Decided to drop this post on this existing thread since it falls within this subject tagline and really doesn’t need a thread of it’s own.
Still curious about Market School and have been playing a bit with the TOS tool I posted on in another thread (Thinkscript for IBD stuff). It hit me that this may be a good time to maybe walk with the market to try and learn some more. ###Let me note, I am not endorsing or suggesting Market School is the right path for all. That’s why I’m trying to learn about it, I’m just too cheap to go buy it. Too much money for something I have my doubts about. But appreciate the perspective of trying to establish signals in the general market to help guide when/how much for active investments.###
We’re at a timely spot in the market to try and apply MS, what I know of it. Having had a significant decline and now a “Rally day” which is basically an up day in the market. They also list what’s called a “Pink Rally Day” which is one that closes down, but the close is in the upper 50% of the day’s range (even more potent if in the upper 80%). Since it is “Day 1” and yes, counting days is very important to the process, I’m going to try and follow along. Will try and post any time the status changes. If anyone who knows Market School cares to chime in, please, please do so.
A rally day is not actionable, no buy or sell signal, just a flag of possible change.
Next event day to watch for is the “Follow Through Day,” probably should be thought of as confirmation day of the trend change. It’s defined as when at least one of the major indexes makes a “large percent gain” with higher volume than the day prior. The percent gain has a criteria based on the volatility (defined as the average percentage gain of the prior 200 days). Roughly, you need a 1.0 to 1.25% percentage gain. Technically, it’s a moving target and given the last year or so, it’s currently thought of as a 1.25% close increase to trigger.
Key is that you don’t even count anything as a FTD until the 4th day after the Rally day, but that gets confusing since the rally day is day 1, so you look at days 5-8 and later. The first possible FTD with this potential rally is Thursday.
A FTD is a “Buy” day in their system. You pyramid in as discussed above. Remember, they are following NASDQ and SPX to generate the signals, but you act upon your watchlist stocks that are in a buy pattern or breakout. If nothing is, they suggest buy indexes. The key is exposure to an anticipated rally. Guess it’s the old saying that by the time you know you are in a rally or new uptrend, you’ve missed it.
Keep in mind, we have NOT had a complete reset of the markets based on their criteria and still are in an active situation with buy switch on and distribution days being kept. They still list an exposure level, so this exercise will not match what they post. It is to try and apply the rules for rally’s and subsequent signals. To see if they make some sense and better understand. The overlays on this system is part of the frustration for me.
Lakedog