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Feb
27: Closing Read
A slope
change was issued at noon and an early enter short at the end of
the day which may or may not confirm on Monday morning. Signals
that are issued at 15:30pm cannot confirm at the close. We'll
need to wait 15 minutes into the opening on Monday to see if the
short confirms.
Feb
27: 12:00pm Slope Change Confirmed
The
Slope change confirmed at noon and unless signal weight turns positive,
a short signal may be issued later in the day. Signal weight,
which started the day strongly negative, has moderated and is only
modestly negative. The slope CAN change back up over
the next few hours IF signal weight turns positive.
I apologize
to readers but this will be the last post today until well after
the close. This has been a very busy week for me and I cannot
stay here at the computer making posts the rest of the day. I
encourage new readers to sign up for the automated emailed signals
and/or sign up for a free 30 day trial of the software to run on
your own computer in real time. Use the link above to do so.
Feb
27: Slope change did not confirm at 11:30, it will confirm
at 12:00 if signal weight is greater than -420.
Feb
27: 11:14am Early Slope Change issued
An early
slope change was issued at 11:14am that will confirm at 11:30 if
signal weight is -1280 or more.
Feb
27: 11am
No
early slope change yet, but if signal weight is -1280 or more this
bar, an early slope change down will be issued. Next bar if signal
weight is only -350, an early slope change will be issued.
Feb
27: 10:30
Negative
signal weight has moderated somewhat to -1000. The opening
gap at SSO 18.14 (SPY 75.70) may get filled this morning prior to
or just after the slope change. If signal weight stays below
-1000, an early slope change down will be issued at 11am.
Feb
27: 10am
With
the Change at -73 and the Slope +97, a slope change down is, depending
on signal weight, expected between 10:30-11am today with a short
signal following shortly thereafter.
Feb
27: Opening Read
Signal
weight at -1543 will turn the Primary over in about an hour (161/100=1.6
bars). A short signal is expected today. It will be a pure
signal because the Secondary is confirming the direction of the
Primary at the time of the slope change down.
Feb
26: Closing Read
The
very strong positive signal weight present early in the day gave
way to weakly negative signal weight. Over the past three
days the Primary has moved from -16,000 to -3300. A slope
change down is possible on Friday and if it happens, a short signal
(pure signal) would be the next signal issued by the Delineator.
Today's failure of price to follow the Primary higher will
set up a test of the lows again on Friday assuming a slope change
down and a short signal are issued. Again, signal weight will
be the key.
Side
Note: If there is strong negative signal weight on the opening
on Friday, a short signal will ensue within a few hours. What
is interesting here is that this short signal will come at the lows
of the market--those initially reached in November 08, and earlier
this week. No doubt the media make a big deal of it. (satire)
Feb
26: 3:00pm
Signal
weight has turned negative and it now seems likely we'll get a slope
change down tomorrow if signal weight remains negative. The
prior post earlier in the day which forecast a retest of the highs
was, at the time, the logical expectation given the level of signal
weight. But as signal weight eroded, so did the odds of a
retest. As there was no signal present at the time, and a
trade in the direction of the Primary which was not confirmed by
the direction of the Secondary, was a speculation.
Feb
26: 2:30
Signal
weight has eroded over the past couple of hours and now stands
at +465, the Change now a negative number at -15. This tells
us that the Primary needs to see expanding signal weight from here
forward or the process of another slope change down will begin.
So far, we have not seen the expected retest of the highs
for the day at SSO 19.34.
Feb
26: 12:15
SSO
traded to 18.90 to the lows of the day and will recover at least
to 19.34 as signal weight has remained strongly positive.
Feb
26: 11:30am
The
Primary continues to rise strongly today supported by signal weight
of +1448 at this posting. Notice that the Change on the period
is +56 and the price of SSO is trading currently near the lows of
the day. We can therefore expect that the price will resolve
back near the highs of the day from where it's trading currently
as long as signal weight remains >=+350.
Why
do we know this? Because the slope of the Primary cannot change
negative this bar or next for sure, and hence we can expect a retest
of the highs of the day on SSO. Experienced traders can use
this type of information to trade within a signal or when there
is no signal as the Delineator offers such traders further insights
to how price may move during the day.
