1-27-2016 Comments

I have been mostly hunkered down because of the weak market situation. Yesterday, IBD reported that it qualified as a follow-through day on the S&P500 placing the market pulse into "confirmed uptrend". The Market School model also triggered a follow-through day on the NASDAQ index. As per my written trading rule, I must take a position on the very day of a FTD. Yesterday morning seeing the conditions set up, I entered LGND from my watch list. The entry was based on LGND recovering the 50-day moving average. The exit line is very close by if it begins to fail that line. XRS on my watch list is also showing a similar buy point this morning. XRS end of day volume is projected to be 500% above a volume alert trigger threshold, thus it may qualify by end of day to be buy-able using two different buy rules. XRS just reported earnings; I may own XRS shortly.

We never know if a FTD will lead to a successful or trade-able rally. This is where a trading plan comes in, no option but to enter the market on a FTD. From here I will watch for other stocks to set up and break out or look for early signs of a failing rally.

My longer term expectation is that the next large market move will be down. But, I have to follow what the market is doing right now. In the spring of 2008, in the middle of a bear market, the market gave us a good trade-able rally with obvious leadership and easy to hold positions. We never know what the market is going to hand us.

[QUOTE=Mike;30811]I have been mostly hunkered down because of the weak market situation. Yesterday, IBD reported that it qualified as a follow-through day on the S&P500 placing the market pulse into "confirmed uptrend". The Market School model also triggered a follow-through day on the NASDAQ index. As per my written trading rule, I must take a position on the very day of a FTD. Yesterday morning seeing the conditions set up, I entered LGND from my watch list. The entry was based on LGND recovering the 50-day moving average. The exit line is very close by if it begins to fail that line. XRS on my watch list is also showing a similar buy point this morning. XRS end of day volume is projected to be 500% above a volume alert trigger threshold, thus it may qualify by end of day to be buy-able using two different buy rules. XRS just reported earnings; I may own XRS shortly.

We never know if a FTD will lead to a successful or trade-able rally. This is where a trading plan comes in, no option but to enter the market on a FTD. From here I will watch for other stocks to set up and break out or look for early signs of a failing rally.

My longer term expectation is that the next large market move will be down. But, I have to follow what the market is doing right now. In the spring of 2008, in the middle of a bear market, the market gave us a good trade-able rally with obvious leadership and easy to hold positions. We never know what the market is going to hand us.[/QUOTE]

Great call on XRS Mike! It is up 5% today.


Pascal