Hold signal.

The system will hold a short position through the weekend, although a buy signal was close to being issued. 

Short Signal

Looks like I'm getting a signal to short the market today.  Bulls should tread cautiously. 

Merry Christmas!

News:  I'm about midway through an upgrade to my system.  This may be the final piece of the puzzle, although I've said that before. :)  The changes will be 2 fold...  The first is to incorporate investor sentiment into the model.  In a nutshell, the system will not go long during overly bullish sentiment, and will not short when everyone is bearish. This leads into the second change... Beginning in 2011, no longer will there be just 3 signals:  Long, Short, or Hold.   Two additional signals will be added to the mix: Sell and Cover. 

This means the model may not always be in the market like it is now.  The model can still flip from long to short, but depending on certain conditions, sometimes the model will flip from long to sell, where longs are closed and a short position is not opened.  Or vice versa, a flip from short to cover will be a possibility when the system deems it unwise to open a long position.

I'm excited to launch these new features.  Backtesting shows some very positive results.  I'm on a trading vacation until mid-late January, but I'll attempt to update this site daily.  Happy holidays!

12/22 - No change...

Today's signal: Hold

Vix down 6% and on pace to hit zero by mid-January. :-p

12/21 Hold Shorts

Signal for today: Hold

Surely this is setting up for a decent size pullback in the weeks to come.  I don't feel too bad - seems no one's signals/systems are working too well right now.  Thanks POMO. 

Short signal - 12/20

System said short at close.  Tomorrow "should" be a down day for various reasons.  But strong seasonality beginning tomorrow says otherwise.  So we'll see....

Long signal

Getting a buy signal today.  I will not be following it as this was my final week of trading until next year. Have a good weekend!

Getting a short signal...

Current market status: Healthy
Today's Signal: Sell/Short

Commentary
A pretty solid sell signal was generated today.  But does the market even know how to go down? 

Covered and waiting...

Model is confused again.  Covered half my shorts.  Will likely dump the rest Thursday.   The actual model output was "hold" for anyone counting.  Waiting for the next signal before making any other moves (beside unloading my shorts tomorrow).  Have a good night.

Buy...

Some bad data issues caused my system to generate a hold signal Tuesday, but when I manually plugged the correct data in, it was a buy.  Due to the error, I'm still holding shorts. That may be okay b/c today's action is pointing to a short signal - so long as there is no big sell off this afternoon.

Holding Shorts

Current market status: Healthy
Today's Signal: Hold
Previous Trade: Sell/Short

Commentary

Many things are pointing to at least a small pullback coming soon, so I'm holding on to my shorts for the time being... Lots of potentially market moving news tomorrow.  It will probably just mean another big up day. :)

Weekend Thoughts...

Friday resulted in a hold signal, which means I'm carrying my Thursday shorts through the weekend.  What will it take to bring this market down a notch?  All I can come up with this weekend is China...  Well, that and extreme optimism as suggested by a host of sentiment indicators.  I'm pretty much at the point where I want to say screw it and just go long.  Liquidity is solid.

This may be grasping at straws, but besides the extreme sentiment values, another short term negative is the small fact $INDU surprisingly didn't make a new high last week.  Additionally, negative divergences are plentiful, but as noted, liquidity is strong and divergences mean squat until it weakens.

I will be posting November stats shortly.  Obviously, they weren't as hot as October.

Short signal

Current market status: Healthy
Today's Signal:  Sell/Short

Commentary
The model produced its first short signal since turning "healthy" a few days back.  In this market, however, a sell signal probably means buy.  And a buy signal means buy even more.  After sitting on the sidelines the past few days, I opened up another short position at the close.  Wish me luck, I'm going to need it.  :)

Hold

A hold signal is posted today.  My positions are all closed and I'm on the sidelines for now. 

Healthy again.

The market status, as defined by my model, has flipped to healthy again.   Generally, it would be wise to close all positions and wait for the next signal.  However, I am spotting a bearish edge to the market.  Following 2 gap up green candle days, when the 3rd day gaps down and forms a red doji candle, the 4th day (Monday, in this case) is bearish.  With this in mind, I plan on holding my short position into Monday.

Shorting time...

Current market status: Uncertain
Today's Signal: Sell/Short
Previous Trade: Sell/Short (triggered 12/1)

Commentary
Hard to short the market when it has so much upward momentum.  But I took a healthy short position at the close.  Today's sell signal makes 2 in a row, and like I stated yesterday, that may be my plan for 2011.  Sell longs on the first sell signal, then go short on the 2nd.  Regarding the health of the market, I have conflicting indicators.  This is a rare occurrence and should be resolved in the next few days, but for now I just labeled it as 'uncertain'.  Cheers.

Sell signal...

