Shave and a Haircut...In the past, Two Bits (two red weeks) has resulted in a 3rd red week. For this analysis, we need only two bits of data. Up, or down. Using 1st and 3rd std. dev. linear regression reveals the pattern.
Yet trying to avoid holding onto an emotional bias. Looking at short positions will depend on how price behaves on key times, such as opening sessions and news days. Coupled with the appearance of trapped buyers or sellers, or breakout traders in need of liquidation.
Awareness of these "market factors" and psychologies is an ongoing exercise.