Do Kangaroo tails predict that a market has stopped going down? I have made an indicator that looks at whether the market has managed to close beyond the extreme of the tail within 10 days. I have only used instances where the 10-day moving average is moving in a direction opposite to the 200-day moving average (the results are dreadful otherwise). The question is whether the tail predicts an end to the counter-trend move in the short term.
Here are some results (Time period is 30 years for equities and max. available for other markets — c. 8 years for futures and 10 years for currencies; “long” and “short” should be taken as the direction you would need to trade to close a position — i.e. it is a “long success” when the market has been going down and stops (for at least 10 days) after a kangaroo tail).