Monday, November 19, 2012

Sell.

All systems are selling XIV and will head to the sidelines/cash. Thanks!

UPDATE: To clear up any confusion since I'm not trading TNA when there is contango in the vix futures, I've added XIV's price to the system tracker pane on the left. I'm not fond of the cluttered look, but hopefully we'll all adjust. I've received questions why I'm tracking TNA when I'm not even trading it. Problem solved.

17 comments:

  1. Took a smidge more ES, YM and TNA off here in AH... great fills: 1385 ES 12760 YM. Covered a smidge TZA short, too. The ole "SHORT WITH IMPUNITY" is working superbly on TZA.

    Glad yer w/me, J, on the "no shorts" here. The "no more shorts" call from 3 days ago is looking pretty good now. Today is exactly the kind of action that system is supposed to avoid -- today was what we call a "Rip yer face off" rally, crushing the bears. And, from what I can tell, this thing is not done yet, either. Expecting a consolidation here, then higher, yet. FOr those very patient bears, though, statistically, today's action will fade (I guarantee it), but it will likely be days before it is faded.... probably more like 2 weeks out, or more.

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  2. JKH,

    As always, thanks for your perspective.

    When you say that today's rally will eventually be faded, are you implying that this is just a bear market rally and that, once it's spent, the bear will resume? Or do you mean that you see continued upside after the fade?

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    1. I don't know his exact thinking, but for what it's worth I think we rally to 1405 SPX then retest 1350 again, probably in early Dec. That's how I'll be playing it... I'll deviate if I have to.

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  3. J, you and I think pretty much alike.

    Al, yes, to me, this is a CT rally. And I doubt we fade today's move soon. But, when we do, I'll go a step further and say that it'll likely not stop there.

    The 1350 re-test will depend upon how long until the masses (that exited the prior few days ago down low) panic and get back in long into the next local high. I would not be surprised if that takes us into early 2013 before that happens. There's a good chance that we've just finished the best trading of 2012 and things now start to slow down from here until EOY. Usually, December is a slow month, esp after mid-month, where the ranges contract. And often the action is more of a "grind" action, not unlike what we saw during the first 2/3rds of 2012. Of course, i could be wrong.

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    1. Thanks, JKH. You are probably right - I'm a bit quick. I found this chart tonight from Daneric. Looks pretty reasonable so I'll repost here. His timing is probably a bit quick too. A crash after his route to 1425+ labeled [ii] probably wouldn't happen until early 2013. What I find intriguing is his shallower retrace after tagging 1405.

      http://4.bp.blogspot.com/-SYHjzGSO79Q/UKrepiz9S7I/AAAAAAAAQMw/bKuCNup8nDI/s1600/spy.png

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    2. BTW, I don't subscribe elliot wave. I'm more interested in resistance and support levels, as I've found those to work almost like clockwork. Rarely is an important level broken on the first try.

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    3. You know the rule:
      1st time "Fade"... 2nd time "go with".

      J, I'm glad you don't subscribe to EW. Of all the sh*t that is out there that I have looked into, EW is among the worst, most useless to traders wanting to make money. EW's great for two things: (1) those trying to sell systems/services or (2) newbies that need to blow-out a few times before they "get it". EW is superb for those two things -- nothing more.


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    4. Quite true, JKH. Elliot Wave theory is dangerous because it can lead one to a conviction that the Market HAS to behave in a certain way, and HAS to trace out a certain pattern. I've personally witnessed the harm to portfolios that can cause.

      >> "..I see that QE guy is also saying 20 more days of net upside action. Glad he joined the boat...."

      His name is Rob Hanna, and he is not on a boat. He is found not only at his Quantifiable Edges blog, as his longtime fans are well aware, but also now at an adjunct site which is a perfect complement to the original: Overnite Edges. Each site offers both free and subscription based material.

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    5. Yes, Daniel. I agree about RH. I have nothing but respect for the man.

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  4. I see that QE guy is also saying "20 more days of net upside" action. Glad he joined the boat, though he's a good day late and a dollar short by now. http://tinyurl.com/bq2gso2

    He's got some stat saying a perfect 19-0 record (stats since 1995) for the mkts being higher over the next 20 days. Seems like one of those "capitulation calling" systems, as it fires once every year or so, which is just about right. "... Drawdowns still happen,... but a washout is in progress." Yup, that about sums it up.

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    1. I find it most interesting that every instance had a drawdown, and since Monday was a gap and go with 0 drawdown thus far, according to his stats there is a 19 for 19 chance Monday's gap gets filled in the next 20 days.... food for thought.

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    2. That's a very good point, J.

      Devil's Advocate:
      Any stats based system that has been right 19 out of 19 times, is far over-due for a "miss".

      Signed:
      The Devil ;)

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    3. Devil,

      I somehow knew you were going to say that. :)

      -J

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  5. As I mentioned yesterday i see more upside for XIV I am very pleased today,s action

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  6. Alex,
    Do you see upside for XIV because you think that market in general is going up, or because of VIX related issues, such as contango, term structure, etc.?

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    1. Hi Al
      My system detected a gap for XIV yesterday and my short term indicators jumped on strong buy signal

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  7. J - I like the current table format XIV/TNA. A bit cluttered but more info. Thanks

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