6:50 PM – Late in the trading day on Friday, May 16, our system triggered BUY signals on Capital One (COF) and Discover Financial (DFS) based purely on technical chart criteria.

However, it was later confirmed that these two stocks are involved in a pending merger scheduled to close this Sunday, May 18 — a major piece of fundamental news that was not accounted for by the screening mechanism used in our system’s signal process.

What Happened

• The buy signals were technically valid based on price action, trend strength, and volume patterns — which is what our system is designed to detect.

• Unfortunately, the merger was not filtered into the trade logic at the time of signal generation, resulting in false buy signals.

• To make matters more complex, Moody’s downgraded the U.S. credit rating after the close, which may affect both stocks further.

What We’re Doing About It

• We are reviewing this gap in the screening process to ensure similar merger-related events are flagged before any BUY is issued.

• We’ll continue to monitor COF and DFS closely and will issue a clear follow-up if an immediate exit or adjustment is needed.

This is a rare but important example of how even a rules-based system can misfire when real-time news isn’t captured properly – and how all investors are strongly advised to do their own due diligence.

Transparency is key — and we’ll always let you know exactly where we stand.