CORRECTION:
I previously listed that on 5/2 we had a Buy 6 Signal (low above the 50 sma) and that was incorrect. I have used 21 EMA for decades and was looking at one of my routine charts when I made that call. The rule actually states that it is a “Buy on flat or up day when intraday low is at or above an uptrending 50 sma.” I was wrong doubly as I was ignoring the need for an uptrending moving average plus I was looking at EMA not SMA. That uptrend in the SMA just occurred today, so today is the B6 Signal.
I wanted to also make all away of a “Rule” that I should have listed earlier:
RESTRAINT RULE
Basically, it is an attempt to limit exposure risk early in a potential recovery from buying too much too fast. Risk is reduced by limiting the exposure to a maximum of +2 (two buy stages) until the index makes significant progress above the close of the initial Follow-Through-Day OR a Buy 4 Signal occurs.
- Significant Progress is defined as the price percentage gain as determined for a FTD based on volatility but with no volume criteria.
- B4 Signal is “Trending Above the 21-sma.”
We actually had three buy signals 4 days before our clear B4 signal. Just trying to set the record straight.
Lakedog