Follow-Through Day (FTD) Detector#

Goal Chain: L0 Medici Enterprises → L1 Einstein Research → L2 Market Timing

Purpose#

Detects Follow-Through Day (FTD) signals for market bottom confirmation using William O'Neil's methodology. This skill helps identify when it's safer to increase equity exposure after a market correction. It is the offensive counterpart to the defensive market-top-detector skill.

How It Works#

This skill implements a state machine that tracks the S&P 500 (SPY) and NASDAQ (QQQ) for signs of a market bottom.

State Machine:

1. Correction: The market is in a downtrend. The skill is looking for a potential bottom.
2. Rally Attempt: A significant up-day occurs after a new low, initiating a "rally attempt". The skill starts a day count.
3. FTD Watch: Between days 4 and 10 of the rally attempt, the skill looks for a Follow-Through Day.
4. FTD Confirmed: A valid FTD occurs. The market is considered to be in a "confirmed uptrend".
5. Post-FTD Monitoring: The skill monitors the health of the confirmed uptrend for signs of failure (e.g., immediate sharp reversals).

FTD Rules (O'Neil Methodology)#

• Rally Attempt Start (Day 1): The index closes higher after a new low, or holds above the low for a second day.
• FTD Qualification (Day 4-10): A major index (SPY or QQQ) must close up >1.5% on higher volume than the previous day.
• Confirmation: Both SPY and QQQ should ideally confirm the FTD within a day or two of each other for the strongest signal.
• Failure: An FTD is considered failed if the index undercuts the low of the rally attempt day.

Usage#

This skill is run via a CLI tool, typically as part of a daily market analysis cron job.

bash

# Run the FTD analysis for the latest market data
einstein-research ftd

# Output (example)
{
  "status": "FTD_CONFIRMED",
  "details": "Follow-Through Day confirmed on 2026-03-14 for SPY.",
  "spy": {
    "state": "FTD_CONFIRMED",
    "rally_attempt_start_date": "2026-03-10",
    "day_count": 5,
    "ftd_date": "2026-03-14",
    "ftd_price_change_pct": 1.8,
    "ftd_volume_change_pct": 25.1
  },
  "qqq": {
    "state": "FTD_WATCH",
    "rally_attempt_start_date": "2026-03-11",
    "day_count": 4,
    "ftd_date": null
  },
  "recommendation": "Market in confirmed uptrend. Consider increasing equity exposure cautiously. Monitor for confirmation on QQQ."
}

Data Sources#

• yfinance: Daily OHLCV data for SPY and QQQ.
• Local Cache: Data is cached locally to avoid redundant downloads.

Integration#

• Daily Cron: Run einstein-research ftd after market close each day.
• Alerting: If status changes to RALLY_ATTEMPT or FTD_CONFIRMED, send a notification to Omer.
• DaVinciOS Dashboard: The output of this skill can be used to update a market-timing indicator on the main dashboard.

When to Use#

• After a market correction of 10% or more.
• When looking for a signal to start buying stocks again.
• To confirm if a recent market bounce has strength.

This skill should be used in conjunction with other indicators (like market breadth, sentiment, and the market-top-detector) for a complete picture.