Feb
26: Slope Change up confirmed at 10am
As expected,
the Slope change on the Primary confirmed at 10am. The trading
model is neutral (gray dots) because the Secondary is not confirming
the direction of the Primary.
Recall
the closing comments from yesterday (read below) and notice how
large the Change is this morning relative to signal weight and the
value of the Slope. The +89 read is a strong move in the Change
which projects more strength in the move up in the Primary.
Feb
26: EARLY SLOPE CHANGE UP SIGNAL ISSUED
At the
opening, an Early Slope change up was issued that will confirm if
signal weight is greater than -240. The Secondary cannot turn
up today so no long signal will be issued.
Feb
25: CLOSING READ
Our
data vendor is still working on the issues previously mentioned.
The chart shown below is SSO, which as most readers should
be aware is an ETF that mirrors the S&P.
There
was in fact a slope change down today at 1:30pm as signal weight
remained strongly negative with the exception of a half hour period
at 3:30. A short signal would be the next expected signal,
and this would be a pure signal because the slope of the Secondary
is currently down. For a short to be issued, the Slope will
need to move to -80. So let's examine that and what level
of signal weight would be needed to generate the short.
First
off notice how low the Change is relative to the signal weight (SW).
When slope changes happen, we want to see a condition wherein
the value of the Primary moves quickly and in big steps. When
it does this, counter trend price action more easily resolves back
in the direction of the signal and our trading becomes more effective.
So,
looking at the numbers, we know that the Slope needs to be -80 before
a enter short could be issued. The Slope at the close is -30,
and the Change -12. Adding the two together we get the value
of the Slope for the next bar: -42. If signal weight stays
at -1000, the Change for the next bar would be -12 or less; and
the Slope -54. We can therefore understand that to get a short
signal tomorrow that has some legs, signal weight needs to get excessively
negative to -2000 and even then the Change might only be -24 (twice
the signal weight=twice the Change).
Following
the same example, if signal weight instead went to zero, the Change
would be a positive number and we'd expect a slope change up very
soon.
What
does this imply about the action of the Primary? It says that
it can rise easier than it can fall. And what does this imply
about the Price? Answer: SPY wants to rise.
Feb
25: 10:30
Signal
weight has remained strongly negative and a slope change down will
be triggered in a few hours if weight remains negative. A
short signal would also be generated that will be a pure signal.
I have
to apologize to readers for the fact that, due to the vendor data
issued mentioned below, I cannot run the Delineator automated signals
today and this will be the last posting until after the close.
Feb
25: 10am
Our
data will be out all day as SPY has moved from the AMEX to the NYSE.
I am told it will be at least a day before the history is
merged to the new exchange.
At 10am
strongly negative signal weight of -1890 is continuing. A
slope change down is likely later today with a possible short signal
as well.
Feb
25: Opening Read
There
is a problem with our data vendor today and charts will not be available.
However, the Delineator data is being calculated and it is
shown in the table below.
Signal
weight has started out the day negative at -1175. With the
Slope at +791 and the Change now -145, a slope change down is possible
today.
Feb
24: Closing Read
A strong
move higher in the Primary today as signal weight remained above
+700 within two hours following the slope change at 10:30am. The
key to understanding the move up today as opposed to the move up
that didn't come on the 19th following the slope change that day is
SIGNAL WEIGHT. We know that following a slope change
on the Primary, the price will follow the new direction IF signal
weight is supportive of the slope change. On the 19th, signal
weight started the day positive but then quickly reversed negative.
Today, signal weight started only modestly positive, turned
more strongly positive, then at the 12:30 bar came back from +1100
to +750 as SPY tested the lows of the day at 75.13. At that
point, there was absolutely no way the Primary could have changed
slope. Hence, we knew the price would rise again in the direction
of the Primary, which it did.
This
pattern following a slope change (either up or down) is repeated
over and over and is one of the most powerful signals the Delineator
can provide to experienced traders. And when the slope change
comes following an over extended period in one direction, a reversal
is likely. Hence, as posted in the 10:30am post below "a reasonable
bounce to at least SPY 78 is likely", and SPY's high for the
day was 77.95.
Readers
who have been following these pages for the last several weeks are
encouraged to email in and get a 30 day free trial (including free
data feeds) and start running the Delineator on their computers
in real time. (advertisement)
Feb
24: Slope Change Up / Exit Short signal confirmed at 10:30
The
signal confirmed at 10:30. As the Secondary is negative and cannot
change slope today, there will be no long signal issued by the Primary.
