Mike
08-14-2014, 10:48 AM
With the IBD follow-through yesterday I closed my short CTRX trade early this morning. This is one of my trading rules. I likely would have done it anyway as the Market School exposure model has moved up to a recommended 75% long portfolio.
In the past since 2000 IBD has usually wanted more than a 1% rise on a major index on volume higher than the day before to call a follow through day. Prior to this period however 1% was the threshold. The difference has to do with market volatility. Volatility is lower now than it was in 2002 for example when IBD was looking for a 1.7% threshold.
I entered RH this morning. Not on a volume trigger but because the 21-day, 50-day and 10-day moving averages have converged and RH has move up through the convergence. This is generally a safe entry as the three moving averages each contribute to support. High volume would have made it more obvious.
In the past since 2000 IBD has usually wanted more than a 1% rise on a major index on volume higher than the day before to call a follow through day. Prior to this period however 1% was the threshold. The difference has to do with market volatility. Volatility is lower now than it was in 2002 for example when IBD was looking for a 1.7% threshold.
I entered RH this morning. Not on a volume trigger but because the 21-day, 50-day and 10-day moving averages have converged and RH has move up through the convergence. This is generally a safe entry as the three moving averages each contribute to support. High volume would have made it more obvious.