Reasons I'm not changing my positions
The daily scores performed as we would expect on a big up day. The 4 hr is back in the yellow after a very green number Thursday.
Before we get into the rest of the charts, I'm going to outline a couple reasons why I'm not convinced that this rally will carry on for very long. First, the RumWave is at a mid range point on a downward slide. All I can really do is compare where it is now with historically similar instances and draw the most informed conclusion possible. The conclusion that I have reached is that in past examples where the RumWave looked very similar, the best move was to stay the course.
Below is an example of the DJIA from 1 Nov through 25 Nov 2011 (the highlighted white rectangle on the chart shows the dates mentioned). The RumWave provided a sell signal just prior to 1 Nov, and we got a couple red candles downward. Over the next 10 or so days, the market rallied. During that time, the 3x inverse leveraged ETF that I use was down as much as 12%. During that entire time the RumWave scores were decreasing as the market moved higher. Then around 15 November the market snapped lower. During this time the inverse ETF made up some serious ground. On 25 Nov the RumWave signaled a reversal of direction (which correlated perfectly with the bottom) and the ETF had achieved an 8% profit. I give this example because the RumWave looked very very much like it does now. What that means is that I'm in for some pain on the UltraWave for a little while, but I have faith that the RumWave indications will hold true. There is no such thing as a crystal ball in this game, but the RumWave is the closest thing I've found to it. The RumWave, unlike us mortal humans, is not subject to emotional swings that come from big market moves against us. That is one of the reasons it is so great!
|DJIA 1 Nov - 25 Nov (white shaded box)|
|DJIA 4 Hr Chart|
Above is the 4 hr chart. It was a big strong rally that will likely carry some momentum with it in the next week.
|DJIA Daily Chart|