Looks like this exhaustion short is working out, should close
out today as long as price closes below the 8 day SMA, which is
true at this point unless we bounce back hard in the final 30 min
and close above the 8 day MA. The 8 day SMA is $187.27, and
price is $187.01
Remember this was what I call an exhaustion short trade where
price had traded too long above the 8 day MA with overbought
indicators, this trade was simply looking for a reversion to mean
pullback i.e. the rubber band had stretched too far and was due to
snap back. Was NOT looking for a major top or big trade, just
a quickie.
The technical condition has 92% winning trades so the
probability was decent.
Posted by pimacanyon on 13th of Mar 2014 at 01:26 pm
I've written an indicator in TOS that prints a down arrow when
you get 20 closes above the 8 SMA. (Number of closes and the
period on the moving average are both user definable). I have
a second indicator to do the same thing on the downside, that is,
print an up arrow when you get 20 closes below the 8.
If I take the same settings and instead of SPY which has only
traded for 20 years and apply it to a 40 year chart of S&P 500
cash, the result is 96% winning trades, thus just an FYI I'm
probably going to adjust the settings in the SPY Pro system to take
this trade in the future,
I know you said that the short closed out. Question:
From the chart you posted the BPT Momentum turned Red.
Would that cause you to hold the short longer?
jgoot- that trade
does not use the BPT Momentum to hold the trade. As I stated,
that is simply an exhaustion trade to catch a reversion to mean
pullback, not to catch a trending trade. If I use the
momentum the results are not as good because as I showed in the
video while some trades mark tops, a lot of them don't and are
simply pullbacks in the uptrend
taking the same settings and applying them to a 40 year S&P
500 cash chart results in 96% winning trades, thus just an FYI I'm
probably going to adjust the settings of the SPY Pro system to take
the trade officially in the future
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Exhaustion Short follow up on SPY
Posted by matt on 11th of Mar 2014 at 03:31 pm
Looks like this exhaustion short is working out, should close out today as long as price closes below the 8 day SMA, which is true at this point unless we bounce back hard in the final 30 min and close above the 8 day MA. The 8 day SMA is $187.27, and price is $187.01
Remember this was what I call an exhaustion short trade where price had traded too long above the 8 day MA with overbought indicators, this trade was simply looking for a reversion to mean pullback i.e. the rubber band had stretched too far and was due to snap back. Was NOT looking for a major top or big trade, just a quickie.
The technical condition has 92% winning trades so the probability was decent.
CLICK HERE to view a short video
indicator on TOS to flag 20 closes above 8 SMA
Posted by pimacanyon on 13th of Mar 2014 at 01:26 pm
I've written an indicator in TOS that prints a down arrow when you get 20 closes above the 8 SMA. (Number of closes and the period on the moving average are both user definable). I have a second indicator to do the same thing on the downside, that is, print an up arrow when you get 20 closes below the 8.
If anyone wants a copy, PM me.
close out of short 8 day
Posted by matt on 11th of Mar 2014 at 04:05 pm
close out of short
8 day MA is $187.3, SPY closed at 187.23
If I take the same
Posted by matt on 11th of Mar 2014 at 04:55 pm
If I take the same settings and instead of SPY which has only traded for 20 years and apply it to a 40 year chart of S&P 500 cash, the result is 96% winning trades, thus just an FYI I'm probably going to adjust the settings in the SPY Pro system to take this trade in the future,
BPT Momentum turned Red
Posted by jgoot on 11th of Mar 2014 at 04:54 pm
I know you said that the short closed out. Question: From the chart you posted the BPT Momentum turned Red. Would that cause you to hold the short longer?
BPT Momentum turned Red
Posted by matt on 11th of Mar 2014 at 04:57 pm
jgoot- that trade does not use the BPT Momentum to hold the trade. As I stated, that is simply an exhaustion trade to catch a reversion to mean pullback, not to catch a trending trade. If I use the momentum the results are not as good because as I showed in the video while some trades mark tops, a lot of them don't and are simply pullbacks in the uptrend
The short stays on since SPY is over 187.01?
Posted by bravestar on 11th of Mar 2014 at 04:02 pm
The 8 day line finished
Posted by sbaxman111 on 11th of Mar 2014 at 04:25 pm
The 8 day line finished the day at $187.30. Spy closed at 187.23 - thus you should exited the short trade at the close today based on the rules.
Important - SPY Pro system trade alert
Posted by matt on 11th of Mar 2014 at 04:53 pm
taking the same settings and applying them to a 40 year S&P 500 cash chart results in 96% winning trades, thus just an FYI I'm probably going to adjust the settings of the SPY Pro system to take the trade officially in the future