Monday, November 21, 2011

Unhealthy Mode & 1/2 Stop

3:52pm: On the close, we'll sell half the long position, keep the other half. This places the system in approx. 75% cash.

11:42am: The system is now in unhealthy mode starting today. Additionally, since we took out SPY 119.12, the system will move to 25% TNA and 75% cash on the close. Keep in mind, the last time the system was stopped out of a long position it was a great time to buy. This is precisely why we'll keep a partial long position going until the next signal. Then again, this could be early August all over again...

Lower prices are expected and my system will sell/short any strength over the coming days. I see today as a significant shakeout before higher prices later this week surrounding the holiday. Thus, I'm expecting to hold onto this long position then go short heading into next week.

We'll see how it goes... Thanks for reading!

8:06am: Judging by the futures this morning (/es -20), I have to mention the possibility that the stop loss could get taken out. The level to watch is SPY 119.12. If we dip below that value at anytime today or this week, the system will flip to unhealthy mode. This forces the system to exit half of the long position (ie. move to 25% TNA, 75% cash) on the closing price on day in which the stop loss level is violated. Today, perhaps?
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8 comments:

  1. RealMoneyIssuesNovember 21, 2011 at 9:33 AM

    This going to suck... but I can't see us going back up for awhile so maybe this is best...

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  2. RealMoneyIssuesNovember 21, 2011 at 9:43 AM

    Also, does this mean your system is pointing to a lower market?

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  3. jimNovember 21, 2011 at 10:27 AM

    Thanks for the early read on the position.
    Tough trading market.

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  4. JamesNovember 21, 2011 at 10:52 AM

    Ok, I guess that's it - 119.05. Selling half my longs on the close today. :-/

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  5. JamesNovember 21, 2011 at 10:54 AM

    RMI, yes with the flip to unhealthy today, lower prices are forecast. But a bounce is possible first which is why i'm not selling all my longs.

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  6. RealMoneyIssuesNovember 21, 2011 at 11:02 AM

    I was hoping for a bounce off of 119, but, well, that didn't happen... yet

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  7. jimNovember 21, 2011 at 7:10 PM

    J-Trader
    What happens with the 1/4 long position if the system goes 100% short?
    Thanks

    ReplyDelete
  8. JamesNovember 22, 2011 at 7:11 AM

    Jim,

    If we get a short signal this week, I will sell the 1/4 long position and open a 50% short position, both on the same day (near the close). Easy as that.

    Thanks!

    ReplyDelete

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