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May
29: Closing Read TRADING MODEL ACHIEVES
PROFIT TARGET.
Today's
long signal achieved its profit target of 92.21 during the final
half hour of trading today. Very strong positive signal weight
obviously kicked just before 3:30, rising to +1729 from +800 an
hour earlier, the Change closing at +36. I cannot remember
three signals (much less three successful signals) in the same week.
But, it is what it is and users are always challenged to match
the performance of the Delineator trading model. In the end,
it all comes down to discipline. As Jerry often says, "over-thinking
a signal is the greatest risk to performance". True enough.
May
29: 1pm
Signal
weight remains moderately strong at +831, the Change -0.27. The
trading model is long SPY at 91.31 with a GTC exit at 92.21. I
must admit to everyone that I thought two good signals in a shortened
week was enough for me so I didn't take it and instead I am off
to the 1st tee. I'll post closing comments around 5pm pacific.
For
those readers/users whose trial ends today, following the trading
model netted 6.44 points (annualize that) going "by the book"
for the month of May (not counting the current signal which isn't
over). Considering the number of hours actually at risk
during the month, the risk adjusted rate of return is obviously higher.
Just send me an email.
May
29: 12:15am
Signal
weight now +746, the Change -1.03, the Secondary back up and the
signal back in confirmation.
May
29: 11:30am
Several
users have written in commenting on the fact that the Change number
was very weak (+21) at the time of the enter signal. A half
hour later, signal weight has moderated to +723 and the Change is
now -6.1. While not quite a Newman, a weak Change adds risk.
But a signal is a signal and the trading model is long per
the previous post.
update
11:38am: Signal weight has now dropped below +640 bringing the
Secondary out of confirmation with the signal. This is not
an exit signal. An exit long signal can only be generated
by a slope change down.
May
29: 11am Enter Long Signal confirmed at SPY 91.31
The
Enter Long signal confirmed at 11am and the trading model is long
SPY at 91.31 with a GTC exit at 92.21 (plus 1%). Signal weight
is strongly positive at +1224, the Change +21.
May
29: 10:30am Early Enter Long signal triggered
An Early
Enter Long signal has been issued on the Primary that will confirm
at 11am IF signal weight is greater than +950. The SCP on
the email shows "Low" because the weight difference between
where weight is now vs what it needs to be is 380. This value
can be set on your software by using the Deln Settings, SCP. SCP
stands for signal confirmation probability. Of course users
will be watching their STATS window and current signal weight to
determine for themselves whether the signal will confirm or not
at 10:50+-.
Signal
weight is strongly positive at +1305 and the Change +27.
May
29: 10am
Signal
weight is modestly positive at +772, the Change only +6, the value
of the Primary +5430. It would take a great deal of signal
weight to push this much higher...somewhere in the +2000 range to
get the Change going. Looking at the STATS window we can see
that to get to near +80 (to generate a long signal) weight would
need to be greater than +1540.
NOTE:
These shortened weeks make me tired quickly, so I must play
golf today to recover. My last post will be around 1pm today.
May
29: Opening Read
An Exit
Short / Slope Change up signal was issued just after the opening,
that if it holds to 9:45 will confirm at that time. To confirm,
signal weight needs only to be greater than -40, which it is. The
Secondary turns up again today with signal weight of +640 or more
making a long signal possible later this morning. The email
the system sent out used 91.41 as the exit price.
May
28: Closing Read
Today's
mostly strong positive signal weight will reduce the amount of weight
needed tomorrow to turn the Secondary up and possibly confirm a
long signal if signal weight remains positive. This
shortened trading week certainly hasn't reduced our profit potential
as the Primary has issued long and short signals, both of which
made their profit targets. Tomorrow, if signal weight is greater
than +560 at the opening, then the slope change / exit signal will
confirm, otherwise we might see a continuation of the downcycle.
May
28: 3:30pm
Signal
weight dipped back to +1067 and the exit signal did not confirm.
May
28: 3pm Early Exit Short / Early Slope Change
up signal issued
Per
the previous post, an Early Exit Short signal has been issued. Remember,
an exit signal is a slope change and a slope change ends the current
cycle and begins the new one. Since the trading model already
achieved its profit target and is flat, no exit preparations are
needed. HOWEVER, if the target hadn't been achieved, then
the early exit is your warning signal that at the actual slope change
you would exit your position.
For
this signal to be confirmed, signal weight of +1080 is needed per
the Stats window on the software. At the time of the early
exit signal, the signal weight was +1222 and the SCP (signal confirmation
probability) was very low. The reason being that there was
only a 142 weight difference between the current weight and that
needed for confirmation. If the signal isn't confirmed at
3:30pm it cannot be confirmed until tomorrow because no signal can
confirm at the close or the opening of the day.