Current market status: Uncertain ?
Wednesday's Signal: Sell/Short

Commentary
The 2nd buy signal last week turned out to be a winner, as is usually the case.  A potential strategy I will be working on during my coming "trading vacation" (mid-december to mid-January - for wash rule/tax purposes) is to close a position on the first signal and then open a new position on any 2nd signal that may follow.   For example, we had 2 buy signals last week... 11/26 and 11/30.  On the first signal, I would cover shorts on 11/26, then initiate a long position 11/30.   Sure, sometimes you won't get 2 signals, but at worst, you'll face no risk on the sidelines after that first signal.  This is just one idea.  I have others as well, and I'll have a month to backtest all of them.  Expect some changes next year.  Thanks!

Current market status:  Unhealthy
Today's Signal:  Buy

Commentary
Another consolidation day.  I'm slightly bullish the next few days, but bearish beyond that.

Hold

Current market status:  Unhealthy
Today's Signal: Hold
Previous Trade: Buy/Long (11/26)

Commentary
Wacky day.  Smells fishy... smells like POMO...  Hold tight.

Buy

Current market status:  Unhealthy
Today's Signal: Buy/Long

Commentary
While I wasn't paying attention this afternoon, a buy signal reared it's head.  I am somewhat skeptical after another large spike in the VIX. That's 4 in the past 10 trading days and could spell trouble.  I am bearish for other reasons and doubt I will make any serious bets on the long side this upcoming week. 

Another Short Signal

Current market status:  Unhealthy
Today's Signal: Sell/Short

Commentary
Another short signal was generated today.  However, I will wait til Friday to add more shorts.  After a huge up day, this rally has to have more steam left in the tank.

Hold

Current market status: Unhealthy
Today's Signal:  Hold
Previous Trade: Sell/Short (generated 11/18)

Commentary
Not a whole lot to say.  Everybody and their sister knows the next 2 trading days are bullish, historically speaking.  Looking at late night futures action, I think they're going to be right after all.  On the other hand, we had another down thrust according to my system, and this is bearish in an unhealthy market.  I think there will be some upside the next few days, but next week could be ugly for bulls.  Wed/Fri could offer some excellent opportunities to add shorts.  Time will tell. 

Hold

Current market status: Unhealthy
Today's Signal:  Hold
Previous Trade: Sell/Short (generated 11/18)

Commentary
Strong seasonality on tap for this week, but bearish evidence is starting to mount. I think the next drop could be a big one.

Hold signal today...

Current market status: Unhealthy
Today's Signal:  Hold
Previous Trade: Sell/Short (generated 11/18)

Commentary
I attempted to add to my short position at the close but my limit order was just missed by a few pennies.  Usually I won't add to my position on a hold signal, but Monday is the day after Opex which has a bearish seasonality.  Perhaps there will be a good entry point Monday morning. A gap up to resistance would fit the bill. Have a good weekend!

Sell longs... and short!

Current market status:  Unhealthy
Today's Signal: Sell/Short

Commentary
It was hard to go short at the close after such a strong move upward.  Then I remembered Rule #20 over at the Kirk Report.  I only opened a smallish short position which I will hold until my system says otherwise.  Next week is statistically bullish (well, Wed and Fri anyways) so I'm hoping to go long around midweek.  We'll see what my model spits out.  Good luck all.

Hold

Current market status:  Unhealthy
Today's Signal: Hold
Last Trade: Buy/Long (11/09 & 11/12)

Commentary
Not much to add today.  We formed an inside bar, which is generally considered bullish when in a downtrend. Will be waiting patiently for a sell signal so I can dump my small long position and try to make some money on the short side.

Unhealthy...

Current market status:  Unhealthy
Today's Signal: Hold
Last Trade: Buy/Long (11/09 & 11/12)

Commentary
The market experienced a large enough drop today to flip the main status of my model.  However, after such a large run up the past few months, I don't expect the bulls to go down with out a fight, therefore I expect some kind of snap back rally in the very near future.  At that time, I hope to sell my longs and flip short. 1190-1195 is a reasonable target.  Hopefully my model will lead me in the right direction.  It's obvious to see my system has problems during transition periods, but it will do pretty well when a new trend is being established.  As long as we don't go skyrocketing to new highs, we should be ok. 

For comparison's sake, I mentioned earlier today how my system fared in April.  To recap, my system flipped to unhealthy on Apr 27.  There was a sizable rally the following 2 days, with a great exit for trapped longs on Apr 29.  We all know what happened after that.  Additionally, I mentioned that in every case, there was always a lower close below the closing price of the day we switched from healthy to unhealthy (Tuesday).  So if you're considering shorting, lower prices are in our future.  Just watch out for a shakeout rally the next couple days.

