Trend Days to the Downside: Identifying Features

A while back, I posted on the topic of how you can identify trend days to the downside. That post is worth reviewing in light of this morning's action.

To that list, I would also add a few criteria:

* It's worth watching for a trend day whenever the market has traded in a relatively narrow range and then breaks out of that range on average or above volume;

* It's worth watching for a trend day when news comes out that moves the market to new lows and also moves other asset classes correspondingly;

* It's worth watching for a trend day when bounces in NYSE TICK and Market Delta are short-lived and quickly followed by negative readings, keeping the cumulative totals in a downtrend;

* It's worth watching for a trend day when relative volume expansions are occurring in the direction of the day's trade (i.e., market expands volume when trading lower during a candidate trend day down).

No one, of course, has a crystal ball on markets, but by identifying the common features of trend days early in the day, you can greatly aid your decision making and stay away from fighting the market tide.

More:

Day Structure

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