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Jan 23rd:
Closing Read
The
Primary's short signal ended today as expected (2pm)and has started
to rise. As the direction of the Primary is not confirmed
by the Secondary, there is no long signal according to the discipline.
The Primary closed at -10,022 and should rise for the next
two trading days. A new short signal will be expected mid
next week unless the Primary turns over sooner. For the week
the +$1 strategy had two trades each making its target.
Jan 23rd:
11am
The
Primary continues to try to rise pulling SPY up off the opening
lows. Although a slope change is expected today at some point,
with signal weight at -1250 it will take quite awhile. If
signal weight begins to move back toward zero, the Primary will
rise quickly and trigger an exit short which will conclude this
cycle. The Primary is currently at -10350.
Update:
11:45am: Signal weight has risen from -1250 to -529 and a
slope change is expected back up within an hour as long as signal
weight remains below -300 otherwise it will take longer. Either
way, a new test of the lows is not expected until the next cycle
down. PS: this is the last post for the day as I have appointments.
Jan 23rd:
Opening Read
Another
gap opening as SPY makes its +$1 target all by itself. It
will take greater signal weight each half hour to keep the Primary
from rising. The double chevrons at 80.65 from the 20th and
21st should hold and drops below those levels should be unsustainable
for this cycle. The Primary is -9500.
Jan 22nd:
Closing Read
There
were several opportunities 3.5-4 hours after the signal to add to
the short position. Given the first short at the signal price
of 82.07, a second short was made between 83.07-83.40. This
created a 2X position size at a cost of 82.63. The GTC at
81.07 was cancelled and replaced with a GTC cover at 82.13 which
would be a .50 cent profit on 2X position size which equals the
$1 profit target on the original position. During the 3:30
bar SPY traded through the limit closing the position. This
is the style of trading utilized in the Plus a Buck strategy. By
focusing on achievable targets, intraday moves in price against
your position can be turned back in your favor. This is called
discipline and the strategy
achieved its profit target.
At
the close, the Primary was -9161 and while signal weight was -2150,
the change on the last bar of the day was only -19.5. This
means that the Primary will want to rise again tomorrow.
Jan 22nd:
2pm
The
Primary continues lower and cannot change slope today. The
move on SPY to 82.65 has created another shorting opportunity. Signal
weight is -2247 and supports a move back to the lows.
Jan 22nd:
1pm Enter Short SPY @ 82.07 issued.
(back
early) A short signal was issued at 1pm at 82.07 on SPY. The
Primary changed slope at -7750. The Plus a Buck strategy should
enter a GTC cover short at 81.07.
Jan 22nd:
11:30am UPCOMING SLOPE CHANGE AND SHORT SIGNAL
An
early slope change negative will be triggered next bar--12:00, followed
by an early enter short by 12:30 or 1pm at the latest. This
is one of these "Balloon under water" scenarios I spoke
of last week. 1)We KNOW that the Primary will turn over FOR
SURE within 1 hour. 2) We know we cannot get a slope change
back up today or until mid day tomorrow (at the earliest) HENCE:
we can short with impunity at any move up and be able to cover
that short at the lows from yesterday.
Jan 22nd:
10:30am
Signal
weight is -2153 and an early slope change down is expected within
2 hours, followed by a short signal. I will be away for a
couple of hours so these pages won't be updated until later today.
However, the automated email system is working and assuming
it doesn't crash it will send out the signals.
Jan 22nd:
Opening Read
The
Primary will continue to rise today. There is some possibility
of a slope change on the Secondary, but that won't be known until
later in the day, but at the opening it seems unlikely. The
Primary is at -8000 and a slope change back down is likely within
2.5 hours from the opening. Another short signal is likely
today.
A
few users emailed yesterday and asked if the Delineator can identify
trades regardless of the direction of the Secondary. The answer
is YES. There is a button to trade without the Secondary and
the chart is shown below. The Delineator will issue the same
sets of signals as it does for trading with confirmation of the
Secondary.
Jan 21st:
Closing Read
The
Primary rose to -8590 today as expected. It is possible that
the Secondary will turn up tomorrow which would generate a middle
long signal. It's called a middle signal because at the time
of the slope change on the Primary the direction was not confirmed
by the Secondary.
