gold stocks are up today, helps that the US
Dollar is down. However I commented yesterday during the market
carnage that this is a group to watch that might form lower highs
instead of making new lows - a lot of these like BTG, BVN, IAG etc
have trendline or MA support below
and again you guys can so what fits your style. Clearly we got
the mean reversion today in a big way. Price also closed right on
the uptrend line on the SPX, so we could get an oversold bounce of
this year. The system is not closing but we could potentially see a
bounce off that area and if it would make you feel better to lock
something in then do so
Good morning everyone, as you know
the market reversed sharply on the hot CPI data. ES S&P futures
were up 30 points pre market but then reversed 120 points on that
CPI data. Currently SPX cash is down 90 points!!!
The systems caught a very timely
short yesterday! See the chart below! A good way to
think about the systems (except for the breakout) is that they look
for periods where the market is out of bounds, where the rubber
band is too stretched too far and prone to a reversion back to the
mean. Most of the time they exit on that reversion to the mean, but
will hold on occasion for trending moves if other indicators align,
kind of like that bear long which lasted 5 weeks from July 13th to
Aug 22 and a nice trending move was caught.
By the way the system isn't looking
to cover/close out here, I'm guessing the trending momo indicator
is red and so it's looking to hold. I will investigate when I have
time and confirm that. That said the minimum goal has been
achieved with a sharp reversion back to the mean and thus even if
the system holds today I will likely elect to cover 1/2 of it just
to be safe.
Congrats if you took the short
signal yesterday. And while the sub system triggered on ES and not
SPY, remember that even if futures don't fit your risk profile and
are not something that you can trade, you can still follow these
trades signals by simply using one of the SPX related ETF's instead
(SPY, SH, SSO, SDS, SPXU, UPRO). The reason I share systems
trades on both SPY and ES is to give us the most number of trade
opportunities. The 21 systems will catch trades on ES that are not
triggered on SPY - thus we get more trade opportunities this
way.
by the way the system isn't looking to cover/close out here, I'm
guessing the trending momo indicator is red and so it's looking to
hold. I will investigate when I have time and confirm that.
that said the minimum goal has been achieved with a sharp
reversion back to the mean and thus even if the system holds today
I will likely elect to cover 1/2 of it just to be safe.
again as posted earlier a good way to think about the systems
(except for the breakout) is that they look for periods where the
market is out of bands, where the rubber band is too stretched and
prone to a reversion back to the mean. Most of the time they exit
on that reversion to the mean, but will hold on occasion for
trending moves if other indicators align, kind of like that bear
long which lasted 5 weeks from July 13th to Aug 22
GDX - Chart Link- bouncing today - otherwise
that nice long trendline over the GDX/GLD ratio is something to
monitor. Honestly it's best to see that broken and maybe have a
positive symmetry break, then buy a higher low
$BPGDM - Chart Link- no buy signal from the
BPGDM yet, MACD is crossing so it could come should this area were
to follow through and not just reverse back down again
are you referring to your NQ chart from below? would be best if
price held that neckline - also not entirely sure that's an inv
H&S with how unsymmetric the left and right shoulders are.
otherwise from that Steve covered last light - this bounce is
either a w4 (which if the case may have ended) or we have a 5th
wave low and we'll see a larger abc unfold
for the wave 5, it would have been best if price gapped up we
had a trend day gap and go, but clearly we did not
charts are done, a summary has been written. I'm going to record
here shortly, it will probably be posted in about an hr or so.
futures will open here in 12 min
my writeup summary
Remember our comments back in Julywhen the CPI data came in
a bit less than expected and we strongly advised against taking
that as a chance that the Fed might shift course sooner than
expected. We stated that the Fed's goal is to get inflation under
control and back down to their target levels and that they were NO
WHERE close to pivoting or even slowing down their rate hikes.
Think about it guys, even if we've seen 'peak' inflation (too early
to say that) inflation doesn't just peak and go straight down, it
stays elevated for sometime and only comes down slowly. The problem
with inflation is that it's like a genie that once is let out of
the bottle, it's hard to put it back into the bottle.