The trading model is neutral. However, as long as signal
weight is at least modestly positive, given the increased level
of VIX and the fact that the Primary is over-extended, a reasonable
bounce to at least SPY 78 is likely.
This
is the last post until early this evening as I have appointments
all day per yesterday's closing note.
Feb
24: Early Slope Change/Early Exit Short Signal issued at 10am
An early
slope change up/exit short signal has been issued at 10am that will
confirm at 10:30 if signal weight remains above -260. Notice
that with negative signal weight the Primary can still turn up.
Feb
24: Opening Comments
Modestly
positive signal weight of +980 at the opening has the Change +164
and the Slope -85. Hence, we can expect a slope change within an
hour if signal weight stays positive and greater than 800.
Feb
23: Closing Comments
The
Primary should have changed slope back up today. However,
exogenous events have created an environment where strongly negative
signal weight persists. There is no question that the Primary
is over-extended on the downside and that any moderation in negative
signal weight will cause the Primary to change slope and spike up.
Experienced traders can trade long when it does change slope
as long as they understand that doing so violates the trading
model built into the Delineator.
NOTE:
I will be gone almost all day tomorrow from an hour after
the opening to well into the afternoon. I will have the program
running and signals will be sent out to those signed up for them.
Otherwise, all comments will be posted after the close.
Feb
23: 3:15
The
Primary is now -16000. It hasn't been this low since the November
lows last year. The trading model is now flat and awaiting
the next signal whenever it comes. The extended decline in
the Primary is solely a result of exogenous events and the pattern
is atypical as mentioned last week. The last time the Primary
was extended down this long, an 11 point move in SPY in the opposite
direction was triggered after the slope on the Primary finally changed.
Feb
23: 2:15
With
SPY making a new low thus far in this cycle of 75.36, the Plus a Buck
strategy finally made its buck. Signal weight continues very
negative and the Primary is still a balloon underwater. It
will take more signal weight than is available to keep the Primary
down. The potential for a big reversal is quite large.
Feb
23: 12:30
Very
strongly negative signal weight continues, the Change still single
digits. The only way the Primary can stay down now is for
increasingly negative signal weight to persist. The next post
will be at approximately 2:30 (off to the gym).
Feb
23: 12pm
Very
strongly negative signal weight has developed (-1906), yet the Change
is only -8.8. The Primary is now a balloon underwater and
moves lower from here on SPY will be as a result of exogenous events
solely.
Feb
23: 11:48
Signal
weight continues to become more negative and at this posting, the
Change has again turned negative.
Feb
23: 11am
Signal
weight has turned more negative bringing into doubt a slope change
today.
Feb
23: 10:45
Signal
weight has turned strongly negative and unless it improves to near
zero, a slope change won't happen until late in the day. This
is now the 9th day of the decline of the Primary. Such an
extended period is unusual and hasn't happened since the period
during the November 2008 lows.
Feb
23: 10:30
Negative
signal weight has pushed out the period for a slope change from
the opening. At the current signal weight, a slope change
is expected now in an hour.
Feb
23: 10:15
After
a half hour signal weight turned modestly negative. The Change
continues positive at +66 and a slope change up on the Primary is
still expected today.
Feb
23: Opening Read
Following
up from Friday's closing post, the Primary will begin to rise regardless
of what happens to price today. The Change rose 14 ticks during
the last half hour on Friday in the presence of extremely strong
negative signal weight. Hence, any move in signal weight to
less negative numbers, or positive numbers, will generate a slope
change on the Primary up today. Since the Secondary is negative
and cannot change slope today, no long signal will be issued.
9:40am:
Signal weight of +930 has the Change jumping by +163 and the Slope
-145. A slope change (exit short) is expected within
an hour.
Feb
20: Closing Read
SPY
came within 3 cents of making its +$1 target during the 3:30 bar.
At that point, signal weight was -2980 yet the Change was
barely negative at -1.78, a key that a bounce was coming. At
the close, notice that signal weight is strongly negative at -2053
and the Change is now positive at +14. Once again, the Primary
wants to rise and it will take ever increasingly negative signal weight
to keep it down on Monday. Any further decline in SPY from
these levels are unsustainable.
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