The S&P 500 had an outside daily bar on Thursday with the close above the high of the previous day. Here are the last 12 days that followed an outside daily bar with the close above the high of the previous day. 6 were up, and 6 were down.

   Date  change
3/13/2009    0.8%
3/18/2009    2.1%
 4/2/2009    3.3%
 5/7/2009   -1.1%
5/19/2009   -0.1%
5/27/2009   -1.8%
6/30/2009   -0.6%
7/14/2009    0.6%
9/29/2009   -0.4%
11/6/2009    0.3%
 1/8/2010    0.4%
5/13/2010   -1.1%

Average       0.2%
Standard d    1.4%
t             0.49
N               12

Jonathan Bower writes:

I don't think one is precluded from defining what ever time-sliced relationship one is interested in evaluating. For example in forex you could define "daily bars" that encompass Asia, Europe, and/or US time horizons, they could even be overlapping if it suited your needs. So an "outside day" is in the eye of the beholder and depends entirely on how they define "a day".

Whether it contains relevant information is, of course, a whole other ball game. I believe the original thread demonstrated that the outside day that was measured provided very little in the way of useful/tradeable/actionable information. Of course depending on ones trading methodology, perhaps it did….


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