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June
5: Closing Read
The
up cycle on the Primary that began yesterday ended today at 3pm
at SPY 94.34. Today's opening gap provided the opportunity
for the trading model to achieve its profit target. For the
week, one loser/one winner. Next week will provide more opportunities
probably on both sides as the Secondary will continue to flip around potentially
confirming both long and short signals.
June
5: 1pm
I'm
off to the 1st tee to play in the rain (yes, rain in Santa Barbara!).
Have a great weekend. I'll update the site this evening.
June
5: 12pm
No significant
changes from the previous posting. Signal weight is +385,
the Change -13.
June
5: 11am
Signal
weight is now weakly positive at +386, the Change -16 and the Slope
+142. Any slope change potential today is (as always) a function
of signal weight. With the Change already a negative number,
strong positive signal weight is needed to keep the current up cycle
on the Primary intact. Everything else being equal, price
will resolve in the direction of the Delineators. The trading
model is flat having achieved its target at the opening.
June
5: 10:30am
Signal
weight reversed and is now -659, the Change -75, the Slope +130.
An early slope change down / exit long signal is expected
in 1.7 bars at the current level of weight. Negative signal
weight of -1140 is needed to turn the Secondary down which is certainly
possible today. Depending on weight, we could see another
short signal later in the day...maybe you shouldn't take the day
off.
June
5: 10am
The
strong positive signal weight at the opening has quickly faded and
now sits at +352, the Change -34. The trading model is flat
having achieved its profit target at the opening. Users are
encouraged to take the day off and await the next signal next week.
A word
on opening gaps: Whenever a pre-opening gap provides an opportunity
to take an extra level of profit, always do so. Holding
out for more will typically get you less. However,
the opposite does not apply. When a pre-opening gap down against
a position occurs, do not rush to take a loss thinking it will get
worse. Price will resolve back in the direction of the Primary.
June
5: Opening Read Trading Model Profit target achieved
at SPY 95.48 on opening
Today's
opening gap higher above the target price allowed for a bit higher
profit. Regardless of whether a user traded pre-opening or
not, the opening tick was 95.48 which would have triggered any GTC's
at lower levels. Signal weight is strongly positive at +1143,
the Change negative at -0.79.
June
5: Pre-Opening
SPY
is trading pre-opening at 95.85 which is .45 cents above the profit
target. The trading model will execute pre-opening at 95.85
at 9:12am and is flat. (a bird in hand is worth two in the
bush).
June
4: Closing Read
Yesterday's
middle short signal ended today at 1:30pm with a -1.34 point loss.
Could this loss have been avoided? Maybe, but probably
more gains in the process would also have been avoided since this
year the majority of middle signals have generated profits. The
willingness to accept a loss really puts you in a position to achieve
a gain. Putting yourself at risk is what it is all about because
the return on risk is a capital gain. And what matters from
a discipline point of view is to trade and make decisions consistently
and put previous experiences out of your mind. Being able
to match the trading model's return is all I am trying to do, and
if you're using the model this should be your goal as well. This
means working "by the book". In my mind, taking
a loss by following the decision model is as much a success as taking
a profit by following the same means. They are both positive
experiences regardless of the economic consequences. We don't
gloat when we take a profit, we don't whine when we take a loss.
Discipline has only a single level of compliance.
At the
close, signal weight was strongly positive at +1950, the Change
+49. The model is long SPY at 94.50 with a GTC exit at 95.40.
June
4: 3pm
Signal
weight remains strongly positive at +1709, the Change +45. The
trading model is long SPY at 94.50 with a GTC exit at 95.40.
June
4: 2:30pm Multiple Signals during the last hour
An early
exit short was issued during the 1:30pm bar that confirmed at 1:30
at SPY 94.35. Almost immediately thereafter, an early enter
long signal was also issued that crashed my email system. The
early enter long confirmed at 2pm at SPY 94.50. The trading
model took a -1.34 point loss on the middle short signal and is now
long the pure signal at SPY 94.50 with a GTC exit at 95.40.
Signal
weight is very strongly positive at +1869, the Change +63 and the
value of the Primary is 1378.
June
4: 12:30pm
Signal
weight remains strongly positive at +1182, the Change +78 and the
Slope -87. +2940 signal weight is needed to generate an early
exit short signal this bar which is unlikely. However, an early
exit short / early slope change up signal is expected next bar at
1pm with a possible confirmation at 1:30pm.
NOTE:
I'll be out until 2:30pm (gym time).
June
4: 12:00pm
Signal
weight remains strongly positive at +1125, the Change +88 and the
Slope -169. An early exit short signal is expected in 1.92
bars at the current level of signal weight.
June
4: 11am
Signal
weight has turned strongly positive at +1199, the Change +122, Slope
-365. An early exit short / early slope change up signal is
expected in 3 bars (Slope/Change=# of bars).
June
4: 10:30am
Signal
weight turned weakly negative for a few minutes last bar bringing
the signal back into confirmation. But by the close of the
bar weight had again turned weakly positive at +520, the Change
+105. The value of the Primary is now +1705 and will be near
zero in 2 hours. An early slope change / early exit short
signal is expected in 5 bars given the current level of signal weight.