May
28: 2:45pm
With
signal weight now at +1200, the Change +44 and the Slope -32, we
can easily predict an early exit short / early slope change up to
be triggered at 3pm. If signal weight rises to +1560 or more
by the close, an early enter long signal may also be issued a half
hour late because at +1560 the Secondary turns up.
May
28: 2:20pm
Signal
weight remains moderately positive at +970, the Change +39, Slope
-86. An early exit short/early slope change signal is expected
in 2.2 bars.
May
28: 12pm
Signal
weight modestly positive at +819, the Change +39. Possible
early exit short/positive slope change in 4 bars (2 hours). Since
the trading model is already flat, the exit signal simply ends the
cycle. For new readers, trading from Enter to Exit is NOT
an acceptable strategy (read Manual).
May
28: 11am
Signal
weight at +104, the Change +11. For the Primary to turn back
up today, very strongly positive signal weight is needed. Otherwise,
we can expect the down cycle to continue for the next day or two
freeing our time up to do other things especially after another
week of two more successful signals.
May
28: 10:30am
Signal
weight remains moderately negative at -652, the Change -27 and the
downcycle of the Primary continues. The trading model achieved
its profit target last bar and is now flat. This morning's
early up move in Price that then reversed back in the direction
of the Primary is very typical. This is why it is so important
to pay more attention to the Primary and the amount of signal weight
needed to turn it. Following this discipline will prevent
making emotional decisions based upon price action (which is typically
wrong) especially when we know it will take hours before any
slope change can occur.
May
28: 10:08am TRADING MODEL ACHIEVES PROFIT TARGET
OF SPY 89.50
The
trading model just achieved its profit target of SPY 89.50. The
trading model is now flat.
May
28: 10am
A slope
change isn't a slope change until it's a slope change. We
don't watch price, we watch signal weight and the time needed before
a slope change can occur. Counter trend price motions, especially
early in a cycle, resolve back in the direction of the Primary.
While signal weight was strong enough for a time during
the last bar to turn the Secondary back up, taking the signal out
of confirmation for a few minutes, it has reversed again and is
now only +81, the Change +16. An early exit short / slope
change up signal is much less likely now.
May
28: Opening Read
The
trading model is still short SPY at 90.40 with a GTC cover at 89.50
(89.53 was the low yesterday). At the opening, signal weight
is strongly positive at +1422, the Change +77. Following our
discipline, a slope change/early exit short signal may be generated
in 2.85 bars (Slope/Change=# of bars).
May
27: Closing Read
An exit
long signal was triggered and confirmed at 2:30pm at 90.36. As
strongly negative signal weight was present enough to turn the Secondary
back down (only -20 was needed) a short signal was confirmed at
3pm at SPY 90.40. The trading model is short SPY at 90.40
with a GTC cover at 89.50. The low for the day following the
signal was 89.53. With the Secondary flipping around because
of low signal weight needed to turn it, both long and short signals
are being generated this week.
No short
signal was sent via email due to a system crash that locked up my
machine at 2:30pm. Those running the software saw the signal
come in on their programs.
May
27: 10am: TRADING MODEL PROFIT TARGET ACHIEVED
Signal
weight has turned weakly positive, essentially flat--as is the Secondary.
The trading model just achieved its profit target of 91.68
as SPY traded to 91.75. The trading model is now flat. Unless
signal weight turns more strongly positive, a slope change down
on the Primary will be triggered sometime late this morning or early
afternoon (Slope/Change=# of bars: 376/79=4.7)
NOTE:
I have business away all day. This is the last posting
until well after the close. Those readers to these pages whose
access ends on May 30th should strongly consider getting a software
trial so they can run the program in real time on their own computers.
Just drop me an email.
May
27: Opening Read
Weakly
negative signal weight of -411 has the Change -132 and the Slope
+426.
May
26: Closing Read
Extremely
strong positive signal weight turned the Secondary up this morning
generating a middle long signal at SPY 90.78 with an exit at 91.68.
The trading model is still long as the high for SPY after
the signal has been 91.58. With closing signal weight of +2393
and the Change only +12, we know that it will take even stronger
signal weight tomorrow to keep the Change positive, otherwise it
will turn strongly negative and the process of the next slope change
will begin.
NOTE:
For those in this signal who may still be long, if SPY trades
to the target level during after hours trading, be sure to get an
exit as you will need to enter an after hours trade depending on
your broker's requirements.
May
26: 3pm
Signal
weight of +2327 has nearly exhausted the Change now at +14.28. Any
moderation in signal weight will turn the Change negative. So
far the high in SPY has been 91.56.