Hold

Current market status:  Healthy
Today's Signal: Hold
Last Trade: Buy/Long (11/09 & 11/12)


Commentary
The upthrust indicator from earlier today evaporated due to the late day sell off.  Regardless, the system posted a hold signal.

Buy generated

Current market status:  Healthy
Friday's Signal: Buy/Long

Commentary
I added to my long position at the close Friday.   This coming week is OEX so it could be interesting.   I have nothing much to add, so I'll just leave what I posted earlier on Friday.  Take care.

My model is showing a down thrust today.  Down thrusts (and up thrusts) are a relatively new feature of my system.  Thrusts of either kind in a healthy market are usually short term bullish. The last time the VIX was up 11% in 1 day was a couple weeks back.  The following day TNA was up 4.5%.   The down thrust before that occurred 9/23 and TNA was up over 9% the next day.  Down thrusts in an unhealthy market are bearish, so at this point I'm not too worried since the market is healthy.  The system is yielding another buy signal today, meaning I will add to my long position.  On a related note, I went 100% S fund in my TSP account.  Good luck all and have an enjoyable weekend.

Hold

Current market status:  Healthy
Today's Signal: Hold
Last Trade: Buy/Long (11/09/10)


Commentary
Hold that long position.  The system suggests higher prices are still to come.  A BIG thanks to all our Veterans. 

Hold Long

Current market status:  Healthy
Today's Signal: Hold
Latest Trade: Buy/Long (triggered 11/09/10) 

Commentary
After some morning weakness, which turned out only to be a shakeout of weak longs, the day ended strongly.  My system generated a hold signal. Somewhat disappointed the market sold off immediately following the close.  I am guessing tomorrow will be boring with low volume.  QE2 officially starts Friday and continues almost daily until the printing presses break.

http://www.newyorkfed.org/markets/tot_operation_schedule.html

Buy

Current market status:  Healthy
Today's Signal: Buy/Long

Commentary
A robust buy signal was issued today.  Maybe we'll see another day of down/chop before we head back up, but I really think the downside is limited.  Keep in mind, the market is about to be flooded with liquidity beginning later this week - in the form of QE2. 

Lackluster Monday

Current market status:  Healthy
Today's Signal: Hold
Last trade:  Sell/Short (11/5/10)

Commentary
I was unavailable today, but looking back at the action that was probably a good thing.  Volume was pretty anemic.  We were very close to generating a buy signal, so I think tomorrow could go either way.  I'm still short from last week though. I'm thinking there will be a little pullback into midweek before another surge up late in the week when QE2 is expected to kick off.

Busy Weekend

I spent a bunch of time this weekend making a minor tweak to the model to incorporate what I'll call a "thrust" component.   In a nutshell, when there is a significant drop in the VIX in a "healthy" market, the model will go with the flow as opposed to selling into it.  This generates fewer sell/short signals (again, only in a "healthy" market) which is generally what one would expect.

That said, even after the tweak, a short signal was generated on Friday afternoon.  This gives me more confidence and I may add to my short position early Monday if we see some strength in the morning.

Good luck all... and go Browns!

Current market status:  Healthy
Today's Signal: Sell/Short (yet again)

Commentary
QE2 is wiping the floor w/ my system. My system is tuned for trending, but requires at least a small amount of choppiness.  Thrusts in any one direction can be a killer.  Once all this exuberance dies down next week, hopefully it will come back into line.  I'll post some stats this weekend on how this equity draw down compares to others in the past.  A tidbit of hope... A co-worker who is notorious for selling bottoms and buying tops just bought into stocks today w/ his retirement account.

Thursday thumping...

Current market status:  Healthy
Today's Signal: Sell/Short


Commentary
Not a pleasant day to be short, to say the least.  FWIW, the system produced another short signal at the close.  But adding more shorts here would be nuts. There appears little doubt we are going higher, possibly much higher.   Being short right now, when everyone is so bullish is a good thought, but it's way too early after such a huge upside breakout.

Hold

Current market status:  Healthy
Today's Signal: Hold
Last trade:  Sell/Short (11/2/10)

Commentary
Bullish sentiment has to be high after today.  Would like to see a pullback or correction of some kind now that QE2 is official - and before everything shoots to the moon in an inflationary environment.  Poor Dollar. Is gas going back to 4 bucks?  Thanks Ben, that'll do wonders for the economy.

