Power Trend

Hi Marty, I recently subscribed and am very grateful for your guidance through this market.  You mentioned several times recently that we are in a “power trend”.  How do you define a “power trend” and how can it be identified/recognized? Is this related to the Whaley breadth thrusts and break-away momentum seen recently?  Thank you!

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The Whaley Breadth Thrust is part of the technical criteria which made me believe we are starting an uptrend. But, we did not enter a power trend until completing the following criteria:

A power trend starts when these four things take place simultaneously on a major index:

1) The low is above the 21-day exponential moving average (EMA) for at least 10 days.

2) The 21-day EMA is above the 50-day simple moving average for at least five days.

3) The 50-day line is in an uptrend (one day is sufficient).

4) The market closes up for the day.

A power trend typically ends when the 21-day crosses back below the 50-day.

This trend was discovered by my friend Mike Webster when he was employed at O'Neil Capital Management.

We need to monitor this new uptrend to ensure we continue in this power trend.

Thank you for your question!

Regards,

Marty