Well on Friday the Fed chairman Powell put all that speculation
to rest and validated what Steve and I have been saying all long.
Powell stated on Friday that its goal is to bring inflation down to
targeted levels, his comments "use our tools forcefully, and it
will cause some pain to the US Economy". Also, let's not
forget quantitative tightening: The Fed is about to ramp up balance
sheet shrinkage! As you would expect the market sold off very
sharply on this with the S&P 500 losing -142 points to close
with one of the ugliest candlesticks I've seen.
The bear market rally stalled 2 weeks ago when the SPX tagged
its 200 day MA (and near a downtrend line from the Jan highs) and
logically sold off from there. Just over a week ago the SPX and the
other indexes broke their uptrend channels from the early July
lows, which was a 'shot across the bow'. We then favored a lower
high and showed a head and shoulder pattern, which is obviously
playing out!
Short-term what I'm now watching for is the rising 50 day MA on
the indexes and a lot of individual market sectors. The 50 day MA
is now only about 50 points away on the S&P 500 and has a
positive slope. Should we get follow through selling on Monday,
watch for at least a reaction bounce off the 50 day MA.
From a wave count perspective, I can count 5 waves to the
downside, therefore the option of price moving down to the 50 day
MA and then starting some sort of abc rally would then be exited.
The more bearish view would have this sell off as a wave 3. The
least bearish view would have this as wave C.
The US Dollar stated resistance just over a week ago, however it
may be forming a bear flag and take out that resistance.
Crypto Currencies: Bitcoin sold off from the bear flag like
pattern last week and longer term looks quite ugly
Overall commodities posted gains for the week with the DBC index
gaining +2.6%. Coffee is note worthy here with a bull flag look on
the weekly. Precious metals can't get any short of rally going as
usual.
$SPX - Chart Link- price is basically right on
the 20 day MA now. Also note the largest pullbacks in the uptrend
were the A and C waves during that June/July consolidation before
the big run - we have not broken those point value pullbacks
yet
At the moment the bear long is meeting conditions for a higher
low 2nd entry. Honestly I don't know why it didn't enter 2nd and
3rd entries on the two short-term pullbacks in late July and early
Aug. It's been years since I've looked at the higher entries so I
may need to revisit the logic on those to see if I keep it the same
or make some adjustments.
again the high entry prices as I've covered is only possible on
a few strategies such as the bear long, RSI Oversold, and the Bear
Exhaustion - they only occur after a lot of profit is already
locked in, and attempt to buy a shallow pullback in the uptrend to
capture more gains. here's an image from the past showing some of
those higher entries
Rare to see the systems catch an entire move like that but they
did - better than analysts and traders.
While we have focused on the very nice ES bear long from July
13th, remember that the same bear long went long in June 1 day off
the lows
The bear long went long on June 13th and 16th (1 day before the
bottom), and made 147 ES points on that trade. Then went long again
on July 13th and has been holding every since
The ES Bear long has made 623 ES or SPX points!!! I don't think
too many can say they've made that many points on this uptrend,
that
Good morning everyone, I'm checking in here before I head out
for the day, waiting on my family to get ready so figured I'd check
in
anyway yesterday as you know, the Hi Mid Lo system triggered a
short on ES yesterday at 4151.75, ES is now trading at 4119 and is
already looking to exit, the trade is up about 32 ES points
realize that this hi mid lo system is very aggressive about
exits, it is pure reversion to mean, closes on a close back below
the 5 SMA, it does not try to hold trades for a trending bigger
move. Do NOT take the system exiting as a sell signal for the
market. It got it's trade, the reversion to mean took place, it
books em Danno
$TNX - Chart Link- really looks like over time
could work down to that 200 day MA - that will really f-up the
yield curve
$TNX - Chart Link- that weekly really playing
out from that doji and wide ribbon
$TNX - Chart Link- this big picture chart -
