What will ETF SPY do tomorrow at the open?
9 Ways to Tell How The Market Might Open Tomorrow
Here are nine ways to help you figure that out. The stock market generally does not open at the same spot that it closed the day before. So that creates what we refer to as a gap. The best question is how can we take advantage of that opportunity?
Here’s one statistic that can be very helpful, and that is that the market on average tends to open up about 55% of the time and down 45% of the time.
How much of a gap can certainly determine how much you might make from your overnight trade. And if it’s a flat open? Well, that can be disastrous. So I’ll share an indicator that helps me with that issue later in this article.
Still, your skill as a trader plays a role in your success. If you learn how to buy and more important exit your trades well, you can minimize your losses and maximize your gains.
Now, let’s talk about some indicators.
One consideration to determine if the market might be up or down the next day is price and volume of the stock or ETF you are trading. Is the price increasing with higher volume or decreasing with higher value at the end of the day, or compared to the previous day or days during the week? Take a look. If you see unusual activity that could determine if you’re going to have an up or down day the following morning.
As you may know, many brokerages will allow you to trade 15 minutes after the market closes. And a lot can happen during those 15 minutes, such as economic news or earnings reports or even press releases that can change the mood of the market or individual stocks. So waiting till after the market closes does have some risks, however, you can see before you trade what the mood of the market is after it closes and make some decisions as to how you think that’ll affect the opening the next day.
Believe it or not, I find social media to be helpful in determining how the market might open the next day. Yeah, there are a lot of opinions but you can take a poll and see what people think, and what is the mood. I have found that they’re often right.
Of course. My favorite indicator should come as no surprise to you and that is the up or down signal at spytomorrow.com which is available for free at four o’clock Eastern Standard Time. It measures the pressure at the end of the trading day which often correlates to how the market might open the next day.
And I have to tell you, the purple algorithm has been doing a pretty good job. The next consideration is news or trends, what’s been happening, such as economic reports what happens after the CPI or PPI report or jobs report as of late.
How about earnings? What tends to happen after Apple reports earnings or Google or Tesla? What does the market tend to do? This can help you determine what the market might do the following day.
Perhaps you might want to consider what the big money is doing. Are there inflows to spy or Are they pulling money out of spy? What’s the put-call ratio? Is the big money looking ahead thinking the markets are going up? Or does big money think the markets are going down?
Of course, there’s always technical analysis and there are many indicators such as the RSI that can show us if the market is technically overbought or oversold. I do have a warning. It’s that the trend can continue to be overbought and oversold for another few days before there’s a correction.
Just because you think it can’t go any higher or lower, know that it can.
Some traders like to use $tick. I’m not an expert at using tick. It considers multiple exchanges and how many stocks are going up versus how many are going down at a specific point in time. And sometimes if you look at $tick at the end of the day, it might give you an indication as to how the market might open the next day. This is kind of similar to the idea of pressure.
Another tick that traders will use is the last tick of the day on their chart whether they’re using one-minute, three-minute or five-minute charts. If the last tick is up, especially with high volume. It could be an up open the next day. If the last tick is down, especially with high volume. Well, then tomorrow could be a lower open.
Test these indicators over a month and see which ones work best with your style of trading. It very well maybe there’s one method that works really well or maybe a combination of the best two out of three is the direction that you go.
Still, I recommend you paper trade first to make sure this aggressive form of trading is right for you.
Oh, and the indicator that I use to help determine flat markets is in the member section of spytomorrow.com. It’s the purple Max G. If it’s zero, I’m always cautious.
