Decoding the Dig: Default Mode Signals
Alright team, listen up. Last time we covered the basics. You know who I am, you know what this newsletter is. It’s about TSA⛏️ – my tool, my edge. You’re here because you want a piece of that edge, delivered daily via the Telegram feed if you're a paid subscriber. Smart move. Saves you time, which, frankly, is the only resource that actually matters.
Today, we’re digging into the Default Mode. This is the standard configuration that runs every day after the market closes. It's designed to be robust, requiring minimal input from you. Think of it as the reliable workhorse, scanning the market for specific patterns and setups that I find interesting.
The program flags several distinct situations – signals. Don't get bogged down in the exact math; that's my job. Your job is to understand the gist of what the program is looking for so you can interpret the feed intelligently. These aren't magic bullets, they're starting points for your own research. Got it? Good.
Let's break down the main signal types the Default Mode identifies on the daily charts:
What it is: This is the bread-and-butter signal. It flags situations where multiple factors align positively. Think: solid underlying momentum metrics combined with price action confirming the move, and key moving averages (simple lines showing average price over time) lining up bullishly. It also has to pass some basic health checks (see "The Gatekeeper" below).
Why it's interesting: It’s looking for confirmation. Not just one indicator screaming "buy," but a confluence of factors suggesting the upward trend has legs and isn't just random noise. It's a higher-probability setup based on combined evidence.
What it is: Less of a trading signal and more of a basic quality filter. Before the program even considers more complex signals, it checks if the stock meets minimum criteria: Is the price above a certain floor (we don't trade penny dust)? Is there decent trading volume (showing market interest)? Has it shown some positive movement recently? Is it trading above a basic short-term pivot point?
Why it's interesting: It weeds out the junk. Simple as that. Ensures we're not wasting time analyzing stocks that are illiquid, dead in the water, or showing zero signs of life. Basic stuff, but essential.
What it is: This signal looks for potential turnaround plays. Specifically, it identifies stocks that have recently pulled back (negative price movement) but then show a sharp positive reversal on the current day, backed by significantly higher-than-average trading volume.
Why it's interesting: It's trying to catch a bounce. The volume confirmation is key – it suggests conviction behind the reversal. It’s not just any dip, but a specific kind of recovery attempt that might indicate the sellers are exhausted and buyers are stepping in strongly.
What it is: This signal flags when one of my core momentum scores (adjusted for where the price is relative to its moving averages) hits the top 5% of its historical readings for that specific stock.
Why it's interesting: It highlights extreme strength. This could mean a powerful breakout is underway, or sometimes, it can signal that a move is getting overextended. It pinpoints stocks operating at peak performance levels, historically speaking. Context matters here.
What it is: Frankly, this one's complicated. It looks for a very specific historical setup – a sequence of consecutive days where the closing price strictly increased. Then, it analyzes dozens of indicator values from past instances of this setup to build a statistical profile. If the current candle's indicators fall within the typical range observed during those historical successful runs, it flags it.
Why it's interesting: It's deep pattern matching. It’s trying to identify if the current market action rhymes with past periods that initiated strong upward moves, based on a multi-indicator fingerprint. It’s computationally intensive and looks for rare alignments.
What it is: This signal combines decent baseline momentum (based on my internal scoring) with a classic technical event: the shorter-term moving average crossing above the longer-term moving average.
Why it's interesting: It can be an early indicator. The moving average crossover is a widely watched bullish sign. Combining it with already positive underlying momentum metrics provides an extra layer of potential confirmation that a new uptrend might be starting.
TSA⛏️ crunches a ton of data to identify these signals. The Default Mode applies a standardized, robust filter across the market daily. Your Telegram feed gives you the output – the tickers that triggered one or more of these signals, along with the projected performance based on historical backtests.
Don't overthink the mechanics. Understand the intent behind the signals. Use the feed as your starting point, do your own homework, manage your risk. That's how you use this tool effectively.
Enough talk. Back to work.
Caesar