Last-Resort Buy Signal

The alternative buy signal matters because otherwise Dow Theory may provide no practical entry point until much later. The last-resort buy signal applies the same principle as the last-resort sell signal in reverse. The alternative buy signal is the mirror image of the alternative sell signal based on secondary-reaction lows. A buy signal occurs when both averages break above the highs of their last completed secondary reactions. The last-resort buy signal uses the highs of the last completed secondary reaction rather than the lows. A last-resort buy signal is generated in a bearish context when both Dow averages jointly break upward through the highs of the last completed secondary reaction. The alternative buy signal is used when the ordinary Dow Theory buy signal does not appear. The alternative buy signal applies after a bear market structure.