Wednesday, March 28, 2012

Buy signal.

3:45pm Update: Wow, I nailed the low of the day with that last post.... *sigh* This is not how I wanted the day to end. Regardless, it's still a solid buy signal right now. As long as SPY closes below 140.82, the system covers shorts and goes long w/ a 100% TNA position. If we manage to blast north of 140.82, we'll continue holding shorts. Regards.

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2:15pmET Update: Still on track for a buy signal. The more we sink today, the better!
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As long as we don't see yet another intraday "buy the dip" session unfold, we are headed for a 100% TNA buy signal. The short position would be closed and a long position will be opened, both on the close EOD.

Interestingly since yesterday saw new nominal highs in the indices, the stop loss on the long position would be a relatively safe and tight TNA 59.06 (the swing low from 3/23). As a refresher, I use the 10-day rolling inside/outside reversal indicator to determine market health and find possible tops. Since a new high was set on 3/27, I sample the previous 10 candles to find the low end of the range. (As mentioned, that occurred Friday 3/23 for TNA. Officially I use SPY for market health, thus the SPY value to watch is 138.09 from 3/13.) If that range breaks to the downside, it would be our first red flag that a significant move down could be in the cards. Then again it could also just be a headfake, which is exactly why we only use a half stop - to reduce risk. More later.... thanks!

13 comments:

  1. Thanks, at another good call, going short when everyone was going long @ SPX 1418

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  2. The odds of this happening are very low, but out of curiousity, what is the signal if SPY closes at 14.82?

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  3. 140.82 or higher was a hold. I didn't get precise with the wording as odds were too low it would even get that high. It was worded accurately in the tweet though. Thanks.

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  4. by tomo, the market health status will be based on 10days low of SPY at 138.55

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    1. Well, only if SPY can break above the high from 3/27 of 141.83, which is asking a lot.

      Until 141.83 is taken out, the "inside" range will remain static. And the health indicator will remain 138.09.

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    2. Your comment motivated me to dedicate a new post on the topic. Thanks.

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    3. wow, ok, so maybe the market recovers this afternoon?

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    4. Not sure... could be a multi-day drawdown.

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  5. one of my premium show today is a down and tomorow is up day, monday will also be down.

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    1. yup, and with those signals, I know which one... ;)

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    2. hahaha i might be start tracking like you, lol one of the tracker bound to be right hahah.

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