NASDAQ waiting for the bull confirming

This chart is used in conjunction with the podcast on how to tell what trend we are in the market. Right now we are in a correction or as you can call it a bear market. The price action on 09/23 gave the CANSLIM model the last distribution day (6 Distributions total) needed to go into a correction. If there is about 6 distribution days it means the market is in a correction.

A distribution day is a day of institution selling. This means 2 things
1. Volume is greater than the day before
2. Price Drop of at least .2%

That was the past and now lets talk about the present. Most stocks follow the market about 75% of the time. This means in a bear market most of the time it is not wise to be bullish. What it is a great time for is to be research stocks or even to take a break from stocks for some me time. It is okay to spend time for yourself. If you want to keep on following the market, this is what I am looking for a switch in trend.

Seeing the chart there was a pink rally day on 09/21 and this is day 1 of a minimum 4 day follow through day. What a follow through day means is that there is a potential bullish tilt. The two criteria for a follow through day is:

1. Volume is grearter than the day before
2. Price increase of at least 1.25%

If this follow through day happens I buy something, anything. Almost always I have always bought multiple stocks with a starter position and if the price keeps on going up then I add more stocks to my portfolio until I have a concentrate portfolio of winners until they aren't.

Hoping this helps with your trading. Stay Safe. Trade Safe.

Commentaire:

Dow Jones just had a follow through day yesterday. So it could be considered a bull market again.