Quad Sunday: Gap Up (92% win rate)
It is now 3 consecutive weeks that the S&P futures has opened Sunday with a gap down of over +50 points. With a longer term tariff plan and no imminent geopolitical concerns in the weekend, historical data strongly suggests increased probability for a higher futures open on Sunday that may impact even Monday's open.
The statistical evidence is compelling:
- After three consecutive -50 point gap downs, historical win rates for reversal trades show 92% success rate
- 86.2% chance of either hitting target prices (below) or opening higher
- 62% probability of opening more than 5 points higher
- Average win on reversal trades: 25.1 points
- Average loss when pattern fails: 9.6 points
Mean reversion tendencies become particularly strong after multiple down weeks, especially in the absence of new negative catalysts. When examining historical gaps after 3 consecutive severe down gaps, the odds heavily favor a reversal with:
- 62% probability of a +25 to +50 point gap
- ~35% probability of a +50 point or greater gap
This statistical framework, combined with the absence of immediate negative catalysts, suggests a high probability of mean reversion and upside potential for the Sunday open.
Triple Threat Sunday: Will S&P Futures Break Historical Patterns?
Market expectations and known variables are often 'priced in' to current valuations. To quantify this concept, let's analyze how geopolitical trade tensions are reflected in market probabilities and statistical patterns.