Friday, October 29, 2010

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!

Thursday, October 28, 2010

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.

Wednesday, October 27, 2010

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...

Tuesday, October 26, 2010

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!

Monday, October 25, 2010

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.

Saturday, October 23, 2010

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!

Friday, October 22, 2010

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.

Thursday, October 21, 2010

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.

Wednesday, October 20, 2010

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)

Tuesday, October 19, 2010

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.  :)

Monday, October 18, 2010

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.

Thursday, October 14, 2010

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

Tuesday, October 12, 2010

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.

Monday, October 11, 2010

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. 

Sunday, October 10, 2010

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%