A pre-trade checklist that can refuse a long three ways

One score, three places to refuse

A long-side procedure can require three sequential gates before any entry: a contrary sentiment backdrop, improving internal breadth at a new index low, and a delayed follow-through rally on expanding volume. Those tests belong in one pre-trade checklist, scored together with a later hold test, before a long is allowed and while it remains open.

Editorial reading: the same score can refuse the long in three places. The market can fail the breadth and follow-through gate. The candidate can fail a top-tier relative-strength comparison over a defined lookback. Or the average directional index can withhold the hold-versus-exit decision from the trader.

Market gates that can block every name

Successive index reaction lows printed on a declining-volume sequence were treated as an argument that selling pressure was being exhausted. Daily new lows that contracted while the weighted index made a new reaction low were used as a positive breadth divergence, meaning fewer individual issues were participating in the decline.

A follow-through day was specified as a delayed confirmation bar after the exact low: an index gain of at least 1 percent on greater volume than the prior session, counted from the fourth day through the tenth. The first three days were ignored unless all three were extremely strong. The illustrated case still accepted a later advance that met volume confirmation because other checklist items already agreed.

Combined shorter-horizon and longer-horizon put/call readings, even at a record extreme, were treated as needing confirmation from breadth and price-volume tests rather than as a stand-alone buy.

The name still has to clear relative strength

After the market-level checklist cleared, names were admitted only if they held a constructive cup-and-handle base, resisted the broader decline, and printed high relative-strength ranks at breakout. The cup-and-handle base is admitted only as a pattern filter inside the larger checklist.

The relative strength index, used here, is a ranked comparison of a name's recent price behavior against a defined universe over a stated sampling interval. It is a selection gate, not a standalone forecast.

When trend strength keeps the decision

When the plus directional indicator is above the minus directional indicator and the average directional index crosses from below both and rises between them, the procedure treats the combination as a hold rule: stop re-judging the open long while the thrust remains intact.

An average directional index rise through the plus directional indicator followed by a downturn was treated as a late-trend warning that the next upward thrust may precede a deeper pullback. In the historical workflow, that sequence had marked important index peaks with a lead measured in weeks.

Editorial reading: until the average directional index hands the hold-versus-exit decision back, the checklist can still refuse a fresh long and can keep an open long from being re-judged on every bar.