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Feb
13: Closing Read
The
Primary changed slope back up today as expected from yesterday.
The Plus a Buck strategy worked if the secondary trade identfied
in Thursday's posts were made, otherwise the Plus a Buck missed by about 10
cents. Both Slopes on the Primary and Secondary are essentially
flat, and we await the next signal next week.
Feb
13: 3:00 SLOPE CHANGE/EXIT SHORT CONFIRMED AT 3PM SPY
83.54
The
slope change/exit short confirmed. HOWEVER, at -780 or more
on the signal weight will turn it back over negative again. So,
it's very flat, but a signal is a signal.
Feb
13: 2:30 SLOPE CHANGE DID NOT CONFIRM
The
slope change/exit short did not confirm at 2:30pm. If signal
weight is less than -540, it will confirm at 3:00. Notice
that now the signal weight can be modestly negative and still get
a slope change.
Feb
13: 2:00 EARLY SLOPE CHANGE /EARLY EXIT
SHORT
An
early slope change/ early exit short signal has been issued at 2:pm
that will confirm at 2:30 if signal weight is greater than -160.
update:
2:21: at this posting the slope is again negative.
2:00
Feb
13: 1:45
Feb
13: 1:00
Signal
weight has turned moderately negative at -904. The Change
also has flipped slightly negative and we can see that unless signal
weight goes back to zero or any positive number, a slope change
is now hours off (because the change is a negative number).
Feb
13: 12:00
Feb
13: 11:30
Feb
13: 11:15
Estimated
time to slope change: (Slope / Change= # of bars) 96/56= 1.7 bars.
More time if signal weight turns negative, less time if signal
weight turns more positive.
Feb
13: 10:30
Signal
weight has turned more positive at +350. We can expect a slope
change on the Primary closing this cycle in 1 hour (Slope/Change
168/76=2.06 bars)
Feb
13: 10:00am
Weakly
negative signal weight of -281 persists thus far. The Primary
wants to rise, evidenced by the strong rise in the Change, hence
a slope change up ending this cycle is expected today.
Feb
13: Opening Read
At
the opening, signal weight is +100 and the Change is +87. With
even low positive signal weight, the Primary will turn back up in
several hours. Stronger positive signal weight will turn it
up faster. Even with strong negative signal weight the Change
will continue to rise.
Feb
12: Closing Read 4:00
Signal
weight in fact rose significantly from -2200 to -500 resulting in
a Change of +63. The Primary has already begun to rise
and barring exogenous events will change slope back up tomorrow.
Feb
12: Closing Read 3:15pm
The
Primary is now at -4508. Near extreme signal weight of -2180
is now only generating a Change of -22. Hence, we can see
that any reduction of negative signal weight will turn the Change
positive and begin to pull the Primary back up. This means
that any further drop in SPY from current levels will be unsustainable
as the Primary will begin to rise.
Today's
short signal is still active. As described in the 11:30am
post below, we did have the opportunity to add to the position.
Additional short sales could easily have been made between
the ranges described and within a few hours, could have traded back
out of those positions precisely as described.
Updated:3:33pm:
just after making the post above, signal weight became less
negative
and hence you can see that the Change has turned positive. This
signal will end tomorrow and (personally) I don't like holding positions
overnight when we might expect a slope change against our position.
Feb
12: 2:15pm
Signal
weight continues to hold at -1500 or more. SPY traded up to
the 82.60-75 area as mentioned in the 11:30 posting, then quickly
traded back to the signal level of 81.95 and as of this writing
has traded to 81.75. The Primary is now at -3575. The
Plus a Buck is still short at 81.95.
Feb
12: 12:30
Signal
weight is less negative at -1300 moving the Change to -9.6.
Feb
12: 12:15
Feb
12: 11:30
Strongly
negative signal weight continues. The +$1 strategy is short
SPY at 81.95 with a GTC cover short in at 80.95. If SPY attempts
to fill the gap opening, or move back to the 82.50-70 area and signal
weight remains strongly negative with the Change at -20
or more, a second short can be can be taken at that time with a
cover target at 81.65.
Feb
12: Enter Short Confirmed at 10:30am
As
predicted using the data, the Enter Short signal confirmed at 10:30am
at SPY 81.95. The Plus a Buck strategy is now short at 81.95 with
a GTC cover short entered at 80.95.
