from Market Wizards:
I came in long. I have thought about it, and I would do the same thing again. Why? Because on October 16, the market fell 108 points, which, at the time, was the biggest one-day point decline in the history of the stock exchange. It looked climatic to me, and I thought that was a buying opportunity. The only problem was that it was a Friday. Usually a down Friday is followed by a down Monday.
I did a study with my data from 2008-2013 to see if Mondays showed continuation from Fridays. The 1st standard deviation of the chart does not have much actionable however the edges (with small sample) size suggest that down moves of -1.25 to -1.5% get retraced and modest up days of 1.25-1.75 show continuation.