Another local bottom called by TD Sequential: Callaway Golf (ELY)

No wonder why the DeMark indicators cost so much money!!! Look at this chart. I posted the Callaway Golf chart recently and was tempted to buy it at the 16.50 level. I didn't and decided that it would be prudent to wait for a lower risk entry. It came back to the original buy point and I planned on going long today. Unfortunately, the company made a positive announcement pre-market and ELY gapped up before I could buy.

I am amazed at how powerful TD Sequential can be.

Short Entry on TD Sequential Failures

Paul Tudor Jones said that when the TD Sequential or TD Combo doesn't work, "it really doesn't work". For this reason, it is sometimes suggested that one go short as soon as a TD Sequential or TD Combo closes below its stop-loss point. I have been looking into this recently and have put together some charts.

Notice how the stop-loss area can be treated as the same stop-loss short postition after the TD Sequential failure. In some cases, the price bounces back and reaches into the stop-loss area. In such a case, this offers someone a late entry point to go short or allows someone who already is short to add to their position.

Given that large short-covering spikes can be so incredibly nerve racking, having a well defined entry and exit strategy would be helpful to those who want to play both the bull and bear sides of the market.

Longer Term TD Sequential Price Projections

Ever since I coded up the TD Sequential and TD Combo buy points I have struggled with setting price projections. DeMark likes to use the TD Trend Factor, but I have found that with my limited bankroll using such small price projections are not practical. I also don't have the time to monitor market closely enough. What I would really like is to buy at the bottom of a price reversal and have an indicator that would tell me if the move to the upside will continue or if the price will resume the larger downtrend.


Let me present a recent long position as an example. The short term chart show the TD Sequential countdown and the buy point (red bar). As the price moved up, one can see that it ran into resistance at the TDST line at 83.08 . Does one sell here or does one wait until the price builds strength to bust through overhead resistance?




What the next chart shows is that it might be possible to see a trend break in the TD Combo Advance/Decline line, indicating that a move higher is possible. As you can see, the A/D line has already broken the shorter term downtrends, indicating that one should hold the long position. If it breaks the final line, look for a larger up-move.

Follow up on NCI Building Systems (NCI)

Wow, NCI made a nice showing on an ugly day. A couple of days ago I posted NCI as a TD Sequential play. I didn't buy any because of the underlying fundamental story about commercial construction and also because earnings were out today.

It just goes to show that technicals can trump fundamentals on the short time scale.

TD Sequential Buy using Blocks 2.0

Ok, it took some work but I had to rewrite the TD Sequential indicator for Blocks after my old hard drive crashed. If you don't know what the indicator is you can click here for a brief description.

The first thing to do is to write the code for the setup. Use a bar to T/F custom block.

Now, use that custom block in the following block diagram. This will show you when you have a completed TD Sequential countdown.

Next, I show the simple TD countdown and the TD Perfection code. The block diagram is also shown.

Here is the final result. A chart that gives the TD Setup, Countdown, and Perfection buy signal.