OT: market condition

Apologies to Saul and company for posting a “TA” message, I did not this is Off Topic, feel free to stop reading.

IBD defines 3 market states: Confirmed Uptrend, Under Pressure, and Market Correction. Under Pressure mode is entered after being in a confirmed uptrend. It is judged by “distribution days” in the indexes. A distribution day is generally a non-minor down day on volume higher than previous day (like today). These are counted up over time and they can “age-off” as time passes. We entered “under pressure” about 4 days ago and are on the brink. In fact, to me today was the last straw and I declared it for myself. Certainly one more day soon will do it officially. Once in a market correction, a confirmed uptrend requires a few things. First you start and attempt with a day bouncing off a low. Then you need a significant up day (follow through day) (2%) on strong volume in the third to eighth day to confirm the uptrend. Day 2 does no count. Also, if you violate the bottom before the follow through day, then your are starting over. This is all based on their backtesting of historical bull runs and corrections.

So price and volume matter and are the only true indicators of market health. That is, it shows what the big boys are doing with their money and the IBD/CANSLIM dogma is that you go with the flow, don’t spit into the wind. The claim 75% of a stocks movement is due to the market. On average that must be tru-ish because that is the market.

This does not apply directly here. This is long term investing based on 1YPEG theory (plus other good fundamentals and attributes). BUT…if you have cash waiting to deploy in 1YPEG stocks, consider that the big boys seem to be leaving and that can cause a good leg down where there will be better buys. (especially for smaller stocks like these).

I had some trash I did not like and was redeploying it here over time, I have accelerated selling some “trash” and will SLOWLY deploy here on the downturn. I also have a bucket of money I do use for IBD/breakout buys and following dogma, I cashed almost all of that out over last couple of days (OLED, NFLX, PANW, NVDA). Some of that money will come here for longer term deployment if things get real juicy.

Sorry for the post, hope a couple find it of minor interest.



Please continue to post your thoughts.

I have the same feeling that the market is looking heavy and that we might get in at better numbers.
I sold out of SBUX, NFLIX and thinking of getting out of GILD
I have a full position of SWKS and would like to add, but I am hesitating

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