Jan 21st:
1pm
Yesterday's
low held as expected after the Primary changed slope back up this
morning. The Primary is currently -11,300 and rising.
Jan 21st:
Exit Short and Slope change confirmed
The
exit and slope change confirmed as expected.
Jan 21st:
Early Exit Short slope change up
The
Primary will change slope for sure at 11am. As the Secondary
is still down, the Primary will be in a neutral uptrend. The
Primary is -12,500 and will want to rise to at least zero. There
is the possibility of a change on the Secondary tomorrow which if
it happens will generate a middle long signal.
Jan 21st:
Opening Read. EARLY EXIT SHORT and slope change
expected at 10:30am
As
stated in yesterday's closing comments, the Primary MUST rise today
regardless of signal weight. A slope change back up is expected
within a few hours of the opening. As the Secondary is still
negatively sloped and cannot turn over today, a slope change on
the Primary will be neutral. The Plus
a Buck strategy made its buck yesterday so that strategy is currently
neutral with no positions.
Jan 20th:
Closing Read
Signal
weight was about as negative as it gets today closing at -2950.
The Primary, currently at -12,368 will begin to want to rise
again. Tomorrow the fast (orange line) will rise regardless
of how negative signal weight is. Hence, any further move
lower tomorrow will be unsustainable and another opportunity to
get short will present itself later in the week or early next.
Jan 20th:
Plus a Buck achieved at 81.44
The
short signal that was issued at 12:30 achieved its Plus a Buck strategy
target of 81.44. SPY continues lower.
Jan 20th:
Enter Short Signal issued for SPY @ 82.44
The
Primary issued the short signal at 1pm. The Primary is at -10,775
which is already extended to the downside. Because of the
extreme low value of the Delineator, one must assess a bit more
than normal risk to this signal. For the Plus a Buck strategy,
a GTC cover short at 81.44 should be entered.
Jan 20th:
Early Enter Short
The
slope change confirmed and an early enter short signal has been
issued which will confirm at 1pm if signal weight remains <-1500.
Jan 20th:
noon
An
early slope change down has been issued which most likely will confirm
at 12:30pm. An early enter short signal is likely within 2
hours.
The
window above is the calculation window that is part of the Delineator
software. This window shows the signal weight required to
generate a slope change on the Primary (left) and the Secondary
(right). Reading both columns show the Primary needs -2980
during the current bar to change slope. On the Secondary,
a closing signal weight of +960 is needed to change its slope. Knowing
what signal weight is required to generate a slope change will allow
you to gauge the strength of the trend of the Delineator.
Jan 20th:
Opening Read
Negative
signal weight this morning will start flattening the Primary. But
it will take several hours of negative weight to turn the Primary
lower. For now, as the trading model is neutral, we just wait.
The value of the Primary is currently -11,088.
Jan 16th:
Closing Read
The
Primary continued higher today, closing at -11,500. We knew
it was impossible for the Primary to change slope back negative
today, hence we would expect to see any move towards the lows on
SPY to resolve back in the direction of the Primary, which describes
today's SPY behavior. The trading model (plus a buck) is neutral
as the current direction is not confirmed by the direction of the
Secondary. The Secondary may be in a position on Tuesday to
change slope which would generate a middle long signal on the Primary.
Readers
should take away from the action this week the notion that if you
focus on predicting the motion of the Delineator first, then apply
that knowledge to the price action, you can set your trades accordingly.
For example: both yesterday and today there were distinct
points in time wherein you could predict absolutely that 1) the slope
of the Primary HAD to change and 2) it was impossible for it to
reverse slope. With this knowledge you can then confidently
trade a direction at that point in time with knowledge that
any counter trend price move would resolve back in the direction
of the Delineator.
These
points in time occur at every slope change. I often refer
to these periods as "balloons underwater". If you
hold a balloon underwater, as soon as you let go, it will pop to
the surface. The deeper the balloon is pushed down, the
greater the distance to the surface, and it won't stop until it gets
there.
Price often behaves like a balloon underwater. Learning
to use the Delineator in this fashion will identify these "set-ups"
a couple of times a month. It's another effective strategy
to use if you learn to identify them as they happen. And typically
these ranges offer 2-5 point potentials. Of course,
you must have the software running on your computer to have access
to the computational windows that determine this information.
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