Thursday, March 30, 2006

Buy/Sell signals from my system this year on SPX

I have had eight buy/sell signals from my system this year, which i have been posting on this blog. These buy/sell signals are generated at the end of the trading day. So far no failures. Failure happens if the price takes out the prior swing low on the daily charts after the signal is generated. So far among all the signals generated this year, in none of the instances has the price taken out even the prior day's low, after the momentum buy/sell was generated. This year has been atypical in that too many signals have been generated, given the narrow range we have been bouncing around in.

The following are signals this year and the maximum points that each signal would have potentially generated, which is shown in the parenthesis. Note that the maximum points does not necessarily mean that a trade would have made that many points. The number points a trade would have made is entirely dependent on the trade management, such as how many times one enters and exits within the context of a signal, how one trails the stops etc. So the number points made can be either less or more than the maximum potentail shown below, based on how one manages his/her trade.

Jan 13 - Sell ( 28 points )
Jan 26 - Buy ( 14 points )
Feb 2 - Sell ( 17 points )
Feb 14 - Buy ( 22 points )
March 2 - Sell ( 21 points )
March 14 - Buy ( 13 points )
March 22 - Sell ( 13 points )
March 29 - Buy (In progress...)

Avg 18 points per signal

Wednesday, March 29, 2006

SPX buy signal at close - Terminal move ?

My system went to a buy signal at close today, having been short since 3/21/06. I will keep the comments short today. A picture is worth thousand words. After a long time a clear e-wave count seems to be emerging. SPX appears to be forming an ending diagonal here.

Tuesday, March 28, 2006

Will the support hold ?

On March 21 i wrote,

The price trend as evidenced by EMAs is still up without a question. But the momentum went to a sell today. When this happens we typically go down and test the rising EMAs. Remember we had gotten far above the rising EMAs. So some correction was required to bring the prices back to mother earth. I think the brutal selloff we saw on SPX was a wave A selloff. We should see another wave B up and another wave C down to about 1290-1295 region before the uptrend resumes.

Today the wave C tested the 1290 dynamic support. Little did i know last week that it would take so long to test this region. My system remains on a daily sell signal from March 21. My guess is we will get a momentum thrust tommorow, which should issue a buy signal on the daily. I bought some April ES calls around 1301 in anticipation of that. I don't like front running my signals, but sometimes when the risk/reward is too good, i take it.

The larger question for tommorow is, will the SPX 1290 support hold ?