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Critical Day Analysis

Our critical day analysis is all about trend reversals. We tell you when there is a high potential for a reversal of the short trend and we've been doing it since 1994 with an 80%* accuracy.

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Technical Tools

There are a number of excellent tools and indicators used in technical analysis that provide supporting evidence for trading decisions. Below are some of the most common.

Triangle formations and other price patterns can occur on indicators as well as price. Penetration of a support line on the On Balance Volume Indicator on the graph below gives some advance warning that a fall in prices could be near.

Take a look through the list on the left by clicking your mouse on the appropriate heading. Many technical studies are shown to illustrate key technical concepts.

Critical day analysis

Momentum trading - critical day signals on a graph of the S&P500 Index.

When the flow of candle bodies rises leading into the critical day, the expectation is a reversal of that trend and for the flow of candle bodies to fall coming away from a critical day. When the flow of candle bodies falls leading into a critical day, the expectation is a reversal of that short trend and for the flow of candle bodies to rise coming away from the critical day. There are some special circumstance signals such as the March 17/00 signal on the graph above which became a short consolidation period before there was a continuation of the price trend higher. This type of signal cautions a trader to allow price trend to confirm the expectation before risking capital on the trade. The April 18 signal is a special circumstance in that the trend leading into the critical day was still down despite a strong rise in prices on April 17.

Momentum trading - critical day signals on a graph of the Philadelphia Semiconductor Index.

Walk through a critical day

The graphs show a price plot of the Dow Jones Industrials from Sept 28/00 to early November. The First graph ends on November 3/00, two days before an upcoming critical day on November 7/00. Our members looking at the market are expecting a trend reversal to occur due to the high rate of success in our research. Ideally a member will be using their own skills to judge the supply and demand changes, using technical and fundamental indications to confirm suspicions of a reversal, and trade accordingly.
On the second graph we see that the price action on November 6 was a bullish day, reversing the short trend so that the short trend leading into the critical day is now up. A critical day is an expectation of a reversal of the short trend that immediately precedes the critical day. In the case of the November 7 signal, given to members 3 days before, is an indication that the upward moving trend, recognized at the close of November 6 is expected to reverse direction.
On the third graph we can see that November 7 was a low volatility after a large gain on November 6 of about 160 points for the Dow Jones Industrials. The subsequent move over the three days following the November 7 signal saw the Dow Jones Industrials fall 376 points. The next day, November 13, the Dow Jones Industrials lost an additional 83 points with intra-day low a full 609 point loss since the open on the critical day.

Most recent signals

A closer view of the most recent signals. You can see the short trend immediately prior to a successful critical day, reverses coming away from the critical day. Often a failed critical day will indicate a stronger bias in the market for continuation of the trend that was in place prior to the critical day. A failed signal can therefore provide as much information and opportunity as a successful one. Take a look at tech studies to develop a sense of trend reversals and use.

Tech Studies

Comparative Relative Strength

Congestion Pattern

Consolidation