When markets fall
The Christmas 2018 Scare
A sudden drop, then a full recovery within months.
our model of the S&P 500 around Sep 2018–Apr 2019falls about 20% at its worst, then ends about 6% above where it begana shape, not a scale · not this strategy
- Index
- S&P 500
- The real period we model it on
- 20 Sep 2018 – 23 Apr 2019
- What the index did then
- the index finished roughly where it began
- How we test it
- Runs on the actual trading days
A 20% fall into Christmas Eve 2018 on tightening fears, then a recovery to a new all-time high within four months. Anything that sold near the low and waited for confirmation missed it.
What this strategy is told to do here
- 1Holding
11 companies.
- 2Trigger
Any holding falls 16% to 25% below what it was bought for.
- 3Action
That holding is sold. The rest keep trading.
Two days in this stretch open far below the previous close.
An order set to sell 16% to 25% down can end up selling far lower when the market opens below that price. An overnight drop cannot be sold into. That is exactly what this market is here to find out, and it is why it is in the set.