June
4: 10:10am
Signal
weight is now +25 which has turned the Secondary back down and brought
the signal back into confirmation.
June
4: 10am
Signal
weight is weakly positive at +450, the Change +115. To turn
back down and bring the middle short signal back into confirmation,
signal weight needs to be +180. The signal continues.
June
4: Opening Read
Following
from last night's posting, we can easily see the rapid increase
in the Change from a small reading of signal weight. With
the slope -735 and now rising by +138, we can project an early exit
short / early slope change in 5.3 bars at the current level of signal
weight. The trading model is short yesterday's middle signal
at 93.01 with a gtc cover at 92.11.
June
3: Closing Read
Extremely
strong negative signal weight persisted most of the day. During
the 1:30 bar, signal weight exceeded -2200 turning the Secondary
down and triggering a middle short signal that confirmed at 1:30
at SPY 93.02. The trading model is short SPY at that price
with a GTC cover at 92.12. Within a bar of the signal, the
Secondary turned up again taking the signal out of confirmation
as signal weight rose above -2200. This is the main risk as
described earlier today. But a signal is a signal and the
trading model is now short as described above.
At the
close, negative signal weight of -1942 has the Change +8.5--so already
the Slope has achieved its negative extreme and the process of another
slope change has begun. Tomorrow, as users should know given
the numbers, the Change will want to rise quickly while the Primary
will be declining by 800 ticks for the first few bars. A slope
change up would be the logical next signal expectation with another
long signal likely as well.
June
3: 10:30am
Signal
weight continues to become more negative at -1993 and is close to
-2200 needed to generate a middle short signal. FYI: 92.37
is the bottom of the opening gap from 6/1, the top is 93.45 near
the low of the day. If a short signal is generated and subsequently
signal weight rises above -2200, while the signal will be out of
confirmation, the signal still is valid until it either makes its
target or an exit signal is issued (whichever comes first). Moving
out of confirmation is not an exit position signal.
NOTE:
I have business out today so this is the last posting until
after the close. The email system will be on and should send
out any signals (maybe...btw, the new version has fixed this).
June
3: 10am
Signal
weight has turned more strongly negative at -1948, the Change -120.
Signal weight may get to -2200, if it does it will generate
a middle short.
June
3: Opening Read
Negative
signal weight of -1511 has the Change -120, the Slope -242. The
downcycle continues. It is doubtful that the Secondary will
turn down today as it needs -2200 signal weight to do so. If
it did, it would generate a middle short signal.
June
2: Closing Read
We knew
from yesterday that we would see a slope change down on the Primary
today. With the exception of the first bar of the day, signal
weight remained positive all day closing at +759, the Change +8.
The condition of signal weight and the Change number is similar at
the close today to what it was yesterday. We know that
the Primary cannot rise much even if signal weight turns strongly
positive. By understanding the motion of the Primary we know
how price will tend to behave. Given the slope change down
today and the extended value of the Primary, the low Change value
with positive signal weight; our expectation would continue to be
a downside move within the current down cycle of the Primary.
I've
received emails from a few users today about the Balloon scenario
so I thought I'd review a few points. 1)The opportunity for
a balloon scenario occurs only after an initial slope change, within
3-4 bars following the change. 2) The Change number must be
a large number, 3) signal weight must be at least moderately supporting
the direction of the Primary and 4)price must move counter to the
direction of the Primary. Today, we had 1,2 & 4 supporting
the scenario, but 3-signal weight- was not present..hence no opportunity.
If all these factors are present, there's a trade--
If not, none.
June
2: 3:15pm
Signal
weight remains positive at +961, the Change only 0.33. The
old saying "never short a dull market" seems to apply
today with the positive signal weight showing. Nothing to
do but wait.
June
2: 2pm
Signal
weight has turned moderately positive at +777, the Change now only
-11. There was no balloon today because signal weight was
NOT negative following the slope change. With the Change now
only -11, a few bars and it will turn positive.
June
2: 1pm
Signal
weight has again turned weakly positive at +382, the Change -38
and the Slope -95. Thus far, until signal weight turns more
negative, there's no balloon. Also, I want to STRESS that
such a trade is OUTSIDE of the trading model. We know that
trading against Secondary creates more risk. The trading model
is neutral because the Secondary is up and cannot confirm a short
signal.
If you
are following the model, you should be doing other things right
now and wait until it is more likely that you will be getting a
pure signal...like in two days. Sitting and watching price
action does nothing but put noise in your brain. The true
value of the Delineator model is that it focuses your time when
a trade is likely. Out of a 5 day week, you should spend no
more than 6-8 hours of your valuable time watching the market. This
is why I stress the importance of being able to predict the motion
of the Primary so that you know when you need to be around.
June
2: 12:30pm Exit Long / Slope Change down signal confirmed
at SPY 94.45
Signal
weight closed the previous bar at +207 and hence the signal confirmed.
