The purpose of this site is to share results of a trading system that I use for identifying both long-term and short-term trading opportunities. I take the time to do this because of my passion for investing and helping others succeed. The system helped me avoid the "Crash of 2007/2008" and every major correction since then. The cornerstone of my trading system are analyses of futures and equity and index options.

If you are an investor, there's no need to concern yourself with the short-term trades that I discuss. The notes in the left-hand pane will provide you with my high-level outlook for the calendar year and for the next 12 months. The left pane will also contain alerts about possible intermediate-term reversals to help you make timely decisions for rebalancing your portolio, taking profits, or putting new money to work.

If you are a short-term trader, I will detail in my blog posts ideas for going long and short the S&P indices to capitalize on the aforementioned reversals.

This site is for information purposes only. Past performance of the trading system is not a guarantee of its future success. Please consider consulting a qualified investment adviser before making investment decisions.



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Friday, October 17, 2014

Update on my macro indicator and a possible market top near August of 2015

Just a quick note: My macro indicator has declined for a second consecutive week. The indicator value at it's peak was 171 and it now stands at 104. It would need to fall below a certain negative level before I can make the call of a possible market peak sometime near August of 2015.

The virtues of discipline

Well I'm back from a backpacking trip and I learned the hard way about the value of discipline and the pain of not following my trading rules. As I indicated in a prior post, I used some of my idle cash to buy into the market on pullbacks because I wasn't going to have access to a computer and there was a chance that my short-term indicator would generate a buy signal. Unfortunately, it didn't happen and I was left with a greater than ideal exposure to the market. I took the opportunity today to sell (for a small loss), the trades I had made before my backpacking trip. So as it stands now, my equity exposure is 25% of what it would be normally if I were fully invested. For the IRA however, this equates to a 49% equity position comprised of 9% core, 2.5% alpha, 7.3% sector, and 30% dividend/low volatility stocks -- My asset allocation for the IRA emphasizes dividend and low volatility stocks during times of "reduced" equity exposure and de-emphasizes "core" and "alpha". Now, I don't foresee a short-term signal until sometime between October 24 and October 31. According to my rules, the only other events that would trigger buying are (1) a positive weekly RSI divergence, or (2) a penetration of a trailing ATR3 stop. In regard to no. 1, a divergence can be formed next week if the market trades near this week's low of 1820 or lower and closes above 1886.76. With no. 2, the stop now stands at 1910.37. With all three scenarios, I would also like to see a break of the downward trending money flow indicators. That's all for now.

Friday, October 10, 2014

2015 Top??

As I've been saying for quite some time, I see a generally positive bias for the market well into 2015. Sure, we may be experiencing a correction now, but my macro indicator is still bullish. The question, however, is how long this positive bias will last. Well, I may have an answer. My macro indicator has finally shown some signs that we may see a market top near August of 2015. The indicator will have to continue to weaken for me to make a more definitive call. It may take a few more weeks or months for me to make that call, however. If in fact I make this call, the next question will be whether the top will be a start of a prolonged bear market. The way I will gauge this is as follows: As August 2015 approaches, my macro indicator will provide a 12 month look-ahead into market liquidity. If the indicator points to a weak period lasting more that about 6-9 months (beyond August 2015), I will be recommending whether to reduce equity exposure significantly, including shorting the market for hedging or profit-making opportunities. Data for my macro indicator is based on weekly figures so I will be publishing updates accordingly.

Thursday, October 9, 2014

Time to get my feet wet

My short-term indicator is still pointing to the possibility of a buy signal next week. Since I won't be in front of a computer next week, I made some early moves by taking 50% of my sidelined cash and buying at the close @ S&P 1929. Unless I see a significant move down (or up) tomorrow, I doubt that I will be deploying any more cash. The only case for buying on the up draft would be if the S&P closed above either 1967 (to create a weekly positive RSI divergence) or if it broke the downward trailing ATR3 stop at 1983. If the market makes a significant move downward to 1900, I might be tempted to buy in with another 25% of my cash...we'll see. With the 200 day moving average at 1904 and with my macro indicators still positive for the next 12 months, it might be a good long-term play.

Thursday, October 2, 2014

Coulda, Shoulda, Woulda -- What's Next

So the reduction in my equity position two days ago was based the breaking of the ATR4 level at S&P 1963 along with weekly RSI divergences. In retrospect, my short-term indicator which flashed a sell signal on September 4 (@ S&P 2000) was right on. However, I refrained from taking this "short-term" trade since, in my opinion, we are in a good macro environment. With that said....Although I'm happy to have pulled the trigger at 1963, it would have been nice to take profits earlier. Going forward, I will be highlighting and taking action on short-term signals if the "stars align." As far as next steps, I'm watching my short-term indicator for entry points and the trailing ATR3 stop which will serve as a fallback to trigger a re-entry into the market. Even though it's too early to gauge when my short-term indicator will fire, the sweet spots appear to be 10/10, 10/14, or 10/28. The current trailing stop is 1983. More later as warranted.