Sell short and Oct. Stats

Current market status:  Healthy
Latest trade:  Sell/Short (11/2/10)

Commentary
Ok, first the good.  The long trade from Oct 26 turned out to be positive after spending several days in the red.  I got the big up day that I wanted... But now the bad.  I was a tad bit discouraged to see the ES take out 1193 after the close.  Next stop could be 1205+.  Tomorrow should be volatile, especially starting at 2pm.  Enjoy the action! Good luck and good evening. -JTrader


October Stats
8 Trades - 6 winners,
2 losers (75%)

% Gain/Loss: +34.31%**

**Basis TNA. Excludes fees, slippage, taxes, etc.

Trades
Date - Signal - TNA

Sep 27 - Long - 45.73
Oct 01 - Short - 47.82
Oct 04 - Long - 45.91
Oct 05 - Hold
Oct 06 - Hold
Oct 07 - Hold
Oct 08 - Short - 50.79*
Oct 11 - Hold
Oct 12 - Long - 51.34
Oct 13 - Hold
Oct 14 - Hold
Oct 15 - Hold
Oct 18 - Short - 54.47
Oct 19 - Long - 50.32
Oct 20 - Short - 52.57
Oct 21 - Hold
Oct 22 - Short
Oct 25 - Hold
Oct 26 - Long - 53.61


*These signals changed to "hold" following the recent tweak to incorporate thrusts.

Another Hold Signal

Current market status:  Healthy
Latest signal:  Buy/Long (generated 10/26/10)

Commentary
At the close, both the SPY and VIX were up again (!) which is 5 of the past 6 sessions.  I don't have stats on it, but that has to be pretty rare.  Most indices had outside days today also - and the bearish evidence is starting to stack up.  My system showed a sell this morning and had me licking my chops.  Then it went neutral by late morning and nearly generated a "buy" at the close.  I ended up adding to my long position, but my position is still quite small due to the increased volatility.  I'm hoping for a big white candle soon and a short signal so I can pounce.

Holding small long position into weekend.

Current market status:  Healthy
Latest signal:  Buy/Long (generated 10/26/10)

Commentary
Yet another "hold" signal today.  Market is very indecisive.  And once again, both the VIX and SPY finished higher.  That's 4 of the past 5 days! This is usually bearish, but we have strong bullish tendencies early next week, plus the fed meeting.  Should be an interesting week coming up. Until then, have a good weekend and thanks for reading!

Current market status:  Healthy
Latest signal:  Buy/Long (generated 10/26/10)

Commentary
Another blah day.  Once again, VIX and SPY were both up which of course is bearish heading into Friday.  Strong bullish seasonality Mon-Wed next week from many different angles.  Will consider adding to my long position at the close Friday.  Good night.

Hold Long

Current market status:  Healthy
Latest signal:  Buy/Long (generated 10/26/10)

Commentary
A strong "buy" this morning transformed into a "hold" after the nice afternoon rally.  Same result either way, I suppose, although I would've added to my long position had the weakness extended into the close.  I am currently holding a relatively small long position.  Most likely all of my positions in the near future will be small with all the volatility expected the next week or so.  It seems everyone is thinking it's going to be a sell the news event after the fed meeting, but how often is everyone right?!?  So, I'm not so sure...

It's a buy signal...

Current market status:  Healthy
Latest signal:  Buy/Long (generated today)

Commentary
After nearly getting a buy signal yesterday, we did get one today.  I have to admit I don't have much faith in this signal.  I didn't put much money on the line.  Took a loss on the last Wed's short signal. :-/  System is now 5 for 7 this month (71% now, which is just a shade under it's historical average of 74%).  See ya tomorrow!

Hold

Current market status:  Healthy
Latest signal:  Sell/Short (generated 10/20/10 & 10/22/10)

Commentary
The system darn near flipped to a buy at the close.  I'm guessing a slightly red day tomorrow as we consolidate, then we continue upward the rest of the week.

October Results thus far...

Date - Model Output - Closing price of TNA (my etf of choice) when the signal was generated

Oct 01 - Short - 47.82
Oct 04 - Long - 45.91
Oct 05 - Hold
Oct 06 - Hold
Oct 07 - Hold
Oct 08 - Short - 50.79
Oct 11 - Hold
Oct 12 - Long - 51.34 (miss)
Oct 13 - Hold
Oct 14 - Hold
Oct 15 - Hold
Oct 18 - Short - 54.47
Oct 19 - Long - 50.32
Oct 20 - Short - 52.57
Oct 21 - Hold
Oct 22 - Short

Since Weds, we've had 2 short signals w/ no new buy signal, so I added more shorts Friday. I dislike holding shorts through the weekend since Mondays are usually positive, but I'm a slave to my system.  Back-testing my model back to 2008 shows a 74% winning percentage overall.  September had 7 winners out of 8 for a very nice 87% winning percentage. It is 5-1 this month (83%). The 1 loss was minimal.  The short trade from Weds is currently wrong (TNA closed fri @ 52.74).  We'll see what Monday brings.  Good luck all, and thanks for reading!

Current market status:  Healthy
Latest signal:  Sell/Short (generated 10/20/10 & 10/22/10)

Commentary
Another sell signal was posted.  I increased my short position on the close.

Staying short...

