Thursday, February 02, 2006

SPX Sell signal at close

My system generated a sell signal on SPX at close. Look how the ribbons curled back down below. The CCI briefly went above zero flirted there for a couple of days and now it's back below zero again. My MACD indicator also had a crossdown. All point to a retest failure and what i call as a secondary sell signal. Classic whipsaw action. Reminds me of 10/04/05.

Nasdaq and NYSE MCOs turned back down below zero again, pointing the respective summation indices down. What a difference a day makes ! Yesterday it seemed like a hourly breakout on the DOW, which turned out to be a big fakeout.

Let me make it clear. My job is not to predict the future or provide target projections. It's to identify the trend reversal points and align with it. My system has done a darn good job in identifying the reversals. Here's the daily buy/sell signals for 2006:

1/13/06 - Sell
1/26/06 - Buy
2/2/06 - Sell

Can we get a whipsaw again ? Sure we can. It's not my job to predict the signals from my system. I don't anticipate my signals nor do i double guess it, when i get one. I have paid dearly when i have done that in the past. Right now we have a sell and let's go with the flow, until it reverses.

Wednesday, February 01, 2006

Reverse head & shoulder breakout on the hourly

The daily on the SPX and DOW remains on a buy. We have an interesting pattern in the DOW. Seems like we are breaking out of a reverse Head & Shoulders patters, which means there's another 150-200 points on the upside left before any serious correction kicks in. Above is the hourly chart of the YM (Dow E-mini), which shows the breakout.

Sunday, January 29, 2006

Banging into resistance - Critical Juncture

On 1/26/05, my system generated a buy signal. Yesterday's follow through strengthens the signal. now we are at a critical juncture as far as momentum is concerned. In the above chart, notice the CCI is trying to do a crossover and so is my customized version of MACD indicator. If we see a sizeable selloff on Monday, both the indicators can encounter a backkiss, which will generate secondary sell signals. I am not saying that will happen, but something to keep an eye on this Monday. The Daily trend is bullish and i will go with the flow, for now.