Replies to post #25803 on Short Term Trading Member Forum

[airedale88]

geo, re the INDU envelope/NYSE breadth system...
one of the rules (i had to go back and dig up the original reference i had) is that if INDU makes a new 4 to 5 wk low and the cumulative NYSE adv/dcl line does not confirm that low by making a new 4 to 5 wk low itself, a buy signal is given. this monday's cumulative a/d line low was higher than the a/d line low 25 days ago so i guess that fits the requirement. this is not one of the buy signals i have tracked, it seems to have some leeway in interpretation IMO. the system designer says these signals should only be used if the previous signal was one of the strong buy signals (it was) and no current strong sell signal had been given (there wasn't a major sell, a minor sell signal was given on last tuesday, too late to be of much use). there is no mention of INDU/envelope positioning. previous examples of this signal are shown in the system manual, none of which were set up by such a quick and deep drop to below the 3% to 4% bands as we just saw.