I've been calling for the 10 year to eventually pullback to retest
that 35 year downtrend line and then find support there and stage
another big rally - anyway that trendline would come in around the
2.4 - 2.5 area
FXY - Chart Link- I've been patient with this
one, I bought it inside the wedge, then added to it when it broke
through the wedge and backtested the trendline. It then had a nice
pop last week (I didn't sell it) and now nice pop today - nearing
that first target of mine from symmetry and 50 day MA
pm stocks
Posted by matt on 14th of Sep 2022 at 10:38 am
gold stocks are up today, helps that the US Dollar is down. However I commented yesterday during the market carnage that this is a group to watch that might form lower highs instead of making new lows - a lot of these like BTG, BVN, IAG etc have trendline or MA support below
GDX - Chart Link-
BTG - Chart Link-
BVN - Chart Link-
and again you guys can
QE Short ES Trade and trade details
Posted by matt on 13th of Sep 2022 at 07:38 pm
and again you guys can so what fits your style. Clearly we got the mean reversion today in a big way. Price also closed right on the uptrend line on the SPX, so we could get an oversold bounce of this year. The system is not closing but we could potentially see a bounce off that area and if it would make you feel better to lock something in then do so
QE Short ES Trade and trade details
Posted by matt on 13th of Sep 2022 at 10:36 am
here's an image showing the currently short trade on ES.
as I suspected the system is NOT looking to exit because the momo trending indicator is red - see the left chart.
If I turn that momo condition off the system would exit today by the simple mean reversion - to the right.
I've included the statistics to both below the chart. The max draw down is the same for both
what I may do today is cover 1/2 and leave 1/2
I held off on closing
Taking some hedge off, will look to add if we ...
Posted by matt on 13th of Sep 2022 at 10:15 am
I held off on closing my hedges/shorts early on the gap down as I thought this had potential to be a trending down day. just watching closely for now
FYI I sent out this
Short trade comments
Posted by matt on 13th of Sep 2022 at 09:56 am
FYI I sent out this email update on the systems
------------
Good morning everyone, as you know the market reversed sharply on the hot CPI data. ES S&P futures were up 30 points pre market but then reversed 120 points on that CPI data. Currently SPX cash is down 90 points!!!
The systems caught a very timely short yesterday! See the chart below! A good way to think about the systems (except for the breakout) is that they look for periods where the market is out of bounds, where the rubber band is too stretched too far and prone to a reversion back to the mean. Most of the time they exit on that reversion to the mean, but will hold on occasion for trending moves if other indicators align, kind of like that bear long which lasted 5 weeks from July 13th to Aug 22 and a nice trending move was caught.
By the way the system isn't looking to cover/close out here, I'm guessing the trending momo indicator is red and so it's looking to hold. I will investigate when I have time and confirm that. That said the minimum goal has been achieved with a sharp reversion back to the mean and thus even if the system holds today I will likely elect to cover 1/2 of it just to be safe.
Congrats if you took the short signal yesterday. And while the sub system triggered on ES and not SPY, remember that even if futures don't fit your risk profile and are not something that you can trade, you can still follow these trades signals by simply using one of the SPX related ETF's instead (SPY, SH, SSO, SDS, SPXU, UPRO). The reason I share systems trades on both SPY and ES is to give us the most number of trade opportunities. The 21 systems will catch trades on ES that are not triggered on SPY - thus we get more trade opportunities this way.
Short trade comments
Posted by matt on 13th of Sep 2022 at 09:46 am
by the way the system isn't looking to cover/close out here, I'm guessing the trending momo indicator is red and so it's looking to hold. I will investigate when I have time and confirm that.
that said the minimum goal has been achieved with a sharp reversion back to the mean and thus even if the system holds today I will likely elect to cover 1/2 of it just to be safe.
