made a bearish engulfing pattern, regardless of whether it was at or near an all-time high. There have been 208 of these instances, according to Schaeffer's Senior Quantitative Analyst Rocky White. As you can see by the post-signal returns, it's called a "bearish engulfing pattern" for a reason, as the SPX tends to underperform compared to its anytime returns, looking at data since 1984.

SPX after bearish engulfing pattern


Narrowing that, below are the last times the SPX made a bearish engulfing pattern and hit an all-time high in the same day. The last time this happened was in late November 2016. Prior to that, you'd have to go back to April 2015, which was the first signal in almost two years. The first time the SPX made the bearish pattern and touched a record was in March 1993. In fact, I found it interesting that seven of the 13 signals happened in the months of March or April, though four of those were in 1995.

spx bearish engulf and ATH

When these instances occur in tandem, the S&P has actually outperformed over the next three months. Specifically, the SPX was up an average of 4.02% after a signal -- about twice its average anytime three-month return of 2.06%, looking at data since 1993. One day after a signal, though -- which would be today -- the index was 0.5% lower, on average, compared to an anytime gain. So far, though, stocks seem to be bucking that trend, with the S&P moving higher out of the gate this morning.

SPX after BEP and ATH

 

Biden’s government just announced a new government "stimulus program"...

And it could hand you a payment for as much as $7,882 — each quarter.

See, it has to do with a recent 19-page memo from Biden’s office...

Directing the government to once again send a form of "stimulus payments" to the mailboxes of Americans during these difficult times.

Better still, you can collect these payouts every single quarter — for life...

Payments run as high as $7,882... And it only takes five minutes to sign up.

I call this the "Stimulus Stipends" program…

And Forbes recently declared that you can "retire rich" thanks to this program.

So if you want to start cashing in your quarterly payouts — courtesy of the U.S government...

Discover how to receive your FIRST "Stimulus Stipends" payment for up to $7,882 here. 
 (ad)
 

election 2024 report

                                                  AD                                                  
best AI trade you can make today…?
(it’s not MSFT, GOOGL, AMZN or AAPL)

                                                  AD                                                  

 
 

VOLATILITY SCORECARD

 


                                               AD                                                    
Crazy Opportunity!! Tiny AI Stock just $3
“This Type of AI Will Be Worth “Ten MSFTs.”

                                               AD                                                    

 
4 AI STOCKS TO BUY NOW
 

                                                  AD                                                  
best AI trade you can make today…?
(it’s not MSFT, GOOGL, AMZN or AAPL)

                                                  AD