Posted by sbaxman111 on 24th of Jun 2016 at 03:31 pm
As I have posted previously on several occasions I follow
RSI-2 levels for the major indexes. One thing I pay attention to is
when one or more of the RUT, SPX, or NDX closes with a reading
below 10%, and then the next day one or more of these close above
60%. This is also true when there is a close above 90% by one or
more of these indexes - followed by a close the next day below 30%.
In each case there is a pretty good statistical probability of a
reversal the next trading day that I could trade using the RUT
funds/etfs that I prefer.
Today will be the 10th time that the 90% to below 30%
pattern could take place since 10-14-15. This date in October of
last year was the last time that no reversal was produced on the
<30% close day that made money. All the others produced nice one
day gains.
I also watch my customized daily %B indicator when it is
paired up with a long or short signal from the 60 min versions that
I use. At 3:15 this combination is providing a new long signal for
today. The daily %B I use has also moved from an extreme reading on
the high side to an extreme reading on the low side in just one
day. This doesn't happen very often and statistically, has a high
success rate in predicting a reversal. This is also occurring on
the TYX - which might be a safer trade than the indexes.
The NAAD, NYAD, ULT and TRIN indicators are also providing
new Long signals. The RVX is above its upper BB line and is almost
20% above its 10 day ema. The Vix is almost 29% above its 10 day
ema line.
The cautionary part of the daily charts for me comes from
the fact that the daily RSI-2 values aren't very low at the moment
given the Brexit backstop to the day. They are in the 15-20% range.
I also worry about possible margin call activity rearing its head
on Monday after today's selloff. Or will the European stock selloff
produce a mentality that the USA is a better safe haven for stocks
right now? Looking at this same kind of technical data during the
height of the financial crisis, I see plenty of short-term winning
trades, normally lasting one day, using the same technical
signals.
As I posted earlier today Spy Pro signals did very well
during the crisis. So scaling into a new long position after an 8%
gain on today's Short trade seems reasonable to me, and/or also
scaling into a short TYX/TBT trade.
Posted by frtaylor on 26th of Jun 2016 at 04:02 pm
I can hear Steve saying something like "we stand a better chance
of a positive EOD print on Monday if we open with a gap down, hit a
lower low on an intraday chart with neg div, then reverse. If we
open within Friday's candle, chances are we'll end in the red, with
possibly lower low vs. Friday."
that's generally better, after such a move down I will be on the
lookout for a bounce though, I actually don't mind the SPY system
being long here, maybe it ends up taking a 2nd position, but I
think there's a chance the trade can be a winning trade. I
view extreme moves like this more as opportunity vs being scared
like the masses.
Posted by sbaxman111 on 24th of Jun 2016 at 04:54 pm
It only took until about 4:15 today to hear on CNBC that
you "can't time the market" and "I'm a long term investor" retorts
immediately after one guest suggested that "cash was a
position".
I just looked at the 20 worst Dow days in terms of point
losses - which was already updated to include today as the 8th
worst point loss day. I then looked at what the SPX did the day
after these worst Dow days.
Obviously we don't know what next Monday will bring. For
the other 19 big down days the SPX has lost money the next day on 8
occasions. These were -1.61%, -1.18%, -1.35%, -3.94% (8-22-15),
-0.06%, -1.16%, -1.75%, and the worst was -5.02% on
11-6-08.
The day after Black Monday in 1987 (a 22.6% loss) the SPX
eventually gained 5.34% the next day after recovering from losses
early in the day.
Just last week we looked like new all time highs for SPX
might be possible. In 1987 the market had reached its high point in
late August...almost 2 months removed from a high point.
Today I scaled in 25% of my money Long. If history is a
guide based of off the previous 19 worst Dow point days, I look at
my theoretical exposure as 25% of the 5.02% "worst day after"
event. if i can't take that level of loss, I have no business
trading stocks.
"Stay the course" was their mantra of the day. The message
never fluctuates despite a constantly changing world.
Never mentioned is the inherent conflict of interest that exists
between Fidelity and participants in the 401k/profit sharing plans
they administer. Fidelity's management fees are based upon
$$$ invested in the mutual funds they manage. Why would they ever
suggest participants move to cash? It's against their
financial interest.
