Friday, March 30, 2012

Hold confirmed.

Holding longs. Have a good weekend.

Another month is in the books..... March finished up 11.11%. System YTD gains are +26.45%.

March Trades........

Feb 29Buy58.47
Mar 1

Mar 2
Mar 5

Mar 6
Mar 7

Mar 8
Mar 9
Mar 12

Mar 13

Mar 14
Mar 15Short62.72
Mar 16

Mar 19

Mar 20

Mar 21

Mar 22
Mar 23

Mar 26
Mar 27

Mar 28
Mar 29 Hold

Mar 30

Hold confirmed.

Holding longs. Have a good weekend.

Thursday, March 29, 2012

Hold signal confirmed.

System remains 100% long TNA.

CCI Buy signal.

Similar set-up to March 6th, although not as powerful since the CCI (white line) has not been above zero for 2 consecutive months.

Two ways to get a sell signal. 1) If red line drops below zero, all it takes is for CCI(white) to move above Zero line. 2) If red line stays above zero, then the sell signal occurs when CCI(white) moves above the green line.

Winning rate with this trade is over 90% holding the position until 1 of the above sell signals is met.

Wednesday, March 28, 2012

Current status of Market Health.

We have been "healthy" for several months. Here is a refresher using the current SPY candle structure on how I calculate when and how the system could flip back to unhealthy mode...

Click to enlarge. Any questions, ask away!!

Buy signal.

3:45pm Update: Wow, I nailed the low of the day with that last post.... *sigh* This is not how I wanted the day to end. Regardless, it's still a solid buy signal right now. As long as SPY closes below 140.82, the system covers shorts and goes long w/ a 100% TNA position. If we manage to blast north of 140.82, we'll continue holding shorts. Regards.

2:15pmET Update: Still on track for a buy signal. The more we sink today, the better!
As long as we don't see yet another intraday "buy the dip" session unfold, we are headed for a 100% TNA buy signal. The short position would be closed and a long position will be opened, both on the close EOD.

Interestingly since yesterday saw new nominal highs in the indices, the stop loss on the long position would be a relatively safe and tight TNA 59.06 (the swing low from 3/23). As a refresher, I use the 10-day rolling inside/outside reversal indicator to determine market health and find possible tops. Since a new high was set on 3/27, I sample the previous 10 candles to find the low end of the range. (As mentioned, that occurred Friday 3/23 for TNA. Officially I use SPY for market health, thus the SPY value to watch is 138.09 from 3/13.) If that range breaks to the downside, it would be our first red flag that a significant move down could be in the cards. Then again it could also just be a headfake, which is exactly why we only use a half stop - to reduce risk. More later.... thanks!

Tuesday, March 27, 2012

Hold confirmed.

3:55pm: Hold confirmed.


If today turns out to be an uneventful range day typically seen after large up days, then we should expect a hold signal. I am hoping for a pullback to occur over the next few days, though probably not today, which should give us at least a small gain on this short trade before the next buy and/or cover signal.

I've updated the stats section. After the ~10% gain with the latest trade, we are squarely in the black again for the month and have topped +20% for the first time in 2012.

Here's to a slow and steady climb upwards to my +100% goal for the year. We are well on our way.

Ok... time to be productive. No need to watch the market, especially on a day like today. See ya back here at 345p ET.

Monday, March 26, 2012

Strong short signal confirmed.

Short signal confirmed. Closing longs. Going short.


Loving the profits today! We'll have to flip sides quickly though b/c it's been a while since I've seen a short signal like this... Confidence is high.

Friday, March 23, 2012

Hold longs...

Hold signal was confirmed. Have a good weekend.


350p: sell if spy 139.80 or higher. No short position. If below, hold longs.


It will take a bit of work today by the bulls, but we could see a sell signal with a strong enough finish. There likely be no short signal unless SPX can manage another ~8 pts up today to about 1405.

It's probably looking like a hold signal however.... I will update later. Peace!

Thursday, March 22, 2012

Buy confirmed.

3:52pm Update: Change of plans! Buy signal only if SPY closes 139.30 or lower.

If SPY closes below 139.61 we will get a buy signal. The system will cover shorts on the close and switch to 100% long TNA.

The SPY value could change, but only if today's range is broken... i.e. SPY breaks down to a lower low. I will update later.

FYI, there is no chance of a strong buy signal today. Also, my CCI System is not giving a buy signal unless the daily SPY CCI(14) drops below 0. Despite these 2 things, the system will move all-in. I, on the other hand may deviate from my system and save some cash in reserve for some more possible weakness on Friday and/or Monday.

Wednesday, March 21, 2012

Hold confirmed.

Another hold signal today... We'll remain short for at least another 24 hours. Enjoying the great outdoors here!

Tuesday, March 20, 2012

Hold confirmed.

The fact that we aren't getting a buy signal on a red day & healthy mode usually means more downside in the short term.

Take care!

Monday, March 19, 2012

Hold confirmed.