again as posted earlier a good way to think about the systems (except for the breakout) is that they look for periods where the market is out of bands, where the rubber band is too stretched and prone to a reversion back to the mean. Most of the time they exit on that reversion to the mean, but will hold on occasion for trending moves if other indicators align, kind of like that bear long which lasted 5 weeks from July 13th to Aug 22
So far been acting like a Trend day
Posted by matt on 12th of Sep 2022 at 10:00 am
$SPX - Chart Link
GDX and BPGDM
Posted by matt on 2nd of Sep 2022 at 12:54 pm
GDX - Chart Link- bouncing today - otherwise that nice long trendline over the GDX/GLD ratio is something to monitor. Honestly it's best to see that broken and maybe have a positive symmetry break, then buy a higher low
$BPGDM - Chart Link- no buy signal from the BPGDM yet, MACD is crossing so it could come should this area were to follow through and not just reverse back down again
are you referring to your
NQ 30 min IHS? Monitor...
Posted by matt on 2nd of Sep 2022 at 10:07 am
are you referring to your NQ chart from below? would be best if price held that neckline - also not entirely sure that's an inv H&S with how unsymmetric the left and right shoulders are.
otherwise from that Steve covered last light - this bounce is either a w4 (which if the case may have ended) or we have a 5th wave low and we'll see a larger abc unfold
for the wave 5, it would have been best if price gapped up we had a trend day gap and go, but clearly we did not
Uranium stocks
Posted by matt on 31st of Aug 2022 at 09:49 am
UEC - Chart Link- followed through, as you know they recovered yesterday's morning sell off nicely
CCJ - Chart Link- could be flagging
URA - Chart Link- flagging
UUUU - Chart Link- was down this morning but notice it tagged that trendline and found support there
Newsletter
Posted by matt on 28th of Aug 2022 at 05:48 pm
charts are done, a summary has been written. I'm going to record here shortly, it will probably be posted in about an hr or so. futures will open here in 12 min
my writeup summary
Remember our comments back in Julywhen the CPI data came in a bit less than expected and we strongly advised against taking that as a chance that the Fed might shift course sooner than expected. We stated that the Fed's goal is to get inflation under control and back down to their target levels and that they were NO WHERE close to pivoting or even slowing down their rate hikes. Think about it guys, even if we've seen 'peak' inflation (too early to say that) inflation doesn't just peak and go straight down, it stays elevated for sometime and only comes down slowly. The problem with inflation is that it's like a genie that once is let out of the bottle, it's hard to put it back into the bottle.
Well on Friday the Fed chairman Powell put all that speculation to rest and validated what Steve and I have been saying all long. Powell stated on Friday that its goal is to bring inflation down to targeted levels, his comments "use our tools forcefully, and it will cause some pain to the US Economy". Also, let's not forget quantitative tightening: The Fed is about to ramp up balance sheet shrinkage! As you would expect the market sold off very sharply on this with the S&P 500 losing -142 points to close with one of the ugliest candlesticks I've seen.
The bear market rally stalled 2 weeks ago when the SPX tagged its 200 day MA (and near a downtrend line from the Jan highs) and logically sold off from there. Just over a week ago the SPX and the other indexes broke their uptrend channels from the early July lows, which was a 'shot across the bow'. We then favored a lower high and showed a head and shoulder pattern, which is obviously playing out!
Short-term what I'm now watching for is the rising 50 day MA on the indexes and a lot of individual market sectors. The 50 day MA is now only about 50 points away on the S&P 500 and has a positive slope. Should we get follow through selling on Monday, watch for at least a reaction bounce off the 50 day MA.
From a wave count perspective, I can count 5 waves to the downside, therefore the option of price moving down to the 50 day MA and then starting some sort of abc rally would then be exited. The more bearish view would have this sell off as a wave 3. The least bearish view would have this as wave C.
The US Dollar stated resistance just over a week ago, however it may be forming a bear flag and take out that resistance.
Crypto Currencies: Bitcoin sold off from the bear flag like pattern last week and longer term looks quite ugly
Overall commodities posted gains for the week with the DBC index gaining +2.6%. Coffee is note worthy here with a bull flag look on the weekly. Precious metals can't get any short of rally going as usual.
no changes for the reversion
How are those long System Trades looking? Was wondering if ...
