A Bed Bath & Beyond Buy!
Let's examine a chart of Bed, Bath & Beyond (BBBY) on 8/6/2010 at 1:45pm (the time can be seen on the timeline at the top). Right below the ticker on the top left, we can see that an alert of type 5 has been issued. From the digits of the alert, we can see that the average profit for this strategy for this stock historically has been 1.6%, For more information about the statistical information contained in the alert or just to refresh, please refer to this blog:
Enlarging the top left panel of the chart above, we can see that the type 5 alert has been triggered by the crossing point of the Pink and the Black oscillators.
So we have the direction for the trade and the trigger from the alert. We expect the price to rise in the short term. Remember that the third and most important step in our trading process is examining safety of the alert. Since this alert comes from a combination of the Pink and the Black, let us take a closer look at the slower and dominant Blue oscillator for safety.
The behavior of the Blue near the zero line is explained by the summation of wave which we had discussed in a recent blog: http://orthochronos.posterous.com/adding-waves
From the enlarged bottom right chart shown above, it is clear that the Blue and the Daily Residue has upside. So it is a safe buy alert issued at a price of $38.34 (both the alert and the price can be seen on the title of the enlarged panel above).
The exit for this trade was issued today (8/9/2010) at 12 noon. Remember that the exit alerts consist of the first digit followed by 10 zeroes. From this chart at exit shown below, we can see that the Pink has indeed moved up. Because of the synchronized upswing of both its components, the Violet & the Green, the Pink gained an amplitude of 2%
In the chart below we can see that the other oscillators continued consistently as expected. A further example of wave summation is clearly visible in the behavior of the Red oscillator which is the sum of the Black and the Blue. The exit price was $39.26. This short term buy yielded a profit of 2.4%!
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