Friday, December 31, 2010

Hold signal.

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

Wednesday, December 29, 2010

Short Signal

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

Saturday, December 25, 2010

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!

Wednesday, December 22, 2010

12/22 - No change...

Today's signal: Hold

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

Tuesday, December 21, 2010

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. 

Monday, December 20, 2010

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....

Friday, December 17, 2010

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!

Thursday, December 16, 2010

Getting a short signal...

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

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

Wednesday, December 15, 2010

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.


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.

Monday, December 13, 2010

Holding Shorts

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

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. :)

Saturday, December 11, 2010

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.

Thursday, December 9, 2010

Short signal

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

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.  :)

Monday, December 6, 2010


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

Friday, December 3, 2010

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.

Thursday, December 2, 2010

Shorting time...

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

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.

Wednesday, December 1, 2010

Sell signal...

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

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!