🚨JD & Silas will live at 10 a.m. ET🚨
They’ll cover a breakdown of key market indicators to kick things off, a deep dive into binary trade strategies midway through, and a look at our weekly trade competition to finish [tap to join them for Opening Playbook]
Here’s a question I bet most traders think they already know the answer to:
Do big candles in the market actually matter?
Most people instinctively say yes. A giant red candle feels catastrophic, while a huge green candle feels like unstoppable momentum.
But after digging through more than 23 years of S&P 500 (SPY) data, the reality becomes a lot more surprising.
Big candles fail to create follow-through 54% of the time.
After one day, only 46% continue in the same direction. Two days later, that rises only slightly to 48%. By day three, you’re barely above break-even at 51%, and by day five and day 10, the edge disappears again.
Trading purely in the direction of large candles gives you essentially no edge at all.
Something else that surprises traders is how little a trend filter changes the short-term outcome. Even when you only take trades above the 100-day moving average, the next-day and next-few-day reactions remain remarkably similar.
Longer term, trend absolutely matters. But short term, price behaves far more randomly than traders expect.
Keeping things simple often works better than layering on unnecessary complexity.
Another nuance worth paying attention to is how many of the largest red candles are actually driven by overnight gaps rather than intraday selling pressure.
But when volatility spikes, intraday ranges start dominating price movement. That’s when some of the strongest reversals happen during the session itself rather than at the open.
In those environments, staying alert early in the day becomes critical.
The Data That Destroys the Follow-Through Myth
Once you separate large green candles from large red candles, the numbers become even more revealing.
Big green candles show only modest continuation, with roughly 52% of sessions finishing bullish the following day.
But big red candles tell a completely different story.
Only 36.8% continue lower the next day, meaning roughly 63% of the time the following session is actually bullish.
The larger the drop, the more likely you are to see a bounce because bearish moves tend to expand volatility more than they expand downside probability.
When volatility rises, this effect gets even stronger.
Panic creates range expansion, not necessarily directional continuation.
The High VIX Panic Setup
A massive down candle during a high-volatility environment leads to the market being higher five days later roughly 80% of the time.
And reversals aren’t the only thing volatility accelerates.
When volatility is elevated and the market shows genuine bullish strength, that momentum can continue aggressively as well.
Panic fuels snapbacks, but it can also amplify emerging upside momentum.
One practical takeaway is that the opening 30- to 60-minute candle matters far more than most traders realize.
When that opening candle closes green, the market finishes higher the vast majority of the time. Combine that with a large overnight gap or a volatility-driven setup, and you can uncover very high-probability intraday opportunities.
At the same time, strong probabilities never eliminate risk.
Defined-risk structures, disciplined sizing and proper exits remain essential. Statistical edges only matter if your process keeps you in the game long enough to benefit from them.
And one final point: These principles extend far beyond S&P 500 (SPY).
When volatility surges, most markets experience range expansion regardless of sector or symbol. The real opportunity comes from understanding how volatility changes movement — not from assuming direction based on emotion.
P.S. Want an exclusive first look at what I’ve been building behind the scenes? Join my beta testing group here before we close the doors.
Nate Tucci
Tucci Trades
Follow along and join the conversation for real-time analysis, trade ideas, market insights and more!
- Telegram: https://t.me/nate_tucci
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Important Note: No one from the New Money Crew team or Tucci Trades will ever contact you directly on Telegram.
*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.
P.S. How 1 Weird Dataset Could Predict the Market’s Open
Why is Alex flying all the way to Pittsburgh to meet me on Monday?
Well, on one hand, he’s looking to give away a thousand bucks to one lucky trader.
And on the other, he wants to expose a gaping hole in the options chain that’s helped allow him to not only to predict the direction of the next open…
But also to trade that prediction for a shot at a double, even triple-digit payout!
Although I can’t make trading guarantees…
It’s one of the most intriguing overnight setups I’ve seen…
And I’ve seen a lot!
That said, you’ve got a little more time to reserve yourself a seat right here.
Remember, entering your name guarantees you a shot at the $1,000 cash…
But the only way to learn the amazing new tactic Alex is set to reveal is by showing up Live.
So be there!
