$SPDR S&P 500 ETF Trust(SPY)$ $Invesco QQQ Trust(QQQ)$
- Are the indexes making progress? See if the indexes are holding above important level.
- Are the indexes logging distribution day? Distribution days within the first three days after a FTD greatly diminishes the chance of sucess of this FTD .
- Will Nasdaq confirm the S&P FTD with its own FTD? While an FTD is only needed to confirm a buy signals, a FTD on the Nasdaq will provide additional signs that this market can make a sustained rally.
- Will indexes show accumulation days or additional FTD type of action in the next few weeks? Accumulation days show that the institutions are buying with conviction as we need to see their footprint for this rally to be sustainable.
- Are there stocks setting up and breaking out? We would like to see participation from multiple groups and sectors. Watch for sustained breakouts on heavy volume.
Not all FTD will work. Since the high on Nov 2021, the major indexes had four failed FTD. FTD's have a higher failure rate on bear markets. It's easy to dismiss and not take any action on FTD especially in this type of market. Every bull market is characterized by a successful FTD so one of these FTD's will eventually work. The best course of action is to increase or desrease exposure based on the feedback that the market gives us.
The beautiful thing about this game is that it doesn't have a time limit. You can play on your own. It doesn't matter what everyone else is doing. You have your goals. Follow the rules and survive.
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