The S&P 500 fell 4.4% today, its biggest one-day drop since April 2025, and it still closed just above its 200-day average. CrowdStrike, the cybersecurity company, lost almost 10%, and our Mean Reversion buy sits a little under today's close, so it only fills if the selling keeps going on Friday.
What caught my eye on Thursday
Since 1950 the S&P 500 has lost 4% or more in a day 57 times, and only 7 of those days still closed above the 200-day average. Today was one of them.
After a drop of 3% or more that still closed above the 200-day average, the next day and the next week were a coin flip. Six months later the index was higher 21 of 22 times.
Of the six days this big before today, five closed lower again within a few weeks. All six got back to where they started, in 7 to 56 sessions.
Tonight's free trade: CRWD
Buy limit $212.19, day order
Stop: after a close beneath $170.45, sell at the next open
Exit: a close above the prior day's high sells it at the next open
Time exit: sell at the open Wed Nov 25
The stop is not an order you place: only a close beneath $170.45 counts. It assumes a fill at the limit; a lower fill lowers it by the same amount. Whichever exit comes first closes the trade.
How Mean Reversion works
The most-watched names in the market get defended. This system buys a hard pullback in a leader that is still in a healthy longer-term uptrend, with a buy limit just under the close. Out within days.
One thing worth knowing
This dip buy has paid best when the index fell with the stock. In our 26-year test, signals on days the Nasdaq 100 fell 2% or more averaged +2.0% a trade. Signals on days it rose averaged +0.8%.
Would you take this one? Hit reply and tell me how you'd play it. I read every reply.
Below the line: 5 more swing trades and 60 day-trade setups for Friday, with the exact entry, stop and exit for each, plus the stops and exits on our 18 open positions.