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All that is true as well. And it most likely is what will happen I presume. Only
I look at risk reward, and I see my risk component go through the roof, which is
why I think at times it is wise to stay back and wait till things are back to
managable moves. It also depends on your means: In my case, if I am not paying
attention here, I could easily get a big blow. I have had enough of these in the
past, and no longer wish to try every move, chase every trade. Hence I prefer
chosing calmer moments, and make sure I can play again tomorrow, no matter what
happens, even if this means missing out on 10% performance.
Gwenn
Phil Lane wrote:
> Forgot to mention the sp had a follow-through day yesterday on the 6th day
> after the recent swing low - also a confirmation of a bottom. A similar
> thing happened last October.
>
> Both markets gave off buy signals. Over the past few days the SP has been
> playing catchup as the nasdaq took a breather. But overall it has much
> higher relative strength so that's where I focus.
>
> This is very specific stuff with measurable statistics, not that it couldn't
> be refined further. But it does eliminate the need to think about other more
> subjective issues. Unless you enjoy uncertainty and confusion!
>
> fwiw,
> phil
>
> p.s. with yesterday's setup in the Nasdaq about 1/2 the time they will never
> look back but other times they will spend several days filling in the "tail"
> of the signal day, i.e. retesting the low before going up - this wouldn't be
> out of line with Earl's model - and once in a while the market will make a
> lower low!
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