Closing Read Aug 28, 2009

Primary Trend=Up

Age of Current cycle= 6 days

1st Target Level=105.53

2nd Target Level=110.80

PM Update Aug 28:  The Secondary lost 25 ticks to -5.8.

AM Update Aug 28:  At the open, signal weight is +1308, the Secondary gaining 39 ticks to +58.  To turn down, signal weight of +120 or less is needed at the close of the day.

PM Update Aug 27:  An hour before the close, the Secondary is once again positively sloped at +22 as signal weight has reversed once again from its earlier strongly negative levels.

AM Update Aug 27:  To turn down, negative signal weight of -140 is needed.  At the open, signal weight is -634 and the Secondary has flipped down losing 61 ticks to -26.  To signal a new down cycle, the Slope must close at -80 or more.

PM Update Aug 26:  The Secondary flipped down for several hours today generating a middle short signal on the Primary.  At the close, signal weight was only -303, the Secondary losing 50 ticks to +35.

AM Update Aug 26:  To turn down today, negative signal weight of -1000 is needed.  At the open, signal weight is -696 and the Secondary is losing 70 ticks to +14.

PM Update Aug 25:  The Secondary gained 11 ticks to +84.

AM Update Aug 25:  To turn down, negative signal weight of -820 is needed.  At the open, the Secondary is gaining 21 ticks to +93.

PM Update Aug 24:  The Secondary lost 35 ticks to +72.  It may be possible for the Secondary to turn down again tomorrow.

AM Update Aug 24:  The Secondary is gaining 16 ticks to +123 at the open.  To turn down, negative signal weight of -1420 is needed.

Aug 28:  Closing Read

Pretty dull all day. The signal continues into Monday.

Aug 28:  2pm

Signal weight weakly negative, the Change +12 again.  Wouldn't be surprised to see them run it up toward the close.  As soon as signal weight turns positive it'll pick up some speed.

Aug 28:  1pm

Signal weight -813, the Change now back negative at -6.

Aug 28:  12pm

Signal weight -249, Change +16.  Quite dull.  Some comments on CIT in the Advanced section.

Aug 28:  11am

Signal weight virtually flat, the Change +35 and the signal still in confirmation.  Pretty dull...signal weight will need to move one direction or another before anything can happen.  The Accumulator's showing some accumulation on SPY thus far today (see Advanced section).

Aug 28:  10:30am

As you can see in the numbers below, weakly negative signal weight has developed extending the duration of the current down cycle.

Aug 28:  10am

Signal weight has moderated and is now weakly positive at +83, the Change +46 and Slope -241.  An exit short signal and slope change up may still happen today signal weight depending.  At the current level of signal weight, it's more than 5 bars away and the Secondary is actually down right now, and to change slope it only needs +120 or less weight...so the short signal is back once again in confirmation.

Aug 28:  Opening Read

At the open, signal weight is +1312, the Change +116 and Slope -237.  An early exit short/early slope change up signal is expected in 2 bars at the current level of signal weight (Slope/Change=# of bars).  A new long signal is expected within a bar or two after the slope change up.

Aug 27:  Closing Read

Signal weight reversed pretty much starting in the bar where the Change crossed zero around noon eastern.  The signal has not yet achieved its target and is still valid.  Positive signal weight tomorrow will end the current down cycle and probably generate a new long as well.

Aug 27:  2:50pm

Signal weight now +378, the Change +95 and the signal is once again out of confirmation with the Secondary as its slope is now positive again.  By the close the value of the Primary should be near zero.

Aug 27:  2:20pm

Signal weight has turned weakly negative at -481, the Change +59.  

Aug 27:  12pm

Signal weight -1727, the Change now only -9.  I'm off to the gym, back around 2:30pm.

Aug 27:  11:40am

Some new charts for you to see in the Advanced section.  No major changes from the prior posting.

Aug 27:  11am

Signal weight now -2070, the Change -41.  The short signal continues.  

Aug 27:  10am

Signal weight has turned strongly negative at -1744, the Change -57 and price is testing the lows of the past week.  That gap from the 21st at 101.22 is a likely target on the downside.

Aug 27:  Opening Read

Signal weight opened moderately negative at -835, the Change -11.7 and the middle short signal is once again in confirmation by the Secondary.  The trading model is still short SPY at 102.68 with a GTC cover at 101.68.  

Aug 26:  Closing Read

Signal weight spent most of the early morning today strongly negative, flipping the Secondary down and generating a middle short signal.  The trading model is short SPY at 102.68 with a GTC cover at 101.68.  However, after about an hour, signal weight moderated moving the Secondary back up and taking the short signal out of confirmation but still an active signal.  At the close, signal weight was mildly negative at -303, the Change now +14.5.

Aug 26:  11am

Signal weight reversed and went weakly positive just after the enter short signal confirmed.  At 11am, signal weight is -45, the Change -29.  The trading model is short SPY at 102.68 with a GTC cover at 101.68.  The signal is out of confirmation as the lesser signal weight has the Secondary remaining up.

