Morning Judas
“Morning Judas” looks to see how often, historically, price reverses around certain time, acting as a false swing to carry price a different direction into the rest of the AM session. A common term you may here is "the 10am reversal". Below we will take a look.
The bellow metrics were calculated from a 10yr sample, 2014-2024. Times listed are in Eastern Standard.
When the U.S. equity market opens at 9:30am ET, how often is that initial price movement a "fake out"? Relative to the move between 9:30am and 9:40am, is this a false move, should a reversal be expected? Lets take a look at 9:30, 9:40 and 10:00.
930am ET Judas/"Fake Out"
Looking at the "up judas" where 9:40 > 9:30......
Was a "false swing" where 10:00 < 9:30, 36% of the time.
Was a "continuation" where 10:00 > 9:40, 64% of the time.
This indicates there is continuation more than reversal for this specific situation.
Looking at the "down judas" where 9:40 < 9:30......
Was a "false swing" where 10:00 > 9:30, 30% of the time.
Was a "continuation" where 10:00 < 9:40, 70% of the time.
This indicates there is continuation more than reversal for this specific situation.
The "10am Reversal"
I am sure many reading this have at some point heard about the "10am reversal", where the market supposedly reverses at this time and makes the real move of the morning. Lets take a look at 9:30, 10:00 and 12:00.
Looking at the "up judas" where 10:00 > 9:30......
Was a "false swing" where 12:00 < 9:30, 32% of the time.
Was a "continuation" where 12:00 > 10:00, 68% of the time.
This indicates there is continuation more than reversal for this specific situation.
Looking at the "down judas" where 10:00 < 9:30......
Was a "false swing" where 12:00 > 9:30, 41% of the time.
Was a "continuation" where 12:00 < 10:00, 59% of the time.
This indicates there is continuation more than reversal for this specific situation.
This essentially myth-busts the idea of the "9:30 Judas" and the "10am Reversal". Historically, there has been continuation more than reversal. The idea of a morning judas is historically the opposite, continuation happens more often.
Below is the code used in NinjaTrader if you would like to test this concept your self.
