MDM (Market Direction Model): Distribution days
Q: Since the MDM went to a buy on 1 September, I don't really see any "traditional distribution" days, let alone four of them. I'm assuming most of those distribution days happened before the buy signal on the 1st? Do you use a rolling one month count regardless of follow-through day signals?
A: In general, I use a rolling 20 day count regardless of follow-through day signals. That said, there are exceptions to this that depend on unusual market action.
While the current trend since the follow-through day has been up, my studies have shown it is best to not cancel distribution days simply because of a follow-through day.
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