Sticking to the signals and getting ready to add

One of the hardest lessons I've learned in the markets is to resist the temptation to make decisions based on what I want to happen, or what I think will happen, and instead follow what is actually happening. The easiest way to do that is to develop a strategy and stick to it when the signals pop up, regardless of what's in the headlines. Someone recently turned me on to the Heikin-Ashi weekly chart as a signal for going long, and it has a remarkable track record for identifying lows after pullbacks. Try it yourself – call up a chart of any major index and switch it to Heikin-Ashi candlesticks on a weekly time frame. The signal is amazingly simple: go long (or add to an existing position) whenever the chart displays a bullish weekly candle following a downtrend.

Unless something changes and we see a major end-of-week selloff, there is a buy signal setting up for the major indices this week.