2) Shorting rules:
a) As long as next I1 trough < 3.25 sell the peak or 8, exit low prior to rally above +3.
b) Exit low prior to rally above +3. If low<0 then cover at half distance from low to 0
c) Use troughs as opportunity to take profits. Ignore a trough if the subsequent peak < 0 (stay short).
3) Except when I1 is beyond the extremes stated above use peaks and troughs for all trading decisions.
4) For longer-term traders operating within an I1 buy or sell signal:
a) stay long until final peak or until it falls below 9.0, whichever is lower.
b) stay short as long as next peak <3.0.
c) ignore I1 moves lasting less than 1 week or with a swing < .5.
The following is the current I1 chart and the rule set will be applied after it:
The initial decline into 3/19 does not penetrate 3.25 and is thus not a sell signal, but is simply a short-term downtrend. If the stock market does not decline sharply into that low and especially if the DJI does not decline below 10,370 then I will stand aside at the close of 3/19. After 3/19 the I1 is range-bound within a tight .3 range until it tops out on 4/2. From that point an I1 sell signal ensues to the 4/12 bottom. After 4/12 I look for a 5-day rally not the 2-week rally in the I1 chart. So, after 4/16 I will sell short on short-term trend break rather than waiting for the I1 peak on 4/29.
Hi Steve,
ReplyDeletedoes the fact that the 03/05 turnaround
date predicted by I1 and a downtrend
until 03/19 not having materialized
yet change any of the future predictions, such as the I1 low on 03/19 and a further low on 04/02.
Rgds,
-positron
I'll formally address your question in Daily Commentary. In a nutshell, the 3/19 low stands but it is not the target of a formal I1 sell signal and thus will be low momentum. If the market hits peak early tomorrow morning I will be a heavy seller (heavy for me is up to 15%).
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