This is the last posting for the day until this evening as I have obligations elsewhere today.

Aug 26:  10am  Enter Short Confirmed at SPY 102.68

The middle short signal has confirmed at SPY 102.68.  The trading model is short SPY at 102.68 with a GTC cover at 101.68.  The top of the opening gap on 8/21 is 101.63, the bottom at 101.22 which seem likely downside targets.  If signal weight turns back up above -1000, the short signal will come out of confirmation but will still be active as only a slope change up on the Primary or the profit target being achieved can end the signal.  With the Primary at +12,000, we should expect its value to reach zero at least.

The emailed signal did not go out.  Just after the bar change, signal weight has turned less negative at -750 and the signal is already out of confirmation as the slope of the Secondary is back fractionally positive again.  The short signal however is still active and was valid.

Aug 26:  9:45am   Early Enter Short Signal Issued

Signal weight has moved to -1096, enough to turn the Secondary down and generate an Early Enter Short signal that will confirm at 10am if signal weight is greater than -1000.

Aug 26:  Opening Read

Signal weight opened at -817, the Change -98.  The Secondary will turn down at -1000 and that will generate an early enter short signal on the Primary.  If a short signal is issued, it will be a middle short.

Aug 25:  Closing Read

The Primary got very close to turning back up today but did not quite make it.  An early slope change up was issued at 3pm but it never confirmed.

UPDATE 10AM:  On my way out the door I see that signal weight is now +1897, the Change +43 and Slope -60.  I spoke too soon above...at this rate, we'll get an early slope change in possibly 2 bars and maybe even another long signal.  I'll leave the machines on.

Aug 25:  Opening Read

At the open, signal weight is +1029, the Change +2.  There's no way we can get a slope change back up today as you can quite easily see that with a Change of +2, it will take 66 bars!  If signal weight went to +3500 and stayed there, maybe...but they'd have to find OBL for that to happen.  

I'll recap the day this evening as I must leave for the balance of the day per yesterday's closing read.

Aug 24:  Closing Read

Signal weight closed flat at +54, the Change -53.  The Primary is in a new unconfirmed down cycle that may generate a short signal tomorrow if signal weight is -1400+-.  This would be a middle short signal.  

Notice:  I have obligations that will take me away from the screens for the next two days.  I will be able to post an opening read only and then I'm going to be totally tied up and away from the computer until the early evening pacific time.  I'll be able to recap the day's events then.

Aug 24:  3pm  Exit Long Confirmed at SPY 102.98

The exit long signal has confirmed, the trading model is neutral because the slope of the Secondary is obviously still up.  Depending on signal weight tomorrow, we just may get a middle short signal as it won't take too much negative signal weight to turn the Secondary down.

Aug 24:  2:30pm   Early Exit Long/Early Slope Change Down signal issued

An Early Exit Long signal has been issued that will confirm at 3pm if signal weight is less than +860.  Signal weight is currently +431, the Change -51, Slope -22.  To generate a short signal today, signal weight will need to drop to -1420.

Aug 24:  12pm

Signal weight +1443, the Change -36.  Until signal weight moderates, continue to expect new highs in price.

12:30pm:  I'm off to the gym. Back at 2:30pm.

Aug 24:  11am

Signal weight +1794, the Change -26.  One thing is for sure:  when signal weight finally does moderate, the Change will be larger than -200 and the slope change down will happen fast.

Aug 24:  10:30am

Signal weight now even stronger at +1714, the Change -33.  Back in September/November of 2008, during the middle of the Lehman affair, the Primary got to -18,000 and sat there as signal weight stayed at -2000 for nearly a week.  Only exogenous events have the ability to affect signal weight in this manner and we're certainly seeing this on the flip side today.

Aug 24:  10am

Signal weight continues very strongly positive at +1410, the Change -50.  

Aug 24:  Opening Read

Signal weight opening again strongly positive at +1308, the Change -62.  The value of the Primary is now +11,426 and will approach an over extended level later in the day.  It's unlikely a slope change down can occur until signal weight turns negative.

Exogenous events have the ability to push the Primary and price far beyond levels typically associated with an average cycle on the Primary.  That's part of what makes a market a market.  But while cycle duration and price change magnitude can change, the basic relationship between signal weight and the motion of the Delineator does not.  Until the Primary changes slope, price will resolve in the direction of the Primary.  At some point, signal weight will moderate, the Change will strongly reverse, and a new cycle will emerge.  Our goal is not to predict when this will occur, but rather identify as it does so that we can be ready for the next cycle...and there always is another cycle.

Aug 21:  Closing Read

Signal weight continued to expand all day, ending at +2429, the Change -4.5.  Today's strong move in price and signal weight was obviously generated by exogenous events.  Nonetheless, we can see the Change flatlining for 3 days.  Unless signal weight continues to hold +2000, a slope change down is expected on Monday.

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