Monday: The Darkside Emerges
What a way to start to week, breaking Satan’s whipsaw channel of death.
That is just fantastic news–I was getting quite tired of that BS.  However, this is 2007, where nothing fundamental matters, and Larry Kudlow has been up for three days doing green-shoot speedballs.  So it is prudent to not get overly excited to the downside, until we get additional confirmation from the big picture that we are rolling over.
Taking a step back and looking at the daily view, you can see we took out the 5-day low, which is bearish, but there are two bullish points in the way to more downside –> 900 and 881.  Round numbers, especially 900 on the SPX will bea price attractor, and 881 is a strong support level.  If short from 950 area (check), I would cover between 920-881 (check).
System trading is up ~.46% today.
Not sure why no one comments but I appreciate the fine work you’re doing here.
It matters not a whit to the systems I’m developing but your consistent bulls eye commentary is still enjoyed.
Oh, portfolio being tested:
FAZ 15% of portfolio
TNA 31% of portfolio
USO 30% of portfolio
Thanks for the update Danny! Patience should payoff. I agree that the psychology of SPX 900 will be pretty strong to those who feel they missed the past 3 month rally and are waiting for an entry point below 900.
Thanks a lot cuervos, I really do appreciate that.
So are you testing xyz condition on that basket of stocks for a reason, or where the stocks selected by your system in particular for having met some xyz characteristics?
thanks Danny… got a sticky note on the monitor. I still miss your newsletters…so I really appreciate the posts.
Thanks Eddie. I agree. I mean, I have not been shy about sharing my view that the rally is long in tooth, but I do expect a strong bounce there.
When I say long in tooth, let me lift a stat (publicly available) from another blog.
paraphrased of course.
From the top, in 2007, it took us 540 days to hit a low of 666, which was a 42% drop. Since then, to 950, we rallied 42% in 3 months, which is 90 days.
There is no time proportionality there, which to me implies we are still in a bear market. Stocks take the stairs up and the elevator down, EXCEPT in bear markets when everyone mfer crams into the elevator and smashes it up 50 floors, then back down, real fast.
thanks Jingle. I am really glad that people liked the NL bc I spent a lot of time on it, so while short-lived, it was very rewarding
@Danny – I’m testing out a portfolio system to go with DeuceySPY.
I was using FAS but the underlying fundamentals of that ETF caused it’s correlation to unhinge from time to time. TNA is a good fit and there is a nice strong positive correlation with USO.
Right now – The FAZ setting is a bit under review. I think it’s share in a portfolio will depend on it’s relation to a DMA. I haven’t found the best one yet. Last Friday it was 4%, today more obviously.