Current market status:  Healthy
Latest signal:  Sell/Short (generated 10/20/10)

Commentary
The reversals gave my system fits and had it flipping between buy and sell most of the day.  But when the dust settled, it remained short going into Friday.   If we see early strength back up toward 1190, I will add more shorts.  Otherwise, I'm content with my current position size heading into the weekend. 

Another interesting thing to point out... Hitting a new nominal high Thursday in the SPX resulted in us being a good chunk closer to flipping to an unhealthy market.  That sounds counter-intuitive, I know.  Regardless, I was happy to see the new high (even though I was short).  Gains come much faster in an unhealthy market when you're short vs. having a long bias in a healthy market that usually slowly melts up.  Imagine being short for the flash crash May 6.   The system flipped to unhealthy on Apr 27th and was mostly short. There were some good long trades as well.

Sell

Current market status:  Healthy
Latest signal:  Sell/Short (generated on the close today)
Previous signal: Buy/Long (generated 10/19/10)

Commentary
I could've lived without that minor sell-off into the close, but regardless the S&P held up enough to trip a short signal. I won't offer any predictions like I did yesterday b/c it's obvious I am clueless when it comes down to it. 
(Updated 4:05pm)

Cover and Buy!

Current market status:  Healthy
Latest signal:  Buy/Long (generated on the close of 10/19/10)
Previous signal: Sell/Short (generated 10/18/10)


Commentary
Nice trade from yesterday!  I generally buy or short the symbol TNA (3x leverage small caps) for my trading, and today was one of my better days - to say the least.  I covered my short in the final hour and went long near the close. We'll see how it works out.  It wouldn't surprise me to have another down day tomorrow, then maybe up into the end of the week. That's just speculation, though. I do as my system tells me, and try not to think.  :)

Sell signal.

Current market status:  Healthy
Latest signal:  Sell/Short (generated on 10/18/10)


Commentary
The system produced a sell signal on the close today.  Looks like Apple selling off on the news is initiating the much anticipated pullback -  futures are red.  So far, so good.

Current market status:  Healthy
Latest signal: Buy/Long (generated 10/12/10)

Current market status:  Healthy
Latest signal: Buy (generated on the close of 10/12/10)
Previous signal: Sell/Short (generated 10/8/10)


Commentary 
Model switched signs today.

Current market status:  Healthy
Latest signal:  Sell/Short (generated on the close of 10/8/10)
Previous signal: Buy/Long (generated 10/4/10)
System gain/loss between signals (basis SPY): +2.45%

Commentary 
The system remains on a sell/short signal from last Friday.  We were very close to getting another short signal today, but the SPX just barely outperformed the RUT by a fraction of a percent. One requirement for generating a sell/short signal in a healthy market is for TNA to outperform BGU.  Regardless, the last signal prevails and hopefully a pullback is forthcoming. 

Trying something new...

I have a new timing model I'm working on to make the trading in my personal account more systematic and mechanical.  The model first determines the health of the market, then calculates buy and sell signals accordingly.  When the market is "healthy", the model goes into "buy the dip" mode.  When unhealthy, it will short any significant strength.  Backtesting the data has shown some encouraging results.

In general, it will produce anywhere from 1 to 3 signals a week, so by all accounts, this is a short term swing trading model.  However, it appears it can also be used for longer term signals.  When the market turns healthy, go long.  When it becomes unhealthy, sell.  Those signals come much less frequently...only about 5 to 8 times a year.

One thing to note, the system will go short in a healthy market and go long during an unhealthy market. 

I will post here on a daily basis the current status of the model.   See below. 

Current market status:  Healthy
Latest signal:  Sell/Short (generated on the close of 10/8/10)
Previous signal: Long (generated 10/4/10)
System gain/loss between signals (basis SPY): +2.45%

Buy signal forthcoming...

Ok, the S&P has rallied ~100 pts and my system still hasn't fired a buy signal yet. Nice, huh?

However, it appears a buy will be coming. We just need a pullback to the 34 EMA (currently near 1100 - but rising 3 pts everyday). A successful test of that trend line will result in a buy. Nothing is guaranteed, though. In March, we never touched the line until days before the flash crash. We also got a "buy" back on July 30th which resulted in the first loss of the year for the system.

We'll see what happens this time... I suspect patience will be required before the buy is generated. 1125 on the S&P should be strong support.

Observations from the G-fund...

The TSP Trend System went into the G-fund on 8/24/10 on a day the S&P closed at 1052... some 60 points lower than where we are now.  Remaining true to the system, I poured 80% of my funds into the G, keeping 20% exposed in consideration of the positive CCI divergence and other bullish happenings at the time.  Currently (I'm writing this on 9/11), we find ourselves at pretty stiff resistance.  A declining trend line, the 200 day SMA, and the 50% retracement level from the March09 lows to April10 highs. 

