Ask all the questions you wish, great questions by the way, and welcome to a truly interesting thread...
Okay, let's see...
Given the initial Long Signal, and given that the Vertical Price was reached, as successful resistance, is it reasonable to assume that the Long signal was at least weakened, if not ended?
No, it would not be reasonable to assume, and here's why... there's no way to know, although this much of a downward reaction to the initial vertical price illustrates more weakness than had the market merely bounced off that price for a day with just a 10 or 15 point pull back... so, yes, it does show more weakness than otherwise, but the model is still long and there's nothing to tell me that the rally itself has done anything but retrace, the trend is still higher until I get a sell signal, and there is none anywhere in sight...
It seems to me that I would be wise to "wait for the next signal", and that we now reside in "no-signal land".
Yes, it does seem that way, but that's not how I read the model... taking an aggressive short position or simply lightening your long positions at those vertical prices can be prudent, but this is only a pull back, there is nothing to show that this is anything more than that, so the best thing to do is to reload in these pull backs and stay with the long side since that's still where the model is pointing...
I suppose one could take a new signal and then close it out at the very first vertical price reached and then do nothing until the next signal occurs... BUT, what if you sold out at 1131.40, and then we pulled back, and then rallied higher to the next vertical price, and so on until we rallied above 1360 before we ever see another sell signal? You'll have missed the entire move...
GZ |
