The market considers a reversal but hesitates in doing so. The previous bearish pattern is not confirmed and it is by now null and invalid. However, a new bearish pattern is developing and another SELL-IF alert is issued. It is time to repeat the homework. Sounds tedious? Well, earning money is not easy. Keep an eye on futures trading and digest all related news events, economic data and the outlook of the world stock markets prior to and during the confirmation week.
This week will also be a moment of truth for the previous BUY signal. So a warning is in order. A confirmation means that signal system erred badly in the last signal. You may lose a significant amount in this case. The following guidelines, however, may protect you from further losses.
We are posting daily the current confirmation status, but you must again check yourselves if one of the following three bearish confirmation cases holds or not:
Does the week open with a downward gap? Your benchmark is the opening price of the gap. If the prices stay below this benchmark, sell your shares.
Does the week open at a level, equal to or above the previous week’s close? The benchmark is that previous close. If prices during the week stay below this benchmark, sell your shares. In both of the above cases, avoid selling if the prices during the week start going over the benchmark.
Check also the rare case in which the week opens with a big upward gap but it ends with a long black candlestick though still closing above the previous week's close. Such activity confirms the bearish alert and the benchmark is the closing price of the long black candlestick.
If one of these confirmation criteria is not met, or in case of a white candlestick or doji, SELL-IF alert remains valid (without confirmation) postponing the confirmation search to the next week. Any long white candlestick following a SELL-IF alert, on the other hand, makes the signal void and invalid.
The bearish alert is still valid and recent market tendency is bearish, but new short positions may be considered only in case of bearish confirmation.
