Good morning everyone, as you know the market reversed sharply on the hot CPI data. ES S&P futures were up 30 points pre market but then reversed 120 points on that CPI data. Currently SPX cash is down 90 points!!!

The systems caught a very timely short yesterday!  See the chart below!  Agood way to think about the systems (except for the breakout) is that they look for periods where the market is out of bounds, where the rubber band is too stretched and prone to a reversion back to the mean. Most of the time they exit on that reversion to the mean, but will hold on occasion for trending moves if other indicators align, kind of like that bear long which lasted 5 weeks from July 13th to Aug 22 and a nice trending move was caught. 

By the way the system isn't looking to cover/close out here, I'm guessing the trending momo indicator is red and so it's looking to hold. I will investigate when I have time and confirm that.  That said the minimum goal has been achieved with a sharp reversion back to the mean and thus even if the system holds today I will likely elect to cover 1/2 of it just to be safe. 

Congrats if you took the short signal yesterday. And while the sub system triggered on ES and not SPY, remember that even if futures don't fit your risk profile and are not something that you can trade, you can still follow these trades signals by simply using one of the SPX related ETF's instead (SPY, SH, SSO, SDS, SPXU, UPRO).  The reason I share systems trades on both SPY and ES is to give us the most number of trade opportunities. The 21 systems will catch trades on ES that are not triggered on SPY - thus we get more trade opportunities this way.

Matt