3309 Drysdale Ct
Edwardsville, IL 62025
The exhaustion trade may trigger today on the SPY system, not of
course if the market closes down, will need to close up for it to
trigger. The name should be self explanatory, it's a condition
where the market has exhausted itself and due for a quick pullback
statistically. I've attached an image showing the statistics,
has occurred 17 times since 1995, 100% winners up to now anyway. I
have two variations of it, Exhaustion 1 and 2. Exhaustion 2
triggered in Jan 27th 2018, which that was clearly an
obviously parabolic blow off exhaustion type condition. I don't see
this condition like that and indeed most of the trades for this sub
system are not like that, many simply produce small pullbacks say
below a 5 or 9 EMA then price goes right back up.
Also YES the ES Breakout system is still long. Therefore when
trading both the SPY and ES systems this is an example of an
overlap, where you have a profitable long trade and then a short
trade occurring while the Long trade is still open.
anyway I'll let you know later in the day if the condition is
still valid near the close
Here's a couple images, one thing I noticed today's entry
doesn't exceed today's candle high. I noticed that same of
the past ones took a little draw down if they were not a new highs
above the recent candles. Anyway I'll test that now and add
a condtion and see if that makes any difference to the stats,
otherwise obviously we are in a trade even if that turns out better
and the condition filtered this one out.
otherwise there's two exhaustion type conditions, one has to
have at least 26 or greater consecutive days above the 9 SMA along
with other overbought readings like RSI, %R, etc. The other needs
more than 46 consecutive days above the 15 MA. Jan 2018
triggered the 46 bar version, today's version was the 26 bar
also guys as far as options, for the combined ES and SPY systems
I will be using smaller delta options like 60 or 70 vs the 90 I
have been using since May. However technically since we are not
using the SPY and ES systems yet I'm using the original option
follow up on my comments yesteraday about adding a filter to the
exhaustion system where price had to be at new highs. The
exhaustion short yesterday did not take out out Tuesday's highs for
example. Anyway the results of that added filter - first off you
reduce the number of trades as some are filtered out. However I
noticed it reduces draw down by quite a bit, as much as half on
some past trades.
With the filter on the system would not have shorted yesterday
but would be shorting today instead :( Yeah I know.
anyway going forward for future trades I will be using that
filter. But obviously we are in the current trade as is.
that said yesterday I did say that I thought the market would go
higher first before pulling back because of the 15 and 60 min
charts, and we see that today.
Great work as always on the filter.
SPY exhaust system trade was taken yesterday
Yep I stated as much in the post. going forward of course we
will use that new filter setting.
also side note there could be a second entry, however it's too
close to call until the close
Matt - Great work on all of this. By using smaller delta
options of 60/70, does that mean you're looking to ramp up the
leverage to about 20x vs the 90 deltas that act like 10x
Matt, thanks for this input. Could you send us the page on the
summary stats showing what the draw-downs have been.
Agree, thanks for your hard work on this Matt! Definitely
understand this is a first entry and may not be perfect; may need a
couple more. This uptrend is hard to kill!
agree, thanks for your hard work and commitment
Just curious if we are getting back into trigger territory on
yes but I have to focus, have a lot to do if there is one, can't
be replying here until after I get stuff out
No prob, will stay tuned, thx
Will you send out an email today this triggers?
I mean, the last sentence on that post is "anyway I'll let you
know later in the day if the condition is still valid near the
otherwise unless the market rallies back today it will not be
The exhaustion condition is no longer there as the market pulled
off the morning highs and SPY is now down. However should the
market recover and close up by the end of day the condition could
come back, anyway just an early heads up
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