Feb
12: Slope Change Down confirmed, Early Enter Short Signal issued
The
slope change down confirmed at 10am and an early enter short signal
was issued. If signal weight is greater than -980 at 10:30
(likely) the Enter Short will be issued then. This will be
a pure signal because the Secondary is down at the time of the slope
change on the Primary.
Feb
12: Opening Read
Strongly
negative signal weight of -1700 has turned the Secondary down and
the Primary has issued an early slope change down as well. To
confirm the slope change on the Primary, negative signal weight
of -1200 is needed at the end of this bar (10am). If confirmed,
the next signal expected within an hour will be a short signal.
Feb
11: Closing Read
A
slope change (exit short) on the Primary was issued at 3pm. Signal
weight flipped around weakly positive and negative all day. Since
the Secondary is up, although only +6, assuming signal weight remains
positive tomorrow, a long signal will be the next most likely signal.
If signal weight turns negative, we will get a slope change
down and then the next signal would be a short signal. So,
it really could go either way...we don't really care which.
From
the Primary's point of view, it is only 1/2 of the way through the
downcycle that it started on the 9th. So if we do get negative signal
weight, continuing its move to -8000 would be consistent with the
generalized motion of the Primary. At the close today, the
Primary is -832. So this is our mindset going into Thursday.
We know what to expect either way and now we just wait for
the signal to be generated.
Feb
11: 3:15pm
The
Primary changed slope at 1pm at SPY 83.75 today ending the short
signal. The Primary
may issue a long signal today or tomorrow if signal weight remains
positive. For a long signal to be issued, the Slope's value
must be greater than or equal to +80. We could get an early
enter long signal in the last half hour of the day. Enter
or Exit signals can never be issued at the close or the opening
of the day.
Feb
11: 10:00am
Signal
weight remains strongly positive at +1150. I will be gone
for the rest of the day today as I have appointments. The
program will be running and those signed up for the emails will
get any signals that may be generated. These pages will be
updated late in the day today.
Feb
11: Opening Read
Positive
signal weight of +780 has again flipped the Secondary (see above)
back up taking the Primary out of confirmation. The positive
signal weight has also caused the Slope to begin to go back to zero
as evidenced by the Change of +163. If signal weight persists
at these levels, we can expect a slope change up on the Primary
later today in about 2 hours (Slope/Change=# of bars = 677/186=
3.6 bars). Since the Plus a Buck already made its profit target
yesterday, the strategy is flat waiting for another signal.
Feb
10: Closing Read
Extreme
signal weight turned the Secondary over mid-day and this generated
the middle short signal at 84.0 . The Primary now sits at
+1439 and will hit zero at least tomorrow. The middle short
made its Plus a Buck target from the signal price as stated previously
and that strategy is again flat with no positions.
Continuing
in our lessons to learn how to predict the motion of the Primary,
look at the difference between the value of the SLOPE and the CHANGE
in the tables going back to the start of today with respect to signal
weight. Notice how signal weight becomes more and more negative,
the Slope becomes more and more negative, but at the end of the
day the Change starts becoming less negative. The amount of
Change relative to signal weight is something very important to
our ability to predict the motion of the Primary.
At
some point early tomorrow, the Change will turn into a positive
number indicating that the slope is becoming less negative...that
is moving back toward zero. If signal weight were -1340 (roughly
half of the closing signal weight) we could project that the slope
might be very close to zero or even a small positive number. This
is the first step in seeing the process by which the Primary begins
to flatten. While it is still too early to say the Primary
is beginning to turn up, it is the process we need to watch so that
we can identify the next slope change that would be expected in
2-3 days from now.
For
those who have been watching the Delineator Journal for several
weeks, yesterday's slope change and prediction for a down cycle
to begin in SPY should have come to no surprise. Certainly,
the magnitude of the move is surprising and magnitude is something
the Delineator does not predict. The increased volatility
resulted in the middle signal working, since our +$1 target never
changes. Increased volatility makes it easier to achieve our
+$1 profit target.
Feb
10: 2:30pm Plus a Buck makes its buck
As
unlikely as it was, extremely negative signal weight has persisted,
sending SPY to new session lows and achieving the Plus a Buck target
from the middle short signal. The strategy is now flat again
with no position. The last 3 middle signals in a row have
all worked which, historically, is unusual but please, do not read
anything into it. The Primary is now at +3146 down from +8600
yesterday. The last lower range for the Primary was -8100.
The
next update will be after the close by several hours as I have appointments.