Hold signal today. Let's give this short signal a few days to work itself out... I'm off to enjoy the great outdoors. (80°F in Ohio in March!)

Friday, March 16, 2012

Hold confirmed.

Holding shorts... Have a good weekend.

Thursday, March 15, 2012

Short confirmed.

Nice to see SPY close above 140.60 and not have my late day blooper affect anything.

Short signal was confirmed. Tough market...

I mentioned in the comments below that I think today was a short term top. Let's see how it goes...

100% short - and ready for the pullback.


Misread on my part..
140.60 or higher is still a short signal, but now 140.30 to 140.59 is a sell signal. Below 140.30 is a hold. Apologies... been a long day. :-)

SPY level to watch is 140.60. If below that value, then we get a hold signal on the longs. If 140.60 or higher, sell longs and time to short TNA again...


Wednesday, March 14, 2012

Buy if...

Two scenarios will produce a buy signal today.

1) If SPY closes between 139.66 to 140.25.

2) If SPY closes at 139.02 or lower.

Otherwise, it's another hold signal and the system remains short. If we get the buy signal, obviously the short position will be closed (for a not so trivial loss, unfortunately).

That's it for today...

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.

Monday, March 12, 2012

Hold signal.

Nothing new today. Hold signal confirmed.

Friday, March 9, 2012

Short #2

Appears my system was at least a day early going short. I'm getting a 2nd strong short signal today. Additionally the CCI technique below is also suggesting a short position. This all adds up to fairly high confidence that next week will provide a pullback to put this trade back in the black. Have a good weekend all.

CCI Technique: Shorting in a "Long Only" Environment

While I'm waiting for this short trade to pan out, I wanted to point out a potent shorting opportunity today that my CCI rules are dishing up. There are a couple things going on in the chart below to focus in on. In my early testing, one rule I developed was that whenever the 21MA (green line) of the CCI is above zero, the system will only go long. After looking at the data for a few days, something else caught my eye. The 2nd consecutive sell signal while in Long Mode & in Caution Mode (red line below 0) almost always resulted in a substantial sell-off in stocks. Only problem is that instances were low. To increase instances, I also included days when the red line exited Caution mode and popped up above zero. Still, I can only come up with 8 instances using SPY in the last few years. So this is just FYI and nothing to get too excited about yet....

Of those 8 trades, 7 of them were profitable within 1-9 days. Average holding time was just 4 days. Using TZA as the trading vehicle resulted in an average return of 13.96%. The 1 trade that took 9 days finally returned 5% but had a decent drawdown of about -8%. The other 6 winning trades suffered from very little or no drawdown. And there was 1 trade that didn't return a profit at all, as the market just continued to go straight up. (Hey, nothing is perfect!)

Today will be the 9th occurrence if we finish the day in an orderly fashion. Again, instances are very low but it appears a pullback here is a very good possibility.

Thursday, March 8, 2012

Short confirmed.

4:05pm... The short was confirmed. Let's go bears!


Here are the numbers:

If SPY closes @ 136.41 or higher, the system sells the long position AND opens a 100% short position in TNA (buying TZA is always an option).

If SPY closes 135.97 to 136.40: Sell longs & head to the sidelines.

Below 135.97, hold longs.


Wednesday, March 7, 2012

Hold signal.

The system is expecting more upside in the short term and is not ready to bail out of this long trade yet. As I mentioned in the comments section, a similar size up-move tomorrow will likely produce a short signal. We'll see how it goes. Have a good one.

Tuesday, March 6, 2012

Buy #3.

It's a rare third buy signal today, although obviously it doesn't mean all that much since the system is all-in already. Should a follower of the system find themselves not 100% invested to the long side, today might be a good day to align with the system. (Keep in mind the disclaimer that I am not licensed to give any financial advice, whatsoever.)

The stop loss was not hit, so the model remains in healthy mode. Obviously this could change tomorrow, or who knows - even in the next 10 mins...

My CCI rules are producing a buy signal today. 90% chance of a profitable trade if you hold until SPY's CCI(14) indicator closes above 0.

Take care and hang in there... Better things to come.

Monday, March 5, 2012

Hold confirmed.

The long position will carry on for at least another day. Have a good one.

Friday, March 2, 2012

100% long TNA

530p: The system is now all in long. That was the last of the partial positions. Fitting that the last one helped improve our average cost more than any in recent memory. More later if I have time....


3:47pm: Nothing has changed from the earlier post below. 137.37 or lower is a buy signal and puts the system all in long TNA. Have a great weekend, see ya Monday.

The system is once again attempting to buy today's weakness. So long as the dip buyers don't step in yet again, we'll get a strong buy signal should SPY manage a close of 137.37 or lower. If the selling intensifies through the afternoon, we could lose the buy signal but either way I'll be back near the EOD to report the signal.

Thursday, March 1, 2012

Hold confirmed.

Hold longs.
If we happen to close at 137.94 or higher (spy), we will have a strong short signal - our first 100% position. If we can't reach that lofty number, continue to hold the long postion.