JT- the main signal update on this site (right above these comments) did NOT update before 4pm. BUT, the 'Latest Signals via Twitter' two-line bar just above and to the left DID, at exactly 3:58. I know this because I was manually refreshing the page every 15 seconds or so starting at 3:56...
Stock Traders Almanac points out that there is a recurring pattern of a November selloff after an incumbent presidential victory. Given the extensive run-up in Aug/Sept, we may be seeing little more than an extreme version of this election cycle pattern, with an excessive anticipatory run-up and an exaggerated retracement. With Oscillator readings now solidly oversold, Thanksgiving positive seasonality (and, a possible Opex reversal) ahead of us, I would be scared if I were a bear of a face-ripping squeeze somewhere in here.
But as always the luxury of a great system like the JT Composite is that one doesn't have to think... just follow signals, and exercise appropriate position sizing.
While the losing money part isn't fun, I am welcoming the increased volatility. If you can stay solvent during the crash, the trading afterwards can be very rewarding.
Thanks, J. looks like the market really want to go to extreme. NYMO is -87 today, which usually indicates a bottom (and hence a bounce) near. However, with the "fiscal cliff" is likely to lingering around (both sides are talking tough). there is a good chance that the extreme will goes even more extreme before it stops. so we may not want to front-run the market too much. I am about 1/3 in long positions. was thinking to add more around SPX1360. now we are here but I am not sure if I shall wait till 1320:-( -- typical behavior of inexperienced hands
SP500 hit the MM objective of the H&S today at 1353. That was pretty damn crisp, and the 5m index charts all ricochet'd sharply off that level. Registered true panic selling today (always nice to see). And my "no more shorts for one month" indicator finally fired at the close today, so you won't see me shorting this mkt (even if we rally) until somewhere much closer to Xmas. Expecting a reversal off this zone level, to form a large reversal pattern for the mkts over the next month or so. Put on another batch of TZA shorts. This is just part of the game -- unusual, but it happens.
General Logic: Figure out times when the upside probabilities far out weigh the downside risks. Do this on a scale that predicts moves that last ~ 1 month or more.
J, that policy is for me -- not for everyone else. Was just sharing what I do and a bit about why I do. I do this about once or twice a year. And, for the past decade+, it's worked every time (for me). I'm sure your system will catch some wiggles I will miss, but I have to follow the rules I know, and I am OK w/that.
Also, honestly, I would not think that you would ever enact such a policy. Your systems pretty much are long/short/cash .... so there is no "no shorts" rule put into play.
For me, I know when my systems that short have higher probabilities of working and when they have very high odds of getting screwed by a "rip your face off" kind of grind higher action or short squeeze. And I listen to those signals. One month is not a long time. 5/17 was the last time this triggered and, if you look at the chart, though the mkt continued to wiggle, the call was a good one. The mkts bottomed 2 weeks later, and ripped higher.... +16% for the slog SP500 .
Not sure why this was so delayed. I transmitted at :52 after the hour. My apologies.
ReplyDeleteJT- the main signal update on this site (right above these comments) did NOT update before 4pm. BUT, the 'Latest Signals via Twitter' two-line bar just above and to the left DID, at exactly 3:58. I know this because I was manually refreshing the page every 15 seconds or so starting at 3:56...
DeleteStock Traders Almanac points out that there is a recurring pattern of a November selloff after an incumbent presidential victory. Given the extensive run-up in Aug/Sept, we may be seeing little more than an extreme version of this election cycle pattern, with an excessive anticipatory run-up and an exaggerated retracement. With Oscillator readings now solidly oversold, Thanksgiving positive seasonality (and, a possible Opex reversal) ahead of us, I would be scared if I were a bear of a face-ripping squeeze somewhere in here.
But as always the luxury of a great system like the JT Composite is that one doesn't have to think... just follow signals, and exercise appropriate position sizing.
Thx as always, JT!
All is well. Thank you!
ReplyDeleteNot to worry. Let's just hope that a massive rebound was similarly delayed. Fat chance.
ReplyDeleteWhile the losing money part isn't fun, I am welcoming the increased volatility. If you can stay solvent during the crash, the trading afterwards can be very rewarding.
ReplyDeleteThis is the kind of market that reminds me of Warren Buffett's quote, "It's not until the tide goes out that you find out who's been swimming naked".
ReplyDeleteThanks, J.
ReplyDeletelooks like the market really want to go to extreme. NYMO is -87 today, which usually indicates a bottom (and hence a bounce) near. However, with the "fiscal cliff" is likely to lingering around (both sides are talking tough). there is a good chance that the extreme will goes even more extreme before it stops. so we may not want to front-run the market too much. I am about 1/3 in long positions. was thinking to add more around SPX1360. now we are here but I am not sure if I shall wait till 1320:-( -- typical behavior of inexperienced hands
SP500 hit the MM objective of the H&S today at 1353. That was pretty damn crisp, and the 5m index charts all ricochet'd sharply off that level. Registered true panic selling today (always nice to see). And my "no more shorts for one month" indicator finally fired at the close today, so you won't see me shorting this mkt (even if we rally) until somewhere much closer to Xmas. Expecting a reversal off this zone level, to form a large reversal pattern for the mkts over the next month or so. Put on another batch of TZA shorts. This is just part of the game -- unusual, but it happens.
ReplyDeleteThanks for the analysis, JKH.
ReplyDeleteWithout giving away state secrets, could you tell us what the general logic behind your "no more shorts for one month" indicator is?
General Logic: Figure out times when the upside probabilities far out weigh the downside risks. Do this on a scale that predicts moves that last ~ 1 month or more.
DeleteThanks guys. My feelings are that it's a bit too early to enact a no shorting policy.
DeleteI don't think we will, but if we continue to tank (say to 1320) and then immediately bounce hard, that bounce will be shortable...
J, that policy is for me -- not for everyone else. Was just sharing what I do and a bit about why I do. I do this about once or twice a year. And, for the past decade+, it's worked every time (for me). I'm sure your system will catch some wiggles I will miss, but I have to follow the rules I know, and I am OK w/that.
DeleteAlso, honestly, I would not think that you would ever enact such a policy. Your systems pretty much are long/short/cash .... so there is no "no shorts" rule put into play.
DeleteFor me, I know when my systems that short have higher probabilities of working and when they have very high odds of getting screwed by a "rip your face off" kind of grind higher action or short squeeze. And I listen to those signals. One month is not a long time. 5/17 was the last time this triggered and, if you look at the chart, though the mkt continued to wiggle, the call was a good one. The mkts bottomed 2 weeks later, and ripped higher.... +16% for the slog SP500 .
Still holding 1/3 TQQQ long position position
ReplyDelete