May
26: 2pm
Signal
weight gaining more to +2352, the Change +27. SPY making new
highs on the day.
May
26: 1pm
Signal
weight rising to +2246, the Change +36. Model long at 90.78
with exit at 91.68.
May
26: 12:30pm
If you
hit your ReCalc button on your Stats window, you'll see that there's
no XSlope showing. So we know a slope change down today on
the Primary is very unlikely even if signal weight reversed again
and went to the opposite extreme. So, per our pre-opening
comments, the seemingly less likely scenario is unfolding. So
be it and the model is long at 90.78 with an exit at 91.68.
From
the model's point of view, there is only the signal. There
are no bullish or bearish scenarios, there's no baggage from the
previous trade to carry along. It is what it is (hat
tip Jerry).
Now,
on the subject of secondary trades after a signal. This only
occurs after an initial slope change. So, while
a counter trend move in price today may resolve back in the direction
of the Primary (and this would be our expectation), this signal
does not come after an initial slope change. Hence, purely
from the discipline point of view, secondary trades would not be
advisable.
May
26: 12:00pm
Signal
weight is extremely strongly positive at +2116, the Change +48.
The trading model is long the middle signal at SPY 90.78 with
a GTC exit at 91.68.
May
26: 11:30 DUAL SIGNAL...EARLY ENTER/ ENTER LONG
CONFIRMED AT 11:30 AT SPY 90.78
At 11:21am
signal weight rose to +1940 triggering an early enter long signal
that confirmed at 11:30am at SPY 90.78. The trading model
is long SPY at 90.78 with a GTC exit sell at 91.68. If signal
weight moves below +1940, the signal will come out of confirmation
but will still be valid until 1) the signal achieves its profit
target, 2) an exit long signal is issue.
May
26: 11am
Signal
weight has grown even stronger at +1866, very close to the +1940
needed to turn the Secondary up and generate a middle long signal.
The Change is +56. If signal weight were to achieve
+1940 and generate a middle long signal, the big risk is that signal
weight could easily dip back below +1940 and take the signal out
of confirmation. +1940 is nearly extremely positive signal
weight and difficult to maintain for more than several hours. But
a signal is a signal and the trading model will take it and you
will need to make up your own mind.
May
26: 10:30am
Signal
weight remains strongly positive at +1518, the Change +49. This
morning's reversal in signal weight was due solely to exogenous
events. Part of the discipline of the Delineator is to
always know what level of signal weight is needed to move the Primary
in one direction or another. This leads to an understanding
of the motion of the Primary and sets our trading disciplines. We
know there will be many moves in price that relate to randomness.
We also know that when the Primary changes slope and is supported
by a strong Change, randomness gives way to certainty and that's
the time we want to focus our trading.
May
26: 10:00am
Signal
weight has turned moderately positive at +731, Slope +91 and the Change
+19. No slope change unless signal weight turns negative again,
otherwise the Primary continues to rise and with the Secondary down,
no long signal can be issued.
Update
10:10am: Exogenous events have turned signal weight strongly
positive at +1182, the Change +42 and the Slope +115. For
the Secondary to turn up and generate a middle long signal, positive
signal weight of +1940 is needed. The trading model is neutral.
May
26: Opening Read
Moderately
negative signal weight at the opening of -805 has the Change -59
and the Slope +28. An early slope change down is possible
this bar with signal weight of -1380, otherwise an early slope change
down is very likely at 10am which should be obvious to all users.
A short signal will follow after the slope change within 1 or
1.5 hours depending on the level of signal weight.
Update
9:50am: Signal weight has flattened at -73, the Slope +65
and the Change -22. The expected slope change next bar won't
happen unless signal weight turns moderately negative again.
May
26: PreOpening: Any negative signal weight Tuesday
will turn the Primary back down and generate another short signal.
With the value of the Primary +1288, down from -11,000, a
two stage down cycle would be the expectation with the Primary changing
slope again at -10,000+-. Conversely, if strong positive signal
weight is present, no long signal would be triggered unless signal
weight were greater than +2120 as it would take that much to turn
the Secondary up. So our bias would be a two staged down cycle
because the Secondary is down. Always trade in the direction
of the Secondary.
May
22: Closing Read
May
22: 2:30pm Exit Short Signal Confirmed at SPY 89.67
The
short signal did not achieve its profit target (missed by 8 cents)
and was covered out at 2:30pm at SPY 89.67 when the exit short signal
confirmed for a loss of .59 cents . The
last loss by the model came on March 20th (see Archive Section). The
trading model is now neutral. No long signal can be generated
because the Secondary is down and will only confirm short signals.
For
the week, 1 winner-1 loser. Have a nice long weekend...I'm
outta here!
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