Investing With IBD Ep. 340 Model Magic: Why Investors Still Swear By This Basic Quant Technique
Oct 1, 2025
Chris Gessel, Chief Content Officer at Investor's Business Daily, shares his expertise on regression channel lines, revealing how they help investors anticipate market movements. He discusses practical applications using stocks like Robinhood and Credo Technology. Gessel explores strategies for managing risk, signals for entries and exits, and the importance of specific anchor points in volatile markets. He also evaluates market sentiment indicators and highlights stocks worth watching, providing a wealth of knowledge for both novice and seasoned investors.
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Regression Channels Define Market Expectations
- Regression channels give an expected trading band for indexes and help spot when action is potentially dangerous.
- Breaking above or below the channel signals caution or potential market problems to monitor closely.
Lock Anchor And Use A 50‑Day Window
- Anchor regression channels at a meaningful start point and lock the window to avoid constant data‑fitting.
- Use a fixed 50‑day length after the anchor to keep the channel uniform and actionable.
Use Specific Regression Settings
- Set regression channel inputs explicitly: price=(high+low)/2, length=50, and appropriate standard deviations.
- Use +/-1 for solid lines and 0.75/0.5 for dashed lines as the team demonstrated in Thinkorswim.