3309 Drysdale Ct
Edwardsville, IL 62025
On the trade 284 strike Aug 21st was the SPY options. SPY
10K was for the ETF's for both sub systems:
So....looks like two of the SPY reversion to mean systems are
going to trigger today, well one might drop off. The QE MOMO (that
one is about to disappear if the 60 Stocahstic drops below 90.5%.
Also the Trend/Pullback will be taking a long for sure.
Here's a snapshot of the historical stats.
the thing is guys: I'm not sure what to do about these: I
do think short term the market is getting very oversold and due for
a bounce, so these may provide a trade. However the market is also
out of statistical norm as I've discussed below. These reversion to
mean systems are based on market statistical norms such as
historically if price has sold off 9 days in a row and the RSI is
below X level then 90% of the time you will get a bounce, stuff
like that. Well this year we've had moves that are beyond a lot of
historical norms/statistics. On the other hand I think short
term the market is due for a bounce however.
I have been strongly considering removing them from the website
as it simplifies things for us and allows us to focus on analysis
and trade ideas. Plus it's hard on me when the trades go through
hard times worrying about members on the website.
that said here's the stats: I have not decided if I'm
going to send them out or just post them for informational
purposes: what do you guys want to do? I'll probably send
them out but let everyone know.
As far as the trades it would be $10K into SPY ETF for both sub
systems, and for the option it would be Aug 21st expiration date
and target a delta of 0.6 to 0.7, one call option. 281 strike
is 0.7 delta and a 293 strike is 0.6 delta since price is moving so
much I can't confirm option until basically the close
see images for stats and examples
Matt I'd really appreciate if you keep posting the systems.
Historically they have great returns, and we are all aware
the market is a little bit crazy these days. We could always
adjust our risk amounts. Thx.
as far as the call option: Aug 21st, I like to do either 0.7 or
0.6 delta, so splitting difference
that would be 284 strike. remember they trade
for 15 min after the cash close, and 10K SPY for the Trend/Pullback
Might consider trading these systems without the options?
Options seem to limit to a time frame; one of the reasons I've
never been comfortable with buying calls/puts. I prefer to sell
The SPY systems have worked tremendously well over time. Don't
get caught up in what happened during a 8 week period (end of Feb
That was essentially a black swan event (and you still could
have hedged by following recommendations here in the
I made money off the last group of long trades other than a loss
on one option. They all came back over time although due to
time premium, the options did not. I abandoned the options
due to my discomfort with time factor but everyone is
different in their trading styles.
I agree, I'd like you to keep the reversion to mean systems.
It's honestly the biggest reason I joined, and I would be very sad
to see them go away.
I think it's important like you said to remember that these are
based off statistics and we are outside the statistical norms this
year. That said, no trading strategy is 100%, so one must determine
the max drawdowns they are willing to take and trade with a
position size according to that, which I know is challenging when
we are waiting for the system to send a sell signal and we don't
have an actual stop that we can use to help determine the position
All that to say, I do hope you keep sending out the signals
Matt. Having a mechanical system like this to add to my strategies
has been very beneficial over time.
well said - a very seasoned trader told me at one time - find
something that works - do it over and over and over again until it
stops working - find something else that works - do it over and
over and over until it stops working - find something else that
works - etc. etc. wash, rinse, repeat. It is maybe considered
boring, but when its working, it works. A fundamental rule
for myself is - it is not about what you win, it is about what you
do not lose. Happy trading!
Matt I suggest you keep the SPY systems going on the site.
Include the ES as well.
Totally agree - don't worry about members Matt, just do your
thing, much appreciated.
My vote would be to keep them. I also don't think you
should worry about members. Systems aren't 100%. If they were, none
of us would be working anymore. Your caveats about statistical
norms are helpful. Thx.
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!