Constellation Trader Walkthrough: Why the Green Bars Below the Signal Line Matter

If you haven't watched last night's webinar where I introduced the Constellation trader, this is one session you'll want to see. While Constellation is considered a beta version and I will depend on your feedback, I thought I would show you something that should help you get started using it.

Since it's not yet on our member menu, here's where you'll find it: www.stockforecasttoday.com/constellation

Starting With a Simple Buy-and-Hold Strategy in the Constellation Trader

To get started, let's do a simple buy-and-hold strategy. I'll walk you through the mechanics.

First, select the SPY dot on the screen. We're going to trade it rather than an individual stock.

Then, if you go to the very beginning of the data (Jan. 2000) by pressing the Shift and Tab keys, and start a new challenge (Esc key opens and closes it), you can then press the + key to buy the closing price on that first day. After that, press the Tab key to go to the very end of the data (yesterday) and press the - (minus key) to sell.

You will have effectively bought the SPY since Jan 2000 and sold it yesterday. Now you can open the challenge again (Esc key) and look at the results:

Constellation trader equity chart comparing a buy-and-hold SPY trade from January 2000 against buy and hold and SPXL

The chart shows three lines, but the orange line labeled Your Trading, is exactly under buy-and-hold. Note that in this case, holding SPXL finished not much differently than buy-and-hold (SPY), which is rare.

Now Let's Look at Why the Green Bars Matter

Now, let's do something that will show you why those green bars on the bottom of the Signal Line panel matter. And while this won't be the actual way we use the tool in trading, it will help you understand this part of the tool that I didn't explain in the webinar last night.

This time, first clear the results from the previous challenge (the button to do that is at the bottom of the results page - Esc button).

Now, using the green bars at the bottom of the Signal Line panel, drag that panel to start of the beginning of this year, and we'll trade based on just those green bars. Click your mouse at the first bar where you see a group of consecutive green bars, similar to this (I'm starting at the first of 2026):

Constellation trader screen with the SPY dot selected and the first group of green bars below the signal line

Make sure SPY dot is clicked above (the SPY will show its price when clicked).

Now press the Buy button (+).

Next, go to the end of that green grouping, click the mouse, and press the sell button (-).

Do the same buy and sell action for each green grouping through the end of this year. Be sure and click on yesterday's bar to finish this series of buys and sells.

When you're finished. You should be able to open your Challenge results page (Esc) that will look something like this:

Constellation trader challenge results listing each buy and sell taken on the green bar groupings

Click the button below to see the equity chart which will appear and look something like this:

Equity chart for 2026 showing the green bar trades against buy and hold and SPXL in the Constellation trader

The lavender SPXL line outperformed everything, and although B&H slightly outpaced my own trades (green line), after doing the same thing since 2016, look at the next chart and see how my trades and the SPXL crushed buy and hold:

Equity chart from February 2016 showing the green bar trades well ahead of buy and hold

What This Tells You About Holding a Position

Last night I explained the basics of how to use this tool, but my point here is that you can increase your chances of a better trade if you pay attention to the green bars below the signal line. Those bars can show whether strength exists beyond the peak of the signal line's short-term oscillation. If you keep seeing strong green bars, you can decide to stay in a position longer (which is exactly what we're seeing currently on the chart - large green bars).

A note on Constellation: this is a beta version and is not yet on the member menu. You can reach it directly at www.stockforecasttoday.com/constellation, and your feedback while it is in beta is genuinely useful.

Cycles Predict The Market Days/Weeks In Advance - See How

If you would like to follow this work as it develops, along with the daily Forecast charts and commentary, you can find everything inside Market Turning Points.

Author, Steve Swanson, has been tracking market cycles since 1990 and is the founder of Market Turning Points. He developed the Forecast Charts, the Visualizer, and the Cycle Signals used by MTP members, and publishes market commentary every trading day.