The Bottom Line:
- Justin Yelson and Mike Webster discuss the latest updates and strategies for Swing Trader.
- Reflections on the one-year anniversary of IBD founder William O’Neil’s passing.
- Insights into O’Neil’s work ethic, humility, and continuous learning approach.
- Analysis of recent market conditions, including the significance of downside reversals.
- Explanation of Market School rules and their application to current market exposure.
Reflecting on William O’Neil’s Legacy and One-Year Anniversary
Remembering William O’Neil
I mean most of what we talk about Bill will circle back at the end because I know people are anxious to get through things but basically everything that we do is related to something that we learned directly or indirectly from Bill. Everything that you do, everything that I do, everything pretty much everyone at the firm does. The main thing that I learned from him, so many things, but his work ethic is just like yours and Ed Carson’s. Honestly, just like next level kind of like Elon Musk type of work ethic that he modeled for us, his humility, but really his openness always wanting to learn something new that he had figured out enough when he was God 20 years younger than we are and he had enough money at that point to just retire and be done but he wanted to keep going and he was always trying to figure things out.
Understanding Downside Reversals in the Market
The downside reversal that we had last Thursday was extremely important and very telling and it’s kind of like you’re playing poker and it’s a tell that we have and we didn’t know it at the time. When you have that downside reversal and Charles Harris, Justin, and I created the IBD’s Market School rules which are black and white rules to help with market exposure because market exposure is the most important thing that you do. We balanced things out because it was a teeter-totter so if we were above the 21-day, we would add exposure, below it we would subtract, above the 50-day, we’d add exposure, below it we subtract, and we did the same thing with the downside reversal. When you have the downside reversal like we had last Thursday, it basically means that you should have further weakness and typically it’s two to three days of pretty nasty selling that would have happened.
Responding to Market Signals
So with that downside reversal, it basically means that you should have further weakness and typically it’s two to three days of pretty nasty selling that would have happened. And that would have driven us down to the green line, which is the 21-day, that would have been normal action, and frankly what I was expecting and preparing for. And one of the things that we learned from Bill was there’s the quick and the dead in the market, that’s something that he put in his book “How to Make Money in Stocks,” an old quote, and meaning that when you have a downside reversal you want to take action that day. That’s what we did. What did we bring our exposure from to on that day if you have it handy? Well, you know what, I’m thinking a little bit over 100 to the 60s. Yeah, I think we were at like 108 and then down to 68 if I recall.
Swing Trader Strategies Discussed by Justin Yelson and Mike Webster
Insights on Swing Trader Strategies by Justin Yelson and Mike Webster
So with that downside reversal, it basically means that you should have further weakness and typically it’s two to three days of pretty nasty selling that would have happened. And one of the things that we learned from Bill was there’s the quick and the dead in the market, that’s something that he put in his book “How to Make Money in Stocks,” an old quote, and meaning that when you have a downside reversal you want to take action that day. That’s what we did. What did we bring our exposure from to on that day if you have it handy? Well, you know what, I’m thinking a little bit over 100 to the 60s. Yeah, I think we were at like 108 and then down to 68 if I recall.
Responding to Market Signals
When you have the downside reversal like we had last Thursday, it basically means that you should have further weakness and typically it’s two to three days of pretty nasty selling that would have happened. That would have driven us down to the green line, which is the 21-day, that would have been normal action, and frankly what I was expecting and preparing for. And one of the things that we learned from Bill was there’s the quick and the dead in the market, that’s something that he put in his book “How to Make Money in Stocks,” an old quote, and meaning that when you have a downside reversal you want to take action that day. That’s what we did.
Understanding Market Trends
The downside reversal that we had last Thursday was extremely important and very telling. It’s kind of like you’re playing poker and it’s a tell that we have and we didn’t know it at the time. When you have that downside reversal and Charles Harris, Justin, and I created the IBD’s Market School rules which are black and white rules to help with market exposure because market exposure is the most important thing that you do. We balanced things out because it was a teeter-totter so if we were above the 21-day, we would add exposure, below it we would subtract, above the 50-day, we’d add exposure, below it we subtract, and we did the same thing with the downside reversal.
