Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Stocks

Pullbacks within Uptrends Create Opportunities

by February 12, 2023
February 12, 2023
Pullbacks within Uptrends Create Opportunities

Stocks went on a tear from late December to early February with the S&P 500 SPDR (SPY) advancing some 11% from low to high. SPY then pulled back last week with a 2.5% decline from the 2-February high to the 10-February low. A pullback within an uptrend creates a mean-reversion trading opportunity and several ETFs matched our setup for such a trade.

The chart below shows the Russell 2000 Value ETF (IWN) with such a setup. The first indicator shows the 100-day Slope above zero, which means the trend is up. The lower window shows 5-day Normalized ROC dipping below -2 on Thursday to become oversold. A setup requires both criteria (uptrend and oversold). I ignore oversold setups when the trend is down.

The exit signal is important for the success of a mean-reversion strategy. Short-term oversold conditions pave the way for a bounce, but not necessarily an extended advance. Mean-reversion exits are often based on the first bounce and the idea is to sell into strength. This strategy requires us to think outside of the box (buy weakness and sell strength).

TrendInvestorPro introduced a mean-reversion strategy for trading ETFs this year. The indicators are not exactly the same as shown on the chart above, but they are quite similar. This strategy includes a selection process to rank signals, an entry procedure for setups and the all important exit strategy. This strategy is fully quantified with rules and a backtest for understanding the process. We also publish signals on a daily basis and regularly track results. Click here for immediate access.

Normalized ROC, the Trend Composite, Momentum Composite, ATR Trailing Stop and seven other indicators are part of the TrendInvestorPro Indicator Edge Plugin for StockCharts ACP. Click here to learn more and take your analysis process to the next level.

—————————————

0
FacebookTwitterGoogle +Pinterest
previous post
Pentagon says US detected third flying ‘object’ over Alaska a day before shooting down over Canada
next post
This Is Why You Shouldn’t Have Bought Disney (DIS) After Earnings

You may also like

The Market’s Contagious Buzz — What About the...

March 21, 2023

DP Trading Room: Carl’s Grab Bag! – Chipotle...

June 24, 2024

Equal-weight Semis Break Down – Is SOXX Next?...

October 16, 2023

Week Ahead: Festive & Truncated Week May See...

October 23, 2022

GNG TV: Dangerous Environment for Passive Investment

May 4, 2023

Why a Lower VIX is Bearish for Stocks

August 6, 2022

The Hoax of Modern Finance – Part 10:...

February 29, 2024

The Ord Oracle July 26, 2022

July 29, 2022

Bearish Signals & Risk Management: Protect Your Portfolio!

February 26, 2025

Should You be Concerned About These Four Stocks?

April 2, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Trump warns of ‘serious consequences’ if Elon Musk funds Democrats

      June 7, 2025
    • Musk jokes about reconsidering stance on Big Beautiful Bill after Schiff’s praise

      June 7, 2025
    • Musk deletes explosive posts about Trump and Epstein files

      June 7, 2025
    • House witness flips script on Dem who ambushed him during hearing with unearthed tweet: ‘Iceberg is ahead’

      June 7, 2025
    • Call with China’s Xi, and Trump-Musk exchange fueled barbs during 20th week in office

      June 7, 2025
    • Trump’s conservative allies warn Congress faces critical ‘test’ with $9.4B spending cut proposal

      June 7, 2025

    Categories

    • Business (8,152)
    • Investing (2,019)
    • Politics (15,568)
    • Stocks (3,136)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved