Follow signals from the Prophet4Traders system to identify turning points in the U.S. stock market
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 market liquidity to gauge longer-term market sentiment and equity and index options (put/call ratios) to identify short-term entry and exits.
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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Monday, August 11, 2014
Positive Divergence Formed, BUT NOT SO FAST!
The rally on Friday was enough to create a weekly positive RSI divergence. However, in looking at money flow (as measured by the Chaikin Oscillator), it didn't offer any confirmation to support a fully bullish stance at this point. My short-term options-based indicator is still projecting a buy signal on the 18th or 19th. Based on the parameters discussed, I will likely invest 50% of sidelined cash on the 18th or 19th; however, if or when the Chaikin Oscillator breaks the downward trendline as depicted in the chart below, I will invest 100% (given that a positive divergence has already been formed). Any breakdown below the prior week's low will change the aforementioned "entry" plan.