Understanding O’Neil’s Work Ethic, Humility, and Lifelong Learning
Reflections on Bill O’Neil’s Attitudes and Values
Most of what we discuss circles back to our experiences and learnings from Bill O’Neil. His work ethic, humility, and openness to continuous learning were key traits that deeply influenced us. O’Neil exhibited an extraordinary work ethic, akin to that of Elon Musk, which he passed on to us by example. Despite having achieved financial stability earlier in life, O’Neil remained driven to keep learning and growing, setting a remarkable standard for dedication and perseverance.
Embracing Lifelong Learning and Applying Insights in Trading Strategies
One of the pivotal lessons we absorbed from Bill O’Neil was the importance of continuing education and adaptability in the face of market signals. For instance, the concept of downside reversals, which we extensively studied as part of IBD’s Market School rules, emphasized the need for immediate action based on specific market indicators. O’Neil’s philosophy of being quick to respond to such signals resonated strongly with us, guiding our strategic decisions in navigating market trends effectively.
Implementing Market Strategies Informed by O’Neil’s Teachings
O’Neil’s teachings influenced our strategies in responding to market dynamics, particularly in scenarios like downside reversals. These events serve as critical moments where swift adjustments are warranted, aligning with O’Neil’s belief in seizing opportunities promptly. By integrating his principles into our trading approach, we aim to maintain a balanced and proactive stance towards market fluctuations, drawing inspiration from O’Neil’s legacy of disciplined investing and continuous self-improvement.
Current Market Conditions and the Impact of Downside Reversals
Market Insights and Response to Downside Reversals
The recent downside reversal in the market highlighted a crucial moment that demanded immediate attention and strategic adjustments. It signaled potential further weakness, typically leading to a few days of intense selling pressure. Understanding the significance of downside reversals and swiftly acting upon them, as emphasized by Bill O’Neil’s teachings, enabled us to adapt our market exposure levels effectively in response to evolving trends.
Strategic Adaptations and Market Dynamics
Incorporating O’Neil’s principles into our trading strategies allowed us to navigate market dynamics with agility and precision. The concept of downside reversals served as a key indicator for making well-timed adjustments, ensuring our positioning aligned with the unfolding market conditions. By embracing a proactive approach informed by O’Neil’s insights, we strive to maintain a resilient stance in the face of market fluctuations and capitalize on emerging opportunities.
Leveraging O’Neil’s Legacy for Informed Decision-Making
O’Neil’s legacy of disciplined investing and continuous learning continues to guide our decision-making process, particularly in responding to critical market signals like downside reversals. By applying his teachings to our strategic framework, we aim to uphold a balanced and adaptive approach that reflects a commitment to ongoing improvement and effective risk management strategies in today’s dynamic trading environment.
Applying Market School Rules to Navigate Today’s Market Exposure
Applying Defined Market Strategies for Effective Decision-Making
In light of recent market trends, particularly the downside reversal observed last Thursday, it became imperative to adhere to structured market rules for managing exposure levels. The implementation of black and white rules, as established through IBD’s Market School, served as a guiding framework to navigate market uncertainties without being swayed by emotional reactions. By maintaining a clear understanding of market dynamics and adhering to predefined rules, investors can make informed decisions that align with established risk tolerance thresholds.
Strategic Adjustments in Response to Market Signals
The concept of downside reversals and their implications on market continuity underscored the need for proactive decision-making and timely adjustments. Through the development of strategic guidelines based on historical market analysis and principles learned from industry veterans like William O’Neil, investors can effectively respond to sudden shifts in market sentiment. By applying a disciplined approach and leveraging actionable insights derived from downside reversals, traders can position themselves strategically to capitalize on emerging opportunities while managing potential risks effectively.
