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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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What is a critical day?

The critical day is the result of 4 years of in-house research into market relationships and mechanics, changes in positioning across various markets, and in a broad scope, supply and demand. Our critical day research is a series of methodologies created by us in order to pinpoint possible days where a trend reversal for the short segment of price trend is more probable. We have had great success. Critical day research requires a continuous collection and manipulation of data however interpretation of the critical day is simple. The critical day is an expectation of a change in direction of the shortest segment of price trend leading into the critical day. A single critical day is an expectation for a reversal to occur in the major U.S. Indices. As such, stocks also often exhibit influence of a reversal in the indices. A single critical day applies in the broad scope of stocks, index options and futures. Because of the broad nature of the data collection process that goes into generating a critical day, the research has application across many different stocks, sectors and indices. During times of high correlation to the bond market, critical day research can effectively identify changes in the short trend of bond prices and yields as well. A critical day is given to members in advance by two to three days allowing for preparation of strategy and a focus on confirming evidence of any change in the trend. Knowing when a movement is important is a navigational tool that can lead to great successes in the market place.

The Most recent Critical Days on the graph below are shown with Blue and Red dots. The blue dots, above or below the price plot, indicate successful critical days. Red dots indicate failures. A successful critical day indicates that the short trend did reverse, as expected by members, going into that period. You'll notice that the short trend leading into a successful critical day reverses coming away from a critical day. In terms of our research, the short trend is identified as the shortest segment of price activity leading into and away from a critical day. Looking at the flow of candle bodies approaching a critical day and then moving away from a critical day can at the flow of candle bodies can be a visual aid in identifying what we refer to as the short trend.

Application to Stocks	Application for Sector Analysis
Boeing (BA)	Computer Software Index
General Motors (GM)	Chemicals Index
JP Morgan (JPM)	Banks - Financial
Dow Chemicals (DOW)	Building Materials
IBM (IBM)	Aerospace
Texas Instruments (TXN)	Transportation
AT&T (T)	Computer systems Index
Phfizer (PFE)	Natural Gas Index
Federal Express (FDX)	North American Telecom
Veritas (VRTS)	Semiconductor Index
Intel (INTC)	30 YEAR BOND INDEX
Take a look at these Indices. Each are plotted with the past critical days on each graph.
Dow Jones Industrials	Nasdaq
Philadelphia Semiconductor Index	Russell 2000
S&P500 Index	S&P400 Midcap
Value Line	NYSE
Major Market	Bonds

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