Posted by matt on 23rd of Aug 2022 at 03:42 pm
no changes for the reversion to mean systems
remember today has been a yawner - good day for golf or something. This sideways chop almost always occurs after a trend move day like yesterday
SPX comments
Posted by matt on 22nd of Aug 2022 at 10:08 am
$SPX - Chart Link- price is basically right on the 20 day MA now. Also note the largest pullbacks in the uptrend were the A and C waves during that June/July consolidation before the big run - we have not broken those point value pullbacks yet
ES bear long may take a 2nd entry today
Posted by matt on 18th of Aug 2022 at 12:59 pm
At the moment the bear long is meeting conditions for a higher low 2nd entry. Honestly I don't know why it didn't enter 2nd and 3rd entries on the two short-term pullbacks in late July and early Aug. It's been years since I've looked at the higher entries so I may need to revisit the logic on those to see if I keep it the same or make some adjustments.
again the high entry prices as I've covered is only possible on a few strategies such as the bear long, RSI Oversold, and the Bear Exhaustion - they only occur after a lot of profit is already locked in, and attempt to buy a shallow pullback in the uptrend to capture more gains. here's an image from the past showing some of those higher entries
ES bear long captured 623 ES points since June on both of those trades
Posted by matt on 14th of Aug 2022 at 10:11 am
Rare to see the systems catch an entire move like that but they did - better than analysts and traders.
While we have focused on the very nice ES bear long from July 13th, remember that the same bear long went long in June 1 day off the lows
The bear long went long on June 13th and 16th (1 day before the bottom), and made 147 ES points on that trade. Then went long again on July 13th and has been holding every since
The ES Bear long has made 623 ES or SPX points!!! I don't think too many can say they've made that many points on this uptrend, that
early heads up the Hi Mid Low short may close out today, another quickie
Posted by matt on 5th of Aug 2022 at 08:48 am
Good morning everyone, I'm checking in here before I head out for the day, waiting on my family to get ready so figured I'd check in
anyway yesterday as you know, the Hi Mid Lo system triggered a short on ES yesterday at 4151.75, ES is now trading at 4119 and is already looking to exit, the trade is up about 32 ES points
realize that this hi mid lo system is very aggressive about exits, it is pure reversion to mean, closes on a close back below the 5 SMA, it does not try to hold trades for a trending bigger move. Do NOT take the system exiting as a sell signal for the market. It got it's trade, the reversion to mean took place, it books em Danno
following up on the sectors I covered last night
Posted by matt on 28th of Jul 2022 at 02:53 pm
IYT - Chart Link- said it has a bull flag look and added to the trade setups
XLP - Chart Link- nice pop
XLB - Chart Link- moved through that resistance area
XLI - Chart Link- nice continued moved after breaking out of the downtrend line yesterday
10 year yield
Posted by matt on 28th of Jul 2022 at 10:34 am
$TNX - Chart Link- really looks like over time could work down to that 200 day MA - that will really f-up the yield curve
$TNX - Chart Link- that weekly really playing out from that doji and wide ribbon
$TNX - Chart Link- this big picture chart - I've been calling for the 10 year to eventually pullback to retest that 35 year downtrend line and then find support there and stage another big rally - anyway that trendline would come in around the 2.4 - 2.5 area
FXY nice move
Posted by matt on 28th of Jul 2022 at 10:06 am
FXY - Chart Link- I've been patient with this one, I bought it inside the wedge, then added to it when it broke through the wedge and backtested the trendline. It then had a nice pop last week (I didn't sell it) and now nice pop today - nearing that first target of mine from symmetry and 50 day MA
GDXJ looking better
Posted by matt on 21st of Jul 2022 at 04:59 pm
GDXJ - Chart Link been out of the coil for a few days - has a level right above
GDXJ - Chart Link kind of an inverse H&S look now
GDXJ - Chart Link trendline base to watch and MA ribbons tight