IBD Distribution Days Study for TOS

[UT2Pro1689]

Dude, just wanted to let you know I'm loving this. I haven't dug too much into the math to check it, but it looks great so far (probably a new favorite for risk management) I'm eschewing the idea of making it an upper display just because the number of dist days would end up cluttering the chart either way. Good stuff

You got it right! It's a risk management tool in IBD strategy. On this Monday 8/31, it detected another distribution day for a total of 2 as of today on SPX. In fact, I saw it generated a red warning signal with 5 D-days just before the February crash. You can probably use OnDemand feature to check it out. Just a warning that the Distribution day count rule is only as accurate as other IBD signals.

 

[wtf_dude]

You got it right! It's a risk management tool in IBD strategy. On this Monday 8/31, it detected another distribution day for a total of 2 as of today on SPX. In fact, I saw it generated a red warning signal with 5 D-days just before the February crash. You can probably use OnDemand feature to check it out. Just a warning that the Distribution day count rule is only as accurate as other IBD signals.

Dist days have been stacking up. How exactly do we know when to restart the counter? Is there a fall threshold?

 

[UT2Pro1689]

Dist days have been stacking up. How exactly do we know when to restart the counter? Is there a fall threshold?

When IBD declares market in correction, the d day counts are not used by IBD until a follow-through day (i.e. 2nd confirmation day) occurs which changes market outlook to uptrend. However this script keeps counting D days until you specify a new 2nd confirmation day. When this occurs, the D day count in the script is intended to be in sync with IBD again.
BTW, IBD already shifted risk management level as it downgraded market outlook to under-pressure.

 

[wtf_dude]

When IBD declares market in correction, the d day counts are not used by IBD until a follow-through day (i.e. 2nd confirmation day) occurs which changes market outlook to uptrend. However this script keeps counting D days until you specify a new 2nd confirmation day. When this occurs, the D day count in the script is intended to be in sync with IBD again.
BTW, IBD already shifted risk management level as it downgraded market outlook to under-pressure.

FYI, a cluster of breadth thrusts from the indicator I shared have fired off in the last week

 

[UT2Pro1689]

FYI, a cluster of breadth thrusts from the indicator I shared have fired off in the last week

Nice I guess I need to spend some time studying the indicators you mentioned
What is the trading time frame typically used for your thrust indicators?

On the distribution day count front, SPX generated a red warning on 9/10/2020 while NASDAQ generated a red warning on 9/16/2020. However, I believe there was a discrepancy on NASDAQ D day on 9/17 between this script and IBD. IBD counted a Nasdaq distribution but the script did not. This is because of the difference of the volume data provided by TOS. Overall, I believe Dist Day counts from the script and IBD are in red alarming area.

 

[wtf_dude]

Nice I guess I need to spend some time studying the indicators you mentioned
What is the trading time frame typically used for your thrust indicators?

On the distribution day count front, SPX generated a red warning on 9/10/2020 while NASDAQ generated a red warning on 9/16/2020. However, I believe there was a discrepancy on NASDAQ D day on 9/17 between this script and IBD. IBD counted a Nasdaq distribution but the script did not. This is because of the difference of the volume data provided by TOS. Overall, I believe Dist Day counts from the script and IBD are in red alarming area.

For breadth thrusts, you always want to use daily. In a nutshell, they're basically looking for weak buying pressure switching to extremely high buying pressure in a short period of time. It's used to check if a new bull market is starting. So using this with your ibd dist days, should be a damn good combo

As for the distribution days popping up, that's where things get weird. It sounds like IBD is counting the down days, but may not be counting the big jumps up in buying pressure? 2020 is just ridiculous. Nobody knows anything haha

 

[UT2Pro1689]

For breadth thrusts, you always want to use daily. In a nutshell, they're basically looking for weak buying pressure switching to extremely high buying pressure in a short period of time. It's used to check if a new bull market is starting. So using this with your ibd dist days, should be a damn good combo

As for the distribution days popping up, that's where things get weird. It sounds like IBD is counting the down days, but may not be counting the big jumps up in buying pressure? 2020 is just ridiculous. Nobody knows anything haha

IBD uses distribution days as one of the topping indicators and the follow-through (2nd confirmation) day as the bottom to upturn indicator. Their market outlook is intended for the intermediate to long term.

 

[wtf_dude]

IBD uses distribution days as one of the topping indicators and the follow-through (2nd confirmation) day as the bottom to upturn indicator. Their market outlook is intended for the intermediate to long term.

Right, breadth thrust is market bottom as well for long term. Not for "trading"