Feb
10: 12:30: ENTER SHORT SIGNAL CONFIRMED @ 84.00
A
middle short signal was issued at SPY 84.0 This is a high
risk signal for reasons previously stated. However, assuming
an execution at the 12:30-31 bar, the model is now short SPY at
84.00 with a GTC buy-stop at 83.00 in place.
Feb
10: Noon UPDATE 12:20: EARLY ENTER SHORT SIGNAL ISSUED
This
would be a high risk signal if issued because of the excessive signal
weight needed to keep the Secondary in confirmation.
Signal
weight has turned significantly more negative at -2170. At
-2180 an early enter short signal will be issued. Middle signals
have more risk than pure signals. In this case, the Secondary
could easily turn back up if signal weight simply moves above -2180
which is an extreme level.
Feb
10: 11:30am
Signal
weight has turned more strongly negative at -1588. Today is
a fine example of how slope changes set up reversals in trends.
For learning purposes, we only show the Plus a Buck strategy,
but readers over the past several weeks must have noticed by now
that trades set up by slope changes can quite easily produce gains
in the direction of the Primary.
Feb
10: 10:30am
Signal
weight has turned strongly negative at -1175.
Feb
10: Opening Read
The
Primary turned over yesterday and is currently neutral with respect
to the Plus a Buck strategy. The dots are gray because the
direction of the Primary is not confirmed by the direction of the
Secondary. Signal weight is weakly negative at -380. With
respect to determining the likelihood of the Primary changing slope
back up, until the Change is a positive number, the Primary will
continue lower. A typical Primary cycle lasts 2-4 days and
the typical range for the Primary is +8000 to -8000.
Feb
9: Closing Read
The
Primary turned back over today as it was projected to do on Friday.
The Plus a Buck strategy is currently flat after achieving
its goal on the 6th. As the Secondary is rising, there is
no short signal today accompanying the slope change on the Primary.
Hence, the strategy will remain flat until there is a signal
which could take a day or a week. Even though slope changes
provide many opportunities to trade without confirmation of the
Secondary, none of the conditions that would prompt a trade are
present currently: 1) the Primary was not hyper-extended,
2) no "balloon underwater" scenarios were present either.
While experienced trades can certainly profit from the slope
change today, our focus in these pages does not extend to those
opportunities. Netting 3 points a month using the +$1 strategy
will yield a 30%+ return over the course of a year. Additionally,
using this strategy, you will be out of the market 80% of the time
and not vulnerable to the uncertainties that allow financial commentators
to earn a living.
Feb
9: 2:30pm Exit Long Signal Confirmed...Negative Slope Change
The
Exit Long signal, which is by definition a slope change on the Primary,
has confirmed. The Secondary is still rising needing negative
signal weight of -2260 to turn over today. Since at the time
of the slope change the Secondary is rising, no short signal will
be issued and the dots will turn gray which is a function of the
decision model for the Plus a Buck strategy indicating no new trade.
Feb
9: 2:15pm EARLY SLOPE CHANGE / EARLY EXIT LONG
The
Primary has issued an early exit long / negative slope change that
will confirm at 2:30 if signal weight is less than +720. Notice
that to turn over, signal weight can be modestly positive at +720.
This is an example of how the Primary must go through its
cycles and hence when the Primary is near its positive or negative
extremes, it wants to go the other direction. Since the Secondary
is rising, there will be no short signal.
Feb
9: 12:30
Slope change still at least 1 hour away due to positive
signal weight. (next update at 2:30pm)
Feb
9: 11:00am
Signal
weight has turned modestly positive at +600. Remember,
a slope change isn't a slope change until it actually occurs at
the end of a bar. The more extended the Primary gets from
here, the greater the signal weight is required to keep the Primary
from turning over.
Feb
9: 10:30am
Negative signal weight continues at -502 with the Primary nearing
extended levels at +8510. An early slope change (early exit
long) signal is expected within a couple of bars now.
Feb
9: 10:00am
Modestly
negative signal weight continues at -722 with the Primary nearing
extended levels at +8281. An early slope change (early exit
long) signal is expected within an hour. As the Secondary
is positive, needing -2260 signal weight to turn over, a short signal
is not expected today.
Feb
9: Opening Read
Weakly
negative signal weight of -304 has the Change strongly negative
this morning. The Primary will begin to turn over if signal
weight remains negative. Dividing the Change into the Slope
we get 3.2 bars to the next slope change (456/139=3.2) or about
1.5 hours from the opening.
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