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IBD---The Big Picture

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#1 tuffy88



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Posted 07 March 2007 - 12:43 PM

Decided to post this on the Swing Waves board. Have received over 60 PM or e-mails from mainly lurkers here since last post a week ago today on FF asking me to continue posting the signals this method gives when they give them.. Anyone interested can read it. And the method won't cause anger & disruption on FF. And I hope not result in my PM & e-mail box being filled with angry and insulting messages after each post. Remember my using this method does not hurt anyone else's trading. Yesterday had large gains with lower volume signaling some lack of conviction by institutions. Still it was Day 1 of a rally attempt. Day 1 is any session during a correction in which one of the major indexes closes higher after hitting a low during the current correction. Volume not a factor. Nor is size of the days gains. But it is not a buy signal. Buy signal will be the follow through or confirmation day after Day 1 of rally attempt. Now looking for a follow through day with big price increase, (1.7% or more) with increasing volume on any major index on day 4 or later of the rally attempt. Day 3 & 4 do not make much difference as long as no major index undercuts the low of day 1 of rally attempt. If that happens rally is aborted and correction continues. So for now just wait and watch. The buy signal will be when & if we get the follow through day. Also called a confirmation day. Charles

#2 Jnavin



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Posted 07 March 2007 - 02:15 PM

Welcome to Swingwaves, tuffy -- thanks for sharing your work.

#3 tuffy88



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Posted 07 March 2007 - 02:32 PM

Ment to say Day 2 & 3 of rally attempt do not matter much instead of Day 3 & 4 that I posted above. Charles

#4 Rogerdodger



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Posted 07 March 2007 - 03:01 PM

Charles! YOU made my day! Thanks for posting. From many of us I'm sure.

#5 Long/Short Funds

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Posted 07 March 2007 - 04:17 PM

Very much looking forward to your signals being posted here at Swing Waves !!! Thanks very much Charles..
Just an "Old Retired Fart" trying to keep my IRA invested with the market direction.

#6 greenie



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Posted 07 March 2007 - 06:16 PM

Yes, Charles. We love you :D Promise me you won't go away again.
It is not the doing that is difficult, but the knowing

It's the illiquidity, stupid !

#7 PorkLoin



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Posted 08 March 2007 - 07:14 AM

Charles, you're most welcome and I'm very glad to see you here. A mighty cold morning it is, especially for March 8 :angry: but I feel warmer seeing your post :) Best, Doug

#8 mss



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Posted 08 March 2007 - 06:02 PM

:) Welcome Charles. Glad to see you posting again and on this board for sure. Looking forward to your thoughts. B) mss

#9 tuffy88



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Posted 10 March 2007 - 11:19 AM

Not much change in market from my previous post. Might be a good idea to give the reason for trading this way. Not really my ideas at all. The ideas of Bill O'Neil as expressed in his book The Successful Investor and in the pages of Investors Business Daily. Especially in the colume The Big Picture on page 1 each day. I read it every day. O'Neil thinks the market trends by price and volume. And one can follow the big institutions (big money, and smart money) by watching the daily price and volume of markets. That the institutions signal their actions by watching the price & volume of market movements. Thus when volume increases and price increases at the same time it means that institutions are buying. And when price decreases & volume increases institutions are selling. There is a lot more in his book, but it seems to me that that is the basic idea. Thus a big price drop with increasing volume as we got last Tuesday indicates institutions were selling hard. Enough so that it marked an end to the uptrend in the markets. And started a correction, or downtrend in the markets. Then the next day prices rose sharply on increasing volume. Marking Day 1 of a rally attempt. Wait to buy until or if there is a follow through day(day of sharply increasing prices with an increase in volume) on day 4 or later after day 1. Friday was day 4. So now waiting for that follow through day. It has to come without prices undercuting the low of Day 1. Sometimes get the follow through day and sometimes not. But a new uptrend does not start unless or until we do get that follow through day. I will buy after the follow through day and hold while the rally lasts. Other rules for seeing when the uptrend ends, but that is for another day. Those are the basic's for spotting the beginning of an uptrend as I see it from reading O'Neil. I am sure it does not do justice to all of his ideas an this subject. You can read his book and IBD daily to get more, but this seems to me to be the basics of it. I pay little attention to other fundamental or TA. One thing. I only use a small portion of my capital with this method. Most(over 80%) is invested long term in asset allocated buy & hold Vanguard Index Funds. So now I am just waiting and watching for a follow through day. No way of knowing whether it will come before the low of day 1 is undercut. With this method you spend most of your time watching, not trading. I posted real trades in real time using this method on TT for the last 4 years. It does not always result in profits. Made 8 trades in 4 years. 3 for a loss. 5 profitable. On balance profitable. Anyone interested can check my posts over there to see the results in real time. Everyone have a good weekend. Charles

#10 voy



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Posted 10 March 2007 - 03:08 PM

Hi Charles. I hardly ever post here, but I just want to let you know that I'm glad you're still here. Your discipline and patience are admirable, and I will look forward to anything you have to say. Thanks, Joe