Since the trading model was already flat, no action is needed
there. For the Lead Balloon scenario to unfold (read previous
entry) we 1) moderately negative signal weight, 2) Slope must be
-80 or more, 3) after 1 and 2 are met, price must rise back near
the highs to at least 95.
Another
way to trade outside of the model is to click the "trade without
secondary" button on your Trade Window. This will enable
you to trade via the model without confirmation of the Secondary.
The same rules however apply as to when a signal is generated.
The most important factor being the value of the Slope (DELN).
It must close a bar at -80 or more to confirm a short signal.
Then simply trade using the same plus a percent discipline.
UPDATE:
The Balloon trades are NOT PART of the disciplined trading
model. A short today will go against the direction of the
Secondary. As signal weight remains positive, a balloon scenario
is so far NOT unfolding.
June
2: 12pm EARLY EXIT LONG / EARLY SLOPE CHANGE DOWN SIGNAL
ISSUED
An early
exit long / early slope change down signal has been issued that
will confirm at 12:30pm IF signal weight is +300 OR LESS. The
Lead Balloon scenario exists IF signal weight turns moderately negative
(-600+-) AFTER the slope change has confirmed. Any rise in
price near the highs in the 95.00 area AFTER THE SLOPE CHANGE are
shortable with a cover at the lows of the day or some other level
you're comfortable with. The top of the gap at 93.60 would
be such a level. HOWEVER, signal weight must be moderately
negative during this period.
June
2: 11:30am
Positive
weight now +447, the Slope +67 and Change -62. Checking your
stats window you see that negative signal weight of -900 is needed
this bar to trigger a slope change down. Otherwise, we can
expect an early slope change / exit long signal next bar.
June
2: 11am
More
of the same...early slope change still around 2 bars away.
June
2: 10:30am
Signal
weight moderately positive at +617, the Change -72. An early
slope change down is still almost 3 bars away at the current level
of signal weight. The value of the Primary is now +12,992.
June
2: 10am
Signal
weight has moderated to weakly positive at +91, the Change
-109 and Slope +248. An early exit long / slope change down
now in 2.2 bars (Slope/Change=# of bars).
June
2: Opening Read
Pre-opening
comment: The potential exists for a quite large lead balloon.
We know that when the Primary is fully extended and no amount
of signal weight can keep the Change from reversing, any further
move in price is always unsustainable within the current cycle.
This potential exists today. If, for example signal
weight were simply zero, with the Change already at -7 at the previous
signal weight of +2461, at zero the Change would be a very large
negative number (-150+-) indeed! This high negative number
will decrease the Slope by that amount each bar. Hence, in
this scenario, we can expect a slope change down within about an
hour and a half. If price were to continue to rise and the
slope change then occurs, a very large reversal down in price will
follow. These are the ingredients we need to watch for in
today's early trading.
At the
opening, negative signal weight of -781 has the Change -171, the
Slope +321. An early slope change down / early exit long signal
is expected in 1.88 bars.
June
1: Closing Read
Extremely
strong positive signal weight persisted all day. The trading
model was flat having already achieved its target on Friday. At
the close, signal weight was +2496 and the Change now a negative
number at -6. We know that with any moderation in signal weight,
the Change will turn strongly negative and a slope change down ending
the cycle on the Primary will occur rather quickly thereafter. Hence,
any move higher in price will be unsustainable in the current cycle,
especially now since the Primary is over-extended at +12,176.
June
1: 2:40pm
Signal
weight continues extremely strongly positive at +2600, the Change
now only +2.4 and the value of the Primary is now +11,186. Any
moderation in signal weight will turn the Change strongly negative
hence, any move higher will be unsustainable in the current cycle.
With the Slope +512 the Primary will continue to rise for
several more bars even in the face of strongly negative signal weight.
June
1: 12pm
Signal
weight holding at +2638, the Change +30. No changes from the
last posting. When the Change reaches near zero, it will take
ever increasing amounts of signal weight to keep the Change a positive
number. When it turns negative, the process of the next slope
change will begin.
June
1: 11am
Signal
weight remains extremely strongly positive at +2591, the Change
+49. As long as signal weight remains this strongly positive,
the Change will take a long time to move to zero. The last
high on the Primary was at +11,200 and is currently +7828 rising
by +378 ticks per bar. Not much to do here but watch as the
trading model is already flat.
June
1: 10am
Signal
weight is extremely strongly positive at +2367, the Change +62.
A nice opening gap exists at 92.40-93.67 obviously caused
by exogenous events. With signal weight and the Change this
strong, any attempt in the next hour to move toward the lows of
the day will resolve back up and may be tradable if that range is
sufficient. Otherwise, a series of stacked expansion bars
up while signal weight is greater than +2000 should be expected.
The value of the Primary is +7109 which is not extended.
June
1: Opening Read
Signal
weight is very strongly positive at +1808, the Change +40 and the
value of the Primary is now +6811. The trading model is neutral
having achieved its profit target on the current up cycle on Friday.
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.
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