WRO #73 UPDATED Quick, QuickSand & Grateful Dead HOLDING Rules

Mike Webster’s Q/QS/GD Holding Rules

Mike Webster updates his Quick, Quicksand, and Grateful Dead (Q/QS/GD) holding rules—a staged exit method designed to help investors stay with strong stocks while reducing positions as relative strength weakens.

The update mainly simplifies the middle, Quicksand, signal. Quick and Grateful Dead remain conceptually unchanged.

Method and indicator setup

The system compares a stock or ETF’s relative-strength (RS) line with moving averages, using a benchmark such as the S&P 500. MarketSurge supports up to four RS moving averages. Webster uses three for signals and suggests setting the fourth to a one-period simple average in the same color as the RS line to make it easier to see.

His example settings are:

Chart timeframe Moving averages Weekly 8-, 13-, and 21-week EMAs Daily 21-, 34-, and 50-day EMAs Monthly 5-, 8-, and 13-month EMAs

Webster says he is still testing the monthly settings. The moving averages correspond to Quick (fast), Quicksand (middle), and Grateful Dead (slow or long-term). A move below each successive level prompts staged selling; the slowest signal exits the remaining position.

The system is intended as a holding framework, not a complete buy-and-sell system.

Position-sizing framework

Webster emphasizes that position sizes should be adapted to the investor and the stock. His percentages are examples, not prescriptions.

For example, an investor with a 25% maximum position might use a 15% core, leaving 10 percentage points for discretionary decisions or other sell signals. The 15% core can be divided into three 5-percentage-point portions for Quick, Quicksand, and Grateful Dead.

If the position is still at 25% when a Quick signal arrives, the example reduces it to 15% to return to the core, then sells another 5% for the signal, leaving 10%. A Quicksand signal can prompt another 5% reduction, with the remaining position sold on the Grateful Dead signal.

Other approaches include selling smaller amounts at earlier signals for a favored stock, or selling more aggressively for a riskier, high-volatility holding. For smaller positions, Webster suggests sizing the core in proportion to the maximum—for example:

• A 5% maximum with a 3% core
• An 8% maximum with a core of around 5%

He notes that smaller positions may help investors trade more confidently and limit drawdowns.

Rebuying after a sell signal is not mandatory. Under this system, Webster’s rule is to wait until the RS line recovers above the relevant moving averages before buying back.

Timeframes and cautions

Daily signals are faster and may prompt earlier exits; weekly signals are slower and can help investors remain in powerful trends. Webster generally favors daily charts earlier in a move, then considering weekly charts once a meaningful profit has developed. He cautions that daily-only trading can make it difficult to hold major trends.

Monthly charts may produce fewer trades and can prompt late exits, especially if signals are judged only at month-end. When uncertain, he suggests moving to a shorter timeframe.

For testing, Webster recommends Fibonacci-sequence periods as a starting point: 3, 5, 8, 13, 21, 34, 55, and 89. He says he would probably stop at 55. He also refers to Bill O’Neil’s 8-week rule and the practice of holding above the 10-week moving average, while noting that these approaches have drawbacks too.

Assets, benchmarks, and examples

Stocks and company examples: Qualcomm (QCOM), JDSU (the subtitle’s description of its current name is unclear), Charles Schwab (SCHW), Taser, Cisco (CSCO), Amgen (AMGN), eBay (EBAY), Chipotle Mexican Grill (CMG), and Netflix (NFLX), which is used for a chart demonstration.

Benchmarks and instruments: S&P 500, SPDR S&P 500 ETF (SPY), iShares Russell 2000 ETF (IWM) for small caps, SPDR S&P MidCap 400 ETF (MDY) for mid caps, and the Nasdaq.

Webster gives a historical chart example of a sale around $424.09. It is an illustration, not a general target or performance claim.

Market context and disclosure

Speaking on May 25, 2026, Webster says market conditions feel unusually heated and resemble the late 1990s. He also compares the volatility of some historical chart patterns with 1928–29. He says the duration of these conditions is unknowable and plans to review 1997–2000 model-book examples. He cautions that patterns suited to unusually volatile markets may not work in normal conditions.

Webster says he is not an investment adviser and that the video is not investment advice. He urges viewers to do their own due diligence and consult an investment adviser if they need advice.

Presenter and sources mentioned: Mike Webster (presenter), Bill O’Neil (trading rules and influence), Joe Fami (position-sizing anecdote), and Ross and Chuck (collaborators on a historical model book).