Each month, Simplexity Analytics posts calendar 'heat maps' for the stocks, bonds and gold markets. In addition, we also post any other market that has been the most bullish or bearish historically as part of our report.
Included in the video below is the latest heat map for ES using a $2,000 stop.
For info on how to read the heat maps, click here.
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Days of the week matter
Certain days of the week are better than others for entering and exiting the market. It is pretty widely known that stocks perform best in the middle of the week from Tuesday-Thursday. Is there a day of the week tendency in the other markets as well?
To test this out, we simply buy on the electronic open of each day of the week and sell at that days electronic close. For example, Wednesday's trade would be to buy the open at 6:00 pm EST on Tuesday night and sell at the close at 5:00 pm EST on Wednesday.
We did this study with an 18 year backtest and we did another study with a 5 year backtest. The goal was to see if there was much of a change over the recent years compared to the full 18 years.
Then, we ran each of these tests again but changed from a 1 day hold to a 2 day hold. So, a 2 day hold would mean that we are now selling Wednesday's buy at Thursday's close.
Below is a heat map of these 4 tests combined together.
