Wednesday, August 17, 2011

Healthy...(really?!?)

4:45pm: My way of determining market health, which of course isn't fool proof, is flagging the market as being healthy again. Despite the flip to healthy mode, a buy signal was not even close today so we got another hold signal. But with the new stop loss rules in place, half of the short position was closed leaving the system with just a 25% short position and the rest on the sidelines. The portion that was stopped out was profitable, which in my testing was quite rare.

Going forward, buy signals will be more frequent while short signals will be less so. The market will remain healthy unless support @ SPX ~1102 is breached. I am fairly confident, as are many others that 1102 will be tested at some point. That's 90 pts lower than today's close. Meanwhile, max upside potential I would guess is the 200 day MA which just happens to be 90 pts higher. Should be an interesting roller coaster the next few months. Hopefully my system can navigate it with a bit more success.

3:48pm: No signal changes. However, if SPY closes at 119.60 or higher the system flips, by my definition, to healthy mode (which I will take with a grain of salt after the waterfall decline). If that flip occurs, half of the short position will be stopped out.

So in summary:

SPY closes below 119.60, system remains 50% short.

SPY closes at 119.60 or higher, system moves to only 25% short. 75% cash.

9 comments:

  1. BTW, your post didn't make it onto the site until 3:56pm. I was using CTRL-F5 every minute until your signal came up... don't know whats up, but when you are late in the day; you are LATE in the day.
    Wish I could use twitter :(

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  2. This comment has been removed by the author.

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  3. Sorry about that, I will try to post sooner. I have no idea why it's so delayed.

    As for twitter, why can't you use it? Even if you have a regular (dumb) cell phone, twitter can still send u a text message.

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  4. Another VXX up and VIX down day. Usually not a good sign for the market. However, probably just chalk it up to good old backwardation.

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  5. I dunno. I'm not feeling the love from ES right now.

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  6. J-Trader, no cells phones allowed where I work. I will try to find a way besides sitting outside the building for 15 minutes and runnning inside... :D

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  7. Bear fake-out yesterday afternoon as the futures are down (-180 right now) this morning... :(

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  8. Yeah that barely green candle yesterday probably fooled a bunch of people... including my system. I really doubt this is a healthy market.

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  9. I SO WISH I FOLLOWED YOU PRIMARILY AND MADE MY TRADE ON MONDAY.

    I am still in pain, this SUCKS...

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