A ‘Textbook Turnaround Tuesday’ Doesn’t Mean Meltdown Is Over
- ‘Things are so dramatically oversold,’ Spectra’s Donnelly Says
- Tuesday’s bounce may not prove durable: Vantage Point Asset
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It’s an old cliché but the phenomenon known as Turnaround Tuesday — when markets rebound from a selloff at the start of the week — is an opportunity that shows up time and again in the data. The bad news is such recoveries don’t guarantee a bottom has been reached.
Investor psychology during a rout tends to begin with jitters on Thursday, hedging on Friday and all-out selling on Monday, according to Brent Donnelly, veteran trader and president of trading analysis firm Spectra Markets. By Tuesday, the downdraft is primed for a reversal, he wrote in a note published Monday.