FYI an exit signal was generated on the SPY system at the close.
Remember that per the system rules the system will close
out the current long trade on Monday's open since all trades are
exited on the next day open, which would be Monday's open.
The trending indicator that the system follows for the initial
trade is still negative, thus the system won't hold this trade.
The moves have been so extreme lately that the trending
indicator didn't have time to turn around and turn positive, which
would have caused this trade to hold for a longer period of
time.
Regarding this exit, first off the system is the system, so this
is what will be posted and followed in the trade history.
Otherwise I'm divided, honestly I was rooting for the market
to chop around for another day or so, which would have been enough
time for the trending indicator to turn positive and hold the
trade, but that didn't happen. However honestly it's a flip
of the coin. The lows might be in and the market might
retrace 50 - 62% of the entire pullback. Or this could still
be a 4th wave consolidation which means eventually the market will
make another low again in wave 5, however I view the first scenario
with some kind of low being in place as the more probable out of
the two.
Anyway the system is the system the long will be closed out on
Monday's open, let's hope for a gap up on Monday. Have a nice
weekend
Matt is referring to Fibonacci retracement levels (pl google if
you are not familiar), specifically the 50% and 61.8% retracement
levels. Here is a SPY chart for you to see the numbers.
Thank you Vida and sorry super I didn't see your request.
This weekend I was looking at a few scenarios and I have been using
7/7/11 at the high and the same low as Vida. In that case the
38.2% correlates with the the gap on the SPY around 120, the 50%
then comes in at 123 and then the 61.8% at 126. Those numbers
are not exact but surprisingly they are within a few pennies of the
round numbers. So depending on what day you use as the high
and low it can vary slightly. I saw that we had a gap to fill
on the upside of the SPY around 120 so I found it interesting that
using 7/7 as the high also then had a correlated fib
number.
Update - I put my fibs next to Vida's so now you have a chart
with both to use.
Posted by jlevinthal on 12th of Aug 2011 at 10:21 pm
Is it true that under the new SPY System rules the system would
have rebought on August 8 following the 6 1/2% stop loss sale. I
thought I saw that in one of the postings. Thanks
Posted by marketguy on 13th of Aug 2011 at 07:25 am
folks this type of question has been answered numerous
times....it's very simple:
"if" the SPY is under its long term moving avg (200 MA) the
system will NOT, I repeat NOT, initiate any new longs/buys.....it
will only initiate a short/sell on an oversold bounce while it is
UNDER the long term moving avg....
the only way it was go "long" is if it is
OVERthe 200
MA....
I don't think that is correct. My understanding is that
the system will occasionally take long trades when the overall
trend is down, with SPY under the 200 day MA.
Posted by burkmere on 13th of Aug 2011 at 07:56 pm
yes, you are correct ray alexander...That is what Matt had said
in the past... MG is wrong. I think it is rare that the counter
trend trades occur, but apparently they do.
SPY Current Trade Exit signal
Posted by matt on 12th of Aug 2011 at 04:24 pm
FYI an exit signal was generated on the SPY system at the close. Remember that per the system rules the system will close out the current long trade on Monday's open since all trades are exited on the next day open, which would be Monday's open.
The trending indicator that the system follows for the initial trade is still negative, thus the system won't hold this trade. The moves have been so extreme lately that the trending indicator didn't have time to turn around and turn positive, which would have caused this trade to hold for a longer period of time.
Regarding this exit, first off the system is the system, so this is what will be posted and followed in the trade history. Otherwise I'm divided, honestly I was rooting for the market to chop around for another day or so, which would have been enough time for the trending indicator to turn positive and hold the trade, but that didn't happen. However honestly it's a flip of the coin. The lows might be in and the market might retrace 50 - 62% of the entire pullback. Or this could still be a 4th wave consolidation which means eventually the market will make another low again in wave 5, however I view the first scenario with some kind of low being in place as the more probable out of the two.
Anyway the system is the system the long will be closed out on Monday's open, let's hope for a gap up on Monday. Have a nice weekend
Spy system
Posted by superdupa on 15th of Aug 2011 at 11:29 am
The lows might be in and the market might retrace 50 - 62% of the entire pullback.
Could you translate the 50%-62% to SPY numbers, so I have a better handle on this, Thank you,
Matt is referring to Fibonacci
Posted by Vida on 15th of Aug 2011 at 12:03 pm
Matt is referring to Fibonacci retracement levels (pl google if you are not familiar), specifically the 50% and 61.8% retracement levels. Here is a SPY chart for you to see the numbers.
SPY daily
Thank you
Posted by superdupa on 15th of Aug 2011 at 12:22 pm
Thank you Vida and sorry
Posted by tom on 15th of Aug 2011 at 03:10 pm
Thank you Vida and sorry super I didn't see your request. This weekend I was looking at a few scenarios and I have been using 7/7/11 at the high and the same low as Vida. In that case the 38.2% correlates with the the gap on the SPY around 120, the 50% then comes in at 123 and then the 61.8% at 126. Those numbers are not exact but surprisingly they are within a few pennies of the round numbers. So depending on what day you use as the high and low it can vary slightly. I saw that we had a gap to fill on the upside of the SPY around 120 so I found it interesting that using 7/7 as the high also then had a correlated fib number.
Update - I put my fibs next to Vida's so now you have a chart with both to use.
SPY with Fibs
Rally could easily last another
Posted by ditch on 15th of Aug 2011 at 02:32 pm
Rally could easily last another two weeks before the major indicators reach over bought.
Yep...
Posted by burkmere on 15th of Aug 2011 at 02:41 pm
Could certainly go back up to 126...
yes, I just sold half
Posted by Michael on 15th of Aug 2011 at 03:04 pm
yes, I just sold half my SSO with SPY around 120.20, to correct some over-exposure. Letting the rest ride for now.
rebuying under the new rules
Posted by jlevinthal on 12th of Aug 2011 at 10:21 pm
Is it true that under the new SPY System rules the system would have rebought on August 8 following the 6 1/2% stop loss sale. I thought I saw that in one of the postings. Thanks
folks this type of question
Posted by marketguy on 13th of Aug 2011 at 07:25 am
folks this type of question has been answered numerous times....it's very simple:
"if" the SPY is under its long term moving avg (200 MA) the system will NOT, I repeat NOT, initiate any new longs/buys.....it will only initiate a short/sell on an oversold bounce while it is UNDER the long term moving avg....
the only way it was go "long" is if it is OVERthe 200 MA....
hope that clears it up....
I don't think that is
Posted by rayalexander123 on 13th of Aug 2011 at 07:31 pm
I don't think that is correct. My understanding is that the system will occasionally take long trades when the overall trend is down, with SPY under the 200 day MA.
Yes..
Posted by burkmere on 13th of Aug 2011 at 07:56 pm
yes, you are correct ray alexander...That is what Matt had said in the past... MG is wrong. I think it is rare that the counter trend trades occur, but apparently they do.
guess I missed that one....
Posted by marketguy on 13th of Aug 2011 at 08:24 pm
guess I missed that one....
Then what did Matt mean
Posted by ascr on 13th of Aug 2011 at 10:38 am
Then what did Matt mean by "startfox - under the new rules, the system would have bought at the close of 8/8 at 112.26."
on 8/8/11 the S&P 500 was not just under the 200 dma, but 3 std deviations under the 200 dma!!!
Posted by rikkwan on 13th of Aug 2011 at 07:27 pm
Yes I would like to know if the theoretical 8/8 trade is still in play?
Posted by rikkwan on 13th of Aug 2011 at 04:07 am
Apparently not....
Posted by burkmere on 13th of Aug 2011 at 05:12 am