QUESTION:
Martin,
Good morning. I would first like to thank you again for the Socrates service. It has provided me with a lot more confidence in my decisions as a trader and the warnings about the week of 5/6 that were being generated in the arrays many different assets saved me a lot of money.
My question for you is about how long reversals good to trade on. There were several assets that I have subscriptions to that were electing weekly bullish reversals in mid to late April but I did not trade on because of the arrays and from your writings on the blog that we are still in a consolidation phase. Did the turning point nullify the usefulness of the reversals as a trading signal going forward or have the arrays simply helped in finding a better entry point?
Regards,
JB
ANSWER: Once a reversal is generated it does not die until elected. But even after that, it can provide resistance or support in an immediate bounce. The key is to look at the gaps between reversals. When there is a cluster of them very close together, it does not indicate that there will be significant follow through.
Keep in mind that even a weekly Reversal may cause a trend to move for only a day if the following week is a Directional Change or turning point. Between the Arrays and the Reversals, you can see generally how far and how long a trend could materialize. You can look at the daily Array to gauge which day might be the high or low.
