Tuesday, March 13, 2012

Hold confirmed.

I don't have time right now to write anything insightful but ill try to post more later. Hold signal today.

7 comments:

  1. Wish we were long, but I see this trade turning around for us real soon...

    If not, is there a stop? We are real close to a 10% right now...

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  2. Interesting market this morning. Everyone is expecting a decline, but both ES and NQ are up. However, the small caps, and TNA, are down.

    Hence, my question about the system: on a day like today, until now, that is, is it purely chance that TNA is down while SPY is up? In other words, are we having a bit of good luck and nothing more, or is the system somehow attuned to the divergence between SPY and TNA?

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  3. Small caps have been weaker relative to the broader market since roughly mid-February. I think that's the source of our current "luck". It would be interesting to know how these two are linked in this model---I wouldn't naturally apply current moves in SPY to the future of TNA.

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  4. Well, according the correlation tool link that I posted a while back, SPY and TNA are actually very closely correlated, more so than SPY and QQQ. But, the correlation isn't 100% (more like 90%), so there will be divergences.

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  5. Decreasing participation and under performance by lower cap names are not unusual at market tops. What we are observing does not have to be any more complicated than this.

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  6. J-
    To my knowledge, no system can anticipate news driven events that drive the market in a certain direction. What is important is being able to determine high probability entry/exit points to be profitable. It really doesn't get any better than that and I believe the current short position is a good one. Thanks!

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  7. Thanks all...TNA being weaker is mostly just luck.

    Anyway, now that the system exited the short position today, be prepared for the market to tank. That's my luck. :)

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