Putting reality aside for the moment, here is my short and longer term forecast.   I feel we will consolidate sideways or slightly down this upcoming week to alleviate the overbought conditions, then we rally up to 1170 over the next few weeks.  1170 is my target before we tank back down to 900. Following the fall to major support at 900, I think we rally to new recovery highs within the next 12 months.  I'm guessing between 1275 and 1300.  At that point, I'm loading up on shorts, b/c I foresee a fall below 666. Of course, this is all just fun speculation.  The point of this blog is not for my ridiculous forecasts, but to post updates and signals on my short term TSP trend system.  That said, the system remains on a sell for the time being, and a buy signal won't be generated until my trend lines cross up and the S&P bounces positively off the 34 EMA.  Should my aforementioned forecast become reality and we start our trek up to 1170, I figure a buy signal would be triggered later this month.  Until then, I'm hanging out in the G fund.

If anyone else besides me is reading this, I bid you best wishes!

Trend System Sell - Tuesday or Wednesday...

The green (13MA) line is about to cross below the 34 EMA red line, indicating the trend is down again.  This is a sell signal and hints at more downside in the near future.  It has not crossed yet, but is on pace to cross Tuesday or Wednesday.  I will put another post up as soon as I'm sure they have indeed crossed.

On the bright side, we are seeing some positive divergence in the CCI indicator, posted just below the SPY here.  More times than not, that is a pretty good indication to buy. It's unfortunate the system is out of sync.  We'll see which indicator is correct, the trend lines or the CCI. 

The Tidal Wave Man was mentioning year to date performance today, so I figured I would post the stats of my trend system on here....
(Percentages are calculated using the C-fund)

 12/31/09 - 1/6/10:  +2.03%
 2/12/10 - 2/17/10:  +2.27%
 6/03/10 - 6/15/10:  +1.21%
 7/07/10 - 7/13/10:  +3.30%
 7/30/10 - 8/2?/10:  -2.98% (as of close Monday)

Total return for 2010:  +5.83% 

Not too bad.  The biggest miss was the March and April rally when the system was in the G fund.

Attached: Image of all buy/sell signals for 2010. Click to enlarge.

The bears are loose again...

The bullish scenario has been hammered the past couple days in a very unhealthy way.  Rallies should be sold or shorted.  My system is still in the market, but won't be for long as I suspect a downward cross of the the EMA lines will occur shortly. Hopefully, when that happens the market will have rallied a bit (a la May 12) so I can get out for a better price.  I see the market going to anywhere between 900 to 1030 sooner than later.   On the bright side, there are some massive gaps up above.  A major bradley turn date was 8/10 which I dismissed at the time.  Oops. 

I'm always wrong with predictions, but I'll give it a shot anyway...

TSP System update...

TSP Trend System - Buy Signal - 7/30 - 11:30am

The uptrend that started a few sessions back has been confirmed by a bullish (green) bounce off the moving averages.  This is a buy signal. 

Time to go into stocks.  I'm doing 50% C, 50% S.  In the future, a sell signal would be generated 1 of 2 ways. A) By piercing the upper bollinger band, or B) If a downtrend commences - the ema's cross back down.  (That would be bad and would probably lead to a retest of the June low...)

The funny thing is this "buy" signal comes on the same date as the tidal system "sell" signal . (The next buy signal for that system falls on Aug 6).  We'll see which system is right.

TSP Trend System - Bullish Cross

As of yesterday, July 26th, we have started an uptrend as defined by the TSP trending system.  (The faster moving average has risen above the slower one.)

Technically, the system waits for a pullback to the 13MA (green) line before kicking off a buy signal, but like we saw in March 2010, that pullback may not come as these rallies have a tendency of leaving latecomers in the dust.

 <---March 2010









So, going 50% into C or S makes some sense right now, then waiting for a pullback to put the other 50 in.

Trend System Sell - 7/13/10

It's almost painful to sell this early into what is potentially a sizable rally shaping up.  But, I am following my system, which states when in a downtrending market (which we are certainly still in), one must be cautious and sell at the 34 EMA.   The next buy signal would come after another dip to the lower bollinger band.  Alternatively, if we continue to go up, the next signal would come after the trend lines turn positive.
7/7 - 7/13 gain in C Fund: +3.30%

The TSP Trend System offers another buy signal today...

Well, I've deviated from my own system the past few months. I'm still 100% C at 1067, but here is what the system has been up to.

Here are the rules, as a reminder.

Uptrend market. (Green line above red.)

Buy on a bounce off the 34ema.
Sell either at the upper BB, or when trend lines cross down.

Downtrending market. Red below green. (Current market) 
Buy on 2nd green candle following a fall below the lower BB. Sell on a touch of the 34 EMA line. 

