Characteristics of Weak and Strong BUY signals in Market Breadth Ratios

In a weak BUY signal we do not get a 300 or more in the "4% UP" column for the prior 5 days before the BUY signal. This happened for the 4/26/2012 BUY signal. See chart below.

We did not get a reading of 300 or more in the "4% UP" column for the prior 5 days before the BUY signal. This indicates a weak BUY signal.

With this kind of signal commit only a portion of your portfolio money to the market. If the signal becomes strong later, add more money to the market. This strategy will limit the downside risk.

For the BUY signal to have some strength, we should get a 300 plus reading within 4 to 10 days after the BUY signal.

In the 4/26/2012 case we did not get any 300 or more in the "4% up" column for any day after the BUY signal. We actually got a sell signal before getting a 300 plus reading.

In a strong BUY signal we get a 300 or more in the "4% UP" column in the prior 5 days before the BUY signal.  After that we should again get a 300 plus reading in the “4% UP” column within 4 to 10 days of the BUY signal, to give confirmation to the strength of the BUY signal. This happened for the 11/30/2011 BUY signal. See chart below.

We got a 300 plus reading 2 days prior to the BUY signal. Then we got a 300 plus reading in the "4% UP" column on the 7th day after a BUY signal, giving a confirmation to the strength of the BUY signal.

In cases like this we can be 100% invested.