Special Situations: 3-I Days

[Soultrader]

Very interesting point nasdaq5048,

I have been mainly a student of Dalton so can not completely comment on this. But from my years of observation, there is a higher probability that the markets will consolidate or retrace after a trend day. However, I do think it is up to market conditions. If the past few months, we have had a semi-euphoric stage with a decent uptrend ever since May (for the Dow). During such conditions, trend days followed by trend days were common.

I like to look at the %TREND. Anytime the markets have a high %TREND, I look for a market with a lower %TREND the following day. Also, after a strong trend day, I like to watch carefully at the morning session. If there is price acceptance above value in the morning, I try to look for long setups.