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Major Market Swing Signal (End of Day) Wednesday 5-18-22

Updated: May 20

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Today the market traded down really hard after the Retail Sales numbers came out and Target Earnings, both the Retail numbers and Target Earnings were BAD


The Nasdaq was the Index that gave us the Follow Through Day. Today it fell hard to create a Follow Through Day undercut (when the prices trade below the low of the follow-through day). Also, the Index closed below the Follow-Through day making things even worse. When this happens the Follow-Through has a 90% chance of failing and the market conditions will change back to a market under pressure of a market correction


All of the Categories are now bearish and the FOLLOW THROUGH DAY chances of succeeding are slim only 10%.


We have to always remember that not all follow through days are going to succeed some will fail, but no bull market has ever started without a follow-through day


This is why we always start buying with a small position first and as the market proves itself we add more shares to the positions. There is always a chance that the trade can fail. We are Traders, not gamblers.


We still have the Green Light to Strat Looking for Leading Stocks, in Leading Industry Groups, Breaking out of Sound Base Patterns with Good Volume because the follow-through day has not failed yet.


But it would be wise to wait until our Breadth Indicators tell us that the Market Rally is beginning. Then we will start slowly with small positions until the market proves itself. The market still has key overhead Resistance to get above


The Weekly Bollinger Band, Stochastic, RSI, and MACD Strategy are trying to give us the buy signal on the Indexes but it has not yet. So we are still mostly on the sideline


The Stocks that gave us the early entry Tuesday (on the follow-through day) also traded down with Major Market. The Stocks hit our Stop Loss levels so we closed them out with a small loss.


This is why proper money management is key and starting a position small first until the stock proves itself is so important. Also buying the stock at or very close to the PIVOT is key. The stocks rallied hard Tuesday and then pulled back hard Wednesday but we did not get hurt bad because we brought the stocks at the Pivot or very close to it, with a small number of shares (small positions).


Sorry for the delay but I will post BTA Stock Watchlist this weekend also, I will be posting some charts of the Market Breadth


The BULLS are now trying to take control but it doesn't look good right now


Thank You

BTA

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