Targets

SPX Daily


Assuming the SPX can get back over the 200 day MA, here are some potential targets.

1130 is a 50% retrace and would be in the vicinity of the 50 MA.

1150 would make a nice head and shoulders, and is a ~61.8% retracement.

1220 would be a double top.

Anything higher would likely create significant negative divergences, and while the rest of the world would be massively bullish, we'll be doing the smart thing and selling into the strength. New highs would only help to enforce the expanding (bearish) megaphone pattern currently on the weekly and monthly charts.

Weekly SPX


First things first though, we really need to get above the 200 day MA sooner than later...Bad things can happen below the 200MA. Fortunately, Friday's rally took both the Nasdaq and Russell back above the 200. SPX should follow?

That worked well

Cautiously bullish.

Now that the CCI triggered a buy signal, we'll be looking for a potential exit. The 13/34 trend lines are solidly bearish, meaning we have to be careful. If you look at the chart provided, this is setting up almost identically to February. Even the CCI is almost an exact match. The only problem is that this time, the 200 day MA didn't act as support for the S&P and we are currently below it. That's a problem. However, on the bright side, the leaders - Nasdaq, Russells, Transport, and Bank Index - are ALL above the 200 day. Because of this, I am bullish and feel we have made a short term bottom.

I will be looking to exit my position either at the 34 EMA line (currently up near 1140) or perhaps when the CCI breaks south of the upward trend line. If we see lots of strength in early June, which is what I'm expecting, I may hold on to my position until we see some divergences set up on the CCI (higher SPX values, lower CCI's) like we saw in April on the chart below. At that point, we'll probably see another bearish megaphone pattern, but now I'm getting too far ahead. If you missed the buy signal, it's definitely not too late to get out of the G fund and into stocks. We'll see another short covering rally of some sort shortly. All it's going to take is one good piece of news.

Going into C fund.

Comp-Q and S&P are having a CCI breakout today, which is a buy signal.

I think the anticipated short squeeze rally should take us to SnP 1130 to 1160 before we think about selling. Of course, there is also a slight chance we could revisit 1040. Choose your IFT percentage carefully. I'm going 100% C. :)

No buy signal yet... (May 19, 2010)

I'm still in the G fund waiting for an indication that it's safe to go back to stocks. I suspect the buy signal will come in the form of a CCI breakout above the declining trend line. This isn't always reliable, but most times it is, and we are playing the percentages here.

Latest Thinking.. May 08 2010

The warning signs were all flashing. Bearish CCI Divergence - check. Expanding Megaphone Pattern - check. Erratic intraday trading with a loss of liquidity - check. The chart below has some useful information.

Now the focus shifts to looking for a bottom. Here are my thoughts. First off, I fully believe we'll see new recovery highs, or at the very least, a double top. There was too much strength before the crash, with New Highs vs. New Lows being very bullish. With that said, going long right now wouldn't be a terrible thing, but I think there is a better price to be had.

I will be looking for any of the following things to happen before going 100% S in my TSP.

1) A lower low on the SPX with a higher CCI value. This is strong bullish divergence... (See Early February.)

2) 2 consecutive green candles above the lower bollinger band.

3) A bounce off the cyan line which connects all the way back to the 2007 and 2008 peaks. Look how we bounced off back in February.

Bearish Megaphone patterns abound...

First up, check out the short term expanding diagonal in SPY.


Also, here's a longer term megaphone in the works (thanks Jim). Target for NYSE looks to be 6500-6600.

Courtesy Stocktiming.com

As for the TSP, I'm looking for a convincing bounce off the 34EMA before jumping head first into the S fund. It could happen this week. I'll keep this site updated with the latest developments and my thinking.

The CCI and CMF

I'm loving these 2 indicators. They've been very profitable the last few weeks, not for the TSP for me yet, but for my personal account. When the CCI or CMF is decreasing, draw a subjective resistance line, and when it rises above that line, buy. Conversely, when the CCI/CMF are rising, draw a subjective line as support and when it falls below, sell. Here are some of the stocks I've been playing. The last chart shows some potential SPY buy & sell signals. Sometimes the CCI works better, sometimes the CMF. When they both show a signal, confidence is even higher.

FNM


PPHM


SIRI


ANDS



SPY with fictitious/hypothetical signals...

Another sell signal...

Besides the "tidal technique" and my "trending technique", Jim introduced to me a third indicator that works pretty damn well.

It's the NYSE McClellan Oscillator and Summation Index. When the McClellan Oscillator moves above zero, it's a buy signal, and when it drops below zero, it's time to get into the G fund. The Summation Index is basically a derivative of the oscillator. When the oscillator is above zero, the summation curve is black. When it's negative, the summation curve is red. See below.

