Feb

27

Fakeout Days, from Steve Ellison

February 27, 2007 |

I define a fakeout as a session in which the S&P 500 futures move in one direction from the previous close to 9:30, and then move a greater number of points in the opposite direction from 9:30 to the close. I counted 21 fakeouts in the 57 trading days ending Jan 14, 2007. Of the 21, 15 consisted of an initial move down that reversed to a gain for the day.

Since mid-January the market has been faking the daily direction much less, but the rarely seen fake up, close down appeared yesterday, Feb 26, 2007. Only the fourth fakeout day of the past 29 trading days, and two of the four were miniscule.

A team that is stronger than the opposition has little need to fake; it relies on superior execution. In the Woody Hayes era, everybody knew Ohio State's game plan would be "three yards and a cloud of dust," but few teams could stop the Buckeyes.


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