The Nasdaq Summation Index actually is slightly bullish (moving outside upper bb), which is different this time since my timing signal turned bearish on Friday. With that being said it could easily pullback to the middle bollinger band line before the next leg up ocurrs. What is really strange is how strong the market was a few weeks ago and then nothing…no follow through on the indexes.

The reason that it’s imperative to follow every signal is even though the markets could just have a few days of declines and then turn around, there’s no way to know what the market are going to do actually until it actually happens.

So if the market pulls back and just keeps falling, then this down call will be a success. But you have to take the call to allow the trade to work out.

If it falls a little and then rebounds, then I’ll move to the sidelines and by then I’ll start to see more momentum stocks showing up on my screens and my signal will reverse to the upside. Tonight I didn’t see a signal stock that I was interested in from a momentum perspective.

The other scenario is to stay on the sidelines despite a bearish signal only to watch the market continue lower. The would frustrate any ordinary trader and then cause them to chase and get a bad entry price, not to mention cause them to start to second guess themselves and their signal

The world has changed. You can’t be an 800-pound gorilla; you need to be an economic gazelle. You’ve got to be able to change directions quickly. — Mark Breier

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