As you know last week on Thursday SPY closed for 20 consecutive
days above the 8 day SMA along with the %R indicator over 91%, that
is what I call an exhaustion short where price has been up too far
too long and is looking for a reversion to mean pullback. We
are now getting that pullback - The trade setup over the last 20
years on SPY is 92% winning trades.
However as you know the SPY Pro system current settings did not
take this trade as it just was missed the settings that I have in
my system by a hair's breath because I have the %R set to 95%
instead of 91%. However as I stated last week, I did not want
to change the system settings in the middle of the day, but I
thought I should at least report the stats because with 92% winning
trades it's very high probability.
If this trade works out I adjust the settings in my SPY Pro
system to take this trade. Again it's only looking for a
reversion to mean pullback and would simply close out the trade on
a close back below the 8 day SMA. Currently the 8 SMA on SPY is
$187.02, therefore if SPY closes below this today the system would
cover the short.
Hi Matt. What is the % R indicator in stockcharts? When I look
at %WMR in stockcharts for SPY, I get some values coming through
but not c90% which is what you mention above. I just want to ensure
i am looking at the right indicator!!
Stockchart's doesn't seem to have it, they have Williams %R,
which is different, or the scale is different. You could
probably use a short term RSI instead like 2 or 3 length RSI in
place of the TS %R indicator as they would move in a similar
way
clearly the Exhaustion short on SPY would have been nice to keep
overnight until this morning, but again that trade was simply about
catching a statistical anomaly where price needed to revert back to
the mean, which it did.
this exhaustion short may still work out - again it's simply
looking for a close back below the 8 day MA, that's not much lower,
the 8 MA on SPY is 187.34, so closing below that price the short
would exit
Exhaustion Short follow up on SPY
Posted by matt on 10th of Mar 2014 at 10:52 am
As you know last week on Thursday SPY closed for 20 consecutive days above the 8 day SMA along with the %R indicator over 91%, that is what I call an exhaustion short where price has been up too far too long and is looking for a reversion to mean pullback. We are now getting that pullback - The trade setup over the last 20 years on SPY is 92% winning trades.
However as you know the SPY Pro system current settings did not take this trade as it just was missed the settings that I have in my system by a hair's breath because I have the %R set to 95% instead of 91%. However as I stated last week, I did not want to change the system settings in the middle of the day, but I thought I should at least report the stats because with 92% winning trades it's very high probability.
If this trade works out I adjust the settings in my SPY Pro system to take this trade. Again it's only looking for a reversion to mean pullback and would simply close out the trade on a close back below the 8 day SMA. Currently the 8 SMA on SPY is $187.02, therefore if SPY closes below this today the system would cover the short.
Here's a quick video I made discussing this exhaustion trade
Hi Matt. What is the
Posted by vimal on 13th of Mar 2014 at 08:49 am
Hi Matt. What is the % R indicator in stockcharts? When I look at %WMR in stockcharts for SPY, I get some values coming through but not c90% which is what you mention above. I just want to ensure i am looking at the right indicator!!
Thanks
Title: %R Williams %R is equal
Posted by iz_bs on 13th of Mar 2014 at 10:12 am
Williams %R is equal to (Full stochastic-100)
Stockchart's doesn't seem to have
Posted by matt on 13th of Mar 2014 at 09:49 am
Stockchart's doesn't seem to have it, they have Williams %R, which is different, or the scale is different. You could probably use a short term RSI instead like 2 or 3 length RSI in place of the TS %R indicator as they would move in a similar way
clearly the Exhaustion short on
Posted by matt on 12th of Mar 2014 at 09:59 am
clearly the Exhaustion short on SPY would have been nice to keep overnight until this morning, but again that trade was simply about catching a statistical anomaly where price needed to revert back to the mean, which it did.
this exhaustion short may still
Posted by matt on 11th of Mar 2014 at 12:18 pm
this exhaustion short may still work out - again it's simply looking for a close back below the 8 day MA, that's not much lower, the 8 MA on SPY is 187.34, so closing below that price the short would exit
Oh, Matt!
Posted by brophy on 10th of Mar 2014 at 02:59 pm
What's 3 little %s between friends!