- Market makes a quick dip (BPNYA crosses EMA(30), our SELL signal is triggered) but all those who missed the rally and all those who prematurely got out of the rally 2 weeks back tries to get back into market. More like a stampede, everyone wants to get in before next BIG rally. BPNYA may fall below 70 mark briefly but move back again above 70 mark. This time BPNYA will cross EMA(30) upwards while remaining above 70 mark, which we do not consider as BUY signal since historically market could not manage to make more than 4% gains while BPNYA is above 70, besides we will also see increased volatility at this point. This is actually next chance for all those who did not SELL during last SELL signal. However, everyone who missed 1st rally will try to get in at any cost. This is a perfect time for market to penalize and then we get the real pullback.
- Market starts a slow yet contained correction/pullback, very streamlined selling or sideways action.
- Market takes a tumble, volatility will increase with BIG UP/DOWN days which will cause a shakeout.
In short, do not rush into anything without a plan and strategy. Avoid noise and be patient.