The Stanley Cup & The Market
Last night, the Edmonton Oilers became just another statistic, joining the 98% of NHL teams unable to come back from a 3-0 deficit in a playoff series. Statistically, hockey is the most random of the major sports because individual “touches” of the puck are the least frequent throughout an entire game, especially when considering line shifts. In contrast, the NBA is the most influenced by individual players, with 0 successful 3-0 deficit comebacks. It is no coincidence that the NBA is often called a “star-driven” league, as the stars are more likely to determine outcomes. This probably explains why hockey, the most “random” of sports, has had the most 3-0 deficit comebacks, with the opposing team winning four games in a row.
NHL:
- 4 successful comebacks out of 206 instances (1.94% success rate)
- Successful comebacks: 1942 Stanley Cup Final (Maple Leafs), 1975 Quarterfinals (Islanders), 2010 Conference Semifinals (Flyers), 2014 First Round (Kings)
NBA:
- 0 successful comebacks out of 156 instances (0% success rate)
- No team has ever come back from a 3-0 deficit in any round of the NBA playoff
MLB:
- 1 successful comeback out of 39 instances (2.56% success rate)
- Only successful comeback: 2004 ALCS (Boston Red Sox vs New York Yankees)
*Overall, the chances of a team coming back from a 3-0 deficit in a playoff series are less than 2% across major professional sports. The NHL has seen the most such comebacks with 4, while the NBA has never had a team overcome a 3-0 deficit. In baseball, it has happened only once in postseason history.
Having said that clean sweeps with 4 consecutive wins in professional sports finals is quite rare as well. Here are some insights:
NBA Finals:
There have been 8 sweeps out of 77 series since 1947, giving a rough probability of about 10.4%.
NHL Stanley Cup Finals:
With 20 sweeps since 1939, the probability is approximately 20%.
MLB World Series:
There have been 21 sweeps out of 119 series since 1903, resulting in a probability of about 17.6%.
To the market.
In my book, I refer to consecutive days up or down. Depending on the trend, the probabilities of a reversal tend to dramatically increase on the 4th or 5th day, ranging from 50-75%. The S&P 500 experiencing a 5-day losing streak is not extremely common, but it does happen periodically.
For reference, in April 2024, the S&P 500 had a 5-day losing streak, its longest of that year. While a 5-day losing streak indicates short-term money flow shifts, it often signals an overall market rebound. For instance, in October 2023, the S&P 500 snapped a 5-day losing streak, with the index rising 0.7% after the downturn.
I will be looking at the intraday low established today or at approx. 10 am EST for longs.
See you on the Watchtower!