NYSE McClellan Oscillator (I drew in some green and red lines indication "buy" and "sell" dates. Obviously, you won't see these on the raw chart in the link below.)


Matching NYSE Summation Index (Buy black, sell red)


You can see we have dropped below zero and the summation index is red. A pullback is coming. Go long only when the oscillator convincingly moves above zero.

The NYSE MO can be found here:
http://stockcharts.com/charts/indices/McSumNYSE.html

And NYSE Summation Index here:
http://stockcharts.com/h-sc/ui?c=$NYSI,uu[m,a]daclynay[dd][p][i]&pref=G

Waiting for a buy signal...

Ok, now that the market is expected to correct at least a little, we need to focus on the 34 ema line. If we bounce off the 34 ema, a buy will be triggered. If (or when) that day comes, the S fund is statistically the better play to maximize profits. If the market crashes down through the 34ema, like it did back in Jan, there would be no buy signal at that time.

The 34 ema current is in the 1128-1130 ballpark, but rising about 2 pts each day. By the end of the week, it should be in the 1135-1140 range. So, that's where we need this correction to go.

Here's a graphic...


In the meantime, while we wait, here are 2 stocks I'm watching this week. Both are in uptrends, and buy signals would be generated as described in the graphics.

PPHM



CYCC

New TTS Signal: Sell

Well, my technical trend system (TTS) triggered a "sell" signal yesterday. The only problem - and it's a pretty big problem - is that the system never triggered a buy signal. grrrr

At any rate, the downside risk is now higher than the upside potential. So, if by chance you have any money outside the G fund, now may be a good time to get it back to safety.

The last time we hit the upper BB to trigger a sell, the market peaked 3 days later, and tanked hard 10 days later.

The spread between the 13 ma and the 34 ema is getting overextended as well indicating a pullpack is likely. Although that should be obvious as SPY has had 14 green candles in a row!!!!

System buy signal for TZA

Montz, this is for you...

My system has a handful of rules. In this case (TZA), rule B was satisfied. In a nutshell, rule B states that when in a downtrend, you buy following 2 consecutive green candles after a bounce off the lower bollinger band (42,2).

Good luck!

Time to short financials?

Sorry this post is off topic from our TSP's, but this is too good to ignore. Here is $BKX (Philly Bank Index).



This chart is very bearish. The rising wedge dating back to early 2009 was broken to the downside recently. Since then, the index has been trying to get back into the wedge, but has been unsuccessful. This action almost always leads to a significant correction. In a nutshell, it's time to buy some FAS puts, short FAS, or buy FAZ. Take your pick, they should all be profitable.

US Dollar Chart

My trend system is fairly effective not only for the S&P, but practically any other daily stock chart. Here's the chart for the US Dollar (ticker UUP). It shows perfectly how the system trips a buy signal.

The USD uptrend (13 went higher than 34) began back in december. However, at the time of the crossover, the price of UUP was too expensive, so the system waits for a pullback to the 34 ema before buying. The ema must hold as support, otherwise, the "buy" never materializes. In this case, the buy occurred Jan 15th...which wouldn't have been a bad day to go into the G-fund.

In an uptrend, the sell occurs when the stock hits the upper bollinger band. In this case, the USD first hit it on Feb 4th. So, the sell was triggered. Using that date to enter the C fund would've been a wise move, as the S&P was 1063 at the close.

So, if the inverse relationship between the USD and stocks continues, one could use the USD chart in this fashion to make IFT decisions.

The interesting thing is that both the S&P and USD are now in uptrends. It will be interesting to see what happens over the next few days/weeks.

System status: 100% G-fund

The upward trend cross is upon us...

It looks like today is going to be the upward cross of the 13ma and 34ema. Since the S&P is currently 17 points above both moving averages, it may be wise to wait for a pull back for a better entry point. The actual system won't trigger a buy until the s&p touches the 34ema and successfully holds above that support for a day.

However, on many occasions, the s&p won't touch the 34ema again for quite some time as it continues to go up, up, and away. If transfers weren't limited to 2 per month, I would buy 50% on the upward cross, and then the other 50% if the 34ema holds as support. If one likes a lot of risk, the upward cross could be a good entry point for 100% S fund.

If one were to enter stocks today, the current sell target looks to be between 1150 to 1160 (the upper bollinger band).

March 12 is next Tide technique buy signal

Awaiting the next buy signal...

I need a snazzy name for my system.

I'm thinking TSP-Trend system or the Trend Technique. Help me out Jim. At the end of my posts, I can give the status of my system and forecast a buy date. Something like this...

TSP-TT Status: Sell (G-fund)
Currently expecting a buy signal in early-mid March time frame. After some research, the S-fund is the better play when the system is on a buy.

Testing

I just set up this website to discuss our TSP systems. Test. Test. Test.