10:30am Update: Obviously the hold signal was confirmed yesterday as SPY fell well short of the critical number. TNA continues to look good this morning. Probably going to see a sell signal today.
Here is the trading set-up for today: If SPY closes 132.98 or higher, my system exits the long position and goes short again. If 132.97 or lower, hold longs. It's that simple.
Should we get the short signal, I'd have very high confidence that it would be a winning trade. Looking at the internals of my system, rarely do I see such excellent shorting opportunities. The last one this strong was 10/27/11 and before that 1/12/11. Both times TNA lost ~10% within 5 days.
Now to address some comments the past few days. Like most of you, I was bummed the last short trade didn't work out. The frustration here was obvious and I could definitely relate. I was also unsure of going long at these lofty levels. But this market just doesn't want to correct. It happens...like, a year ago.
One thing I wasn't worried about was being trapped in a short trade while the market goes up forever. Yes we were trapped for a little while, but with the way my system is designed, it's almost impossible not to get a buy or cover signal eventually. That's the beauty of my system. It just works. You can have confidence in it. You don't even have to take my word for it, just review the 2011 stats if you need a confidence boost.
Good day trading!