Mike
08-11-2014, 04:32 PM
I didn't do any trading today but I note that the lows of the NASDAQ bar have climbed above the 50-day moving average. Under IBD's recently revised Market School Exposure Model procedures the power trend and buy switch remained on with zero exposure in the most recent pull back. The lows above the 50DMA gave us a buy signal to 30% invested today. This could be a short covering move but if it continues I will be closing out my short position and adding to long positions.
IBD will naturally wait for the normal follow through day or in the case the index makes a new high will turn the buy switch back on then. Today makes day-2 in a possible advance from Friday's rally day. A normal FTD needs to wait for day-4 or later.
I notice that BITA may be starting a climax run. Weeks of 7/25 and 8/1 showed a pattern called Railroad Tracks which often accompany climatic moves. Railroad tracks are viewed on a weekly chart and the pattern shows two equal-sized wide-range bars with near identical closes, highs and lows. Today's very strong action may be more indicative. We usually don't expect climatic activity close to a base breakout but for late stage base breakouts this can happen 9 or more weeks out which is exactly where we are. BITA has moved 52% from that breakout 9 weeks ago.
Climax runs, if this is what is happening, are more common at the end phase of bull markets.
IBD will naturally wait for the normal follow through day or in the case the index makes a new high will turn the buy switch back on then. Today makes day-2 in a possible advance from Friday's rally day. A normal FTD needs to wait for day-4 or later.
I notice that BITA may be starting a climax run. Weeks of 7/25 and 8/1 showed a pattern called Railroad Tracks which often accompany climatic moves. Railroad tracks are viewed on a weekly chart and the pattern shows two equal-sized wide-range bars with near identical closes, highs and lows. Today's very strong action may be more indicative. We usually don't expect climatic activity close to a base breakout but for late stage base breakouts this can happen 9 or more weeks out which is exactly where we are. BITA has moved 52% from that breakout 9 weeks ago.
Climax runs, if this is what is happening, are more common at the end phase of bull markets.