Friday, April 20, 2012

Healthy & half-stop...

3:49pm: The system exits half the short position on the close if SPY closes 137.73 or higher. (Half stop loss rules are in effect associated with system flipping back to healthy status).  Otherwise, it remains 100% short.  
While I don't like it or agree with it, the system is flipping the status of the market back to "healthy" again.  For the purposes of my trading it doesn't matter what I agree with or believe, so I will be closing half of my short position just prior to the close today.  Of course, this could change if SPY takes a dive this afternoon and closes down on the day.  This scenario is very unlikely given the intraday pattern which suggests continued strength.

I will be content carrying the 50% short position into next week, as I believe another leg down to complete the bear flag target to around 1330 is just around the corner.  On the other hand, there is always a chance we go back up next week to test the highs.  In that case the stop loss will offer some protection here.

Have a good weekend.  I will report the official signal later today...


  1. Thanks, J.

    There is a bearish divergence via the MACD on the 5 minute SPY chart, so we should see some selling soon. However, I doubt that it will bring the SPY into the green for the day.

  2. So, do we have to close below the open or below yesterday's close to cancel the half stop?

  3. Well, it's trying to sink, but I agree Alex sadly it probably won't make it.

    RMI, it has to close below yesterday's close to keep us 100% short and keep the system in unhealthy mode.

  4. J,

    You were going to look into a strategy someone suggested where you only invest 100% on strong signals and less on weak signals. Did you a chance to think about that this weekend?


    1. Yeh, I think this potentially could be the best strategy.
      100 on strong signals
      75 on normal and
      the last 25 on a second signal.
      Would love to see backtest results!

  5. I know it is early, but is there any inkling of todays signal?

  6. Indeed, I gave some thought and put a little work into the stats on a 100/75/25 strategy. It looks promising. I'll develop a thorough follow-up post sometime this week. Be on the lookout...

    RMI, buy signal.

    Just wanted to mention also that I just did something I've not done in over 2 years....I purchased a non-ETF stock. :-O

    Long AAPL 558.30

    I had some money sitting in the account due to the silly half stop on Friday. Sell target is 595.

  7. Out AAPL 603. Gambled on earnings and won. CCI "system" was on a ridiculous buy signal.