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As I have posted previously
Posted by sbaxman111 on 24th of Jun 2016 at 03:31 pm
As I have posted previously on several occasions I follow RSI-2 levels for the major indexes. One thing I pay attention to is when one or more of the RUT, SPX, or NDX closes with a reading below 10%, and then the next day one or more of these close above 60%. This is also true when there is a close above 90% by one or more of these indexes - followed by a close the next day below 30%. In each case there is a pretty good statistical probability of a reversal the next trading day that I could trade using the RUT funds/etfs that I prefer.
Today will be the 10th time that the 90% to below 30% pattern could take place since 10-14-15. This date in October of last year was the last time that no reversal was produced on the <30% close day that made money. All the others produced nice one day gains.
I also watch my customized daily %B indicator when it is paired up with a long or short signal from the 60 min versions that I use. At 3:15 this combination is providing a new long signal for today. The daily %B I use has also moved from an extreme reading on the high side to an extreme reading on the low side in just one day. This doesn't happen very often and statistically, has a high success rate in predicting a reversal. This is also occurring on the TYX - which might be a safer trade than the indexes.
The NAAD, NYAD, ULT and TRIN indicators are also providing new Long signals. The RVX is above its upper BB line and is almost 20% above its 10 day ema. The Vix is almost 29% above its 10 day ema line.
The cautionary part of the daily charts for me comes from the fact that the daily RSI-2 values aren't very low at the moment given the Brexit backstop to the day. They are in the 15-20% range. I also worry about possible margin call activity rearing its head on Monday after today's selloff. Or will the European stock selloff produce a mentality that the USA is a better safe haven for stocks right now? Looking at this same kind of technical data during the height of the financial crisis, I see plenty of short-term winning trades, normally lasting one day, using the same technical signals.
As I posted earlier today Spy Pro signals did very well during the crisis. So scaling into a new long position after an 8% gain on today's Short trade seems reasonable to me, and/or also scaling into a short TYX/TBT trade.
I can hear Steve saying
Posted by frtaylor on 26th of Jun 2016 at 04:02 pm
I can hear Steve saying something like "we stand a better chance of a positive EOD print on Monday if we open with a gap down, hit a lower low on an intraday chart with neg div, then reverse. If we open within Friday's candle, chances are we'll end in the red, with possibly lower low vs. Friday."
that's generally better, after such
Posted by matt on 26th of Jun 2016 at 04:05 pm
that's generally better, after such a move down I will be on the lookout for a bounce though, I actually don't mind the SPY system being long here, maybe it ends up taking a 2nd position, but I think there's a chance the trade can be a winning trade. I view extreme moves like this more as opportunity vs being scared like the masses.
Yeah, Friday was one helluva
Posted by frtaylor on 26th of Jun 2016 at 04:08 pm
Yeah, Friday was one helluva candle. A reflexive bounce tomorrow or Tues would not surprise.
cautionary part of the daily charts
Posted by wowten on 24th of Jun 2016 at 03:56 pm
And what is the chance of black Monday take 2?
It only took until about
Posted by sbaxman111 on 24th of Jun 2016 at 04:54 pm
It only took until about 4:15 today to hear on CNBC that you "can't time the market" and "I'm a long term investor" retorts immediately after one guest suggested that "cash was a position".
I just looked at the 20 worst Dow days in terms of point losses - which was already updated to include today as the 8th worst point loss day. I then looked at what the SPX did the day after these worst Dow days.
Obviously we don't know what next Monday will bring. For the other 19 big down days the SPX has lost money the next day on 8 occasions. These were -1.61%, -1.18%, -1.35%, -3.94% (8-22-15), -0.06%, -1.16%, -1.75%, and the worst was -5.02% on 11-6-08.
The day after Black Monday in 1987 (a 22.6% loss) the SPX eventually gained 5.34% the next day after recovering from losses early in the day.
Just last week we looked like new all time highs for SPX might be possible. In 1987 the market had reached its high point in late August...almost 2 months removed from a high point.
Today I scaled in 25% of my money Long. If history is a guide based of off the previous 19 worst Dow point days, I look at my theoretical exposure as 25% of the 5.02% "worst day after" event. if i can't take that level of loss, I have no business trading stocks.
Received a similar message from Fidelity Investments
Posted by RichieD on 24th of Jun 2016 at 07:07 pm
"Stay the course" was their mantra of the day. The message never fluctuates despite a constantly changing world.
Never mentioned is the inherent conflict of interest that exists between Fidelity and participants in the 401k/profit sharing plans they administer. Fidelity's management fees are based upon $$$ invested in the mutual funds they manage. Why would they ever suggest participants move to cash? It's against their financial interest.