Friday, October 19, 2012

JT Comp to Cash

The JTS will remain short.  The strict requirements to flip it long in an unhealthy environment were not even close to being met today.  However, the CCI is going long here due to the magnitude of the drop.  It is expecting a dead cat bounce early next week. 

The disagreement between the 2 models will send me and the JT Composite back to cash.  I will happily take the profits here.  My only regret is not sticking with TZA to short.  Oh well, not going to complain.

Stepping back to assess the situation/damage....  Despite the large move in the VIX, the VIX futures still remain in strong contango.  This may set up a nice XIV trade sometime next week.  But I will be careful longing next week due to poor seasonality - next week does not look good.  Meanwhile, liquidity via the Fed is still strong.  Overall, I'm not enthusiastic about the long side but some more down days next week may change my mind.  

Here is seasonality next week via sentimentrader and tsptalk.  Monday is Day 16 on the chart.  Have a great weekend! Enjoy the big win!!! 




12 comments:

  1. I got in SPXU yesterday at 36.87 and out today at 38.69. Not too shabby I must say...

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    1. Good job - I got in yesterday at 36.85 and left today too early at 38.26. Still hedged my longs nicely though :-)

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    2. Not too shabby, indeed. Both of you.

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  2. Days like today really make your year... as I said yesterday, "Mkt is primed for a nice drop.... If not tomorrow, then Monday. I'm sticking to my shorts w/ya, J..."

    Worst day in four months!... Saaawwwweeeeetttt!!!!

    No rush to cover, either!... maybe Monday on some hugeass gap down open.

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    1. Yeah, great call JKH. I don't know how you do it, but you always seem to be on the right side of the trade. Curious what made you believe the market was primed for a nice drop???
      Thanks.

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  3. First, let me say, "I have been wrong before"... But there were a lot of things that came together there. Al & RMI close your eyes: Yes, a big part was "gut" having done this for over a decade. OK, Al & RMI, now you can open your eyes. The other things were stats for options expiration selloff effects, money flows, general mkt internals were sucking, intraday price action Thursday suggested a "key reversal" coming, seeing the NDX so weak, the daily H&S (two of them, in fact) on NDX daily (and they were working, too), CrAAPL being suspiciously weak (and knowing she's such a large part of NDX and SP500), etc... IMO, CrAAPL is THE reason for the mkt strength the past few years.. the flagship of our entire "recovery" and "earnings"... and her chart was forecasting a sea-change ever since that 6-day Island Reversal activated on 9/24 close.... so you knew things were primed to the downside when THE leader is showing major reversal patterns and they are triggering and working. Then, any idea that Romney might win (which means "uncertainty" and that's the one thing the mkt hates) also lent into my bearish bias recently. So, like I said, a lot went into that. It was the 'perfect storm', so to speak.

    As I have said before, trading systems are great, and I love stats and use them a lot, but always keep a human at the helm. Love what yer doing here, J. Really enjoying the exchange. Hope you find it beneficial, too. Kind regards.

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  4. Good work JKH. And, btw, I don't deny the value of non-mechanical analysis. My point has always been that most people are better off, over time, not following their gut. But most doesn't mean all. Your analyses have, as long as I've followed them, been exceedingly accurate. I do wonder, however, if you'd be willing to share your record over time. If not, I understand and am grateful for the excellent insights you share with us.

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  5. Al... I was just funnin' w/you with the "close yer eyes" thing. Yer right, though, about most wrt their gut. But it comes w/time to every trader... I see it happening to J, for sure, and if you stick w/it, you, too, will start flavoring your commitment to each trade. It may not generate bigger returns, but it will smooth-out the ride, and, frankly, that's more important.

    I have my stats/records going quite far back, but any posting of records is too easily branded as bragging or dismissed as not credible. I think my integrity in posting and consistency says enough and I will try to keep sharing, if nothing else, than a way to say "thank you" to J for doing a good job here w/his system, which, I expect will some day go "pay" and no longer be free. ... At least that is the natural evolution I've seen over the past decade.

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    1. I understand. And again, thanks for your contributions.

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    2. Thanks for spilling your guts here, JKH. Great posts, very insightful!

      As for my end of the bargain, there should be no worries mate. I don't ever see this being a pay site. Lord willing this won't happen, but the only way I would even consider it would be if I ever lost my job. That said, don't be surprised when in a few years, a "Donate" button pops up on the site for a job well done. :-) Hopefully we're all rich by then. HA!

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  6. J, if and when you have a chance, I have a request. Could you post the equity curves for the Composite, JT and CCI systems?

    The reason I ask is that I'm curious how the three systems react to various markets. For example, does the CCI work best in a mean reversion market, is the JT system more efficient at making calls in a trending market, etc. It seems to me that if we could look at the three equity curves, and compare them with the equity curve of SPY or TNA during the same period, we might learn a lot.

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    1. I will do my best to post them Sunday.

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