The Big Bamboo was blessed with a gap-up on the indexes, which resulted in the system picking up SDS and QID at a significant discount to Monday’s closing price. Thus, both trades were quickly profitable and never went against the entry for more than 50 cents. I picked up SDS in my personal account, and received a price improvement of one dime over the listed open.
I want to note that I made a mistake in last night’s spreadsheet, when I put in Monday’s low-of-day instead of the closing price of QID. That mistake changed the position size a bit, but not signficantly. The mistake has been corrected in tonight’s sheet.
The above trades will either be stopped out, or sold when RSI(2) closes above 80.
More (Possible) Short Signals
The Big Bamboo is designed to give signals, and then reset. For example, last night, there were more signals than the ones the system purchased. However, the system doesn’t see those pre-existing signals tonight, because it reset, even though the same conditions exist tonight that existed last night.
Through pure accident, BHH set his screens up so that the Big Bamboo signals will arrive without the system resetting nightly. What that means is that the system could be tweaked to take 2 more signals tomorrow, to give it the max 4 positions. To be clear, there are still signals leftover from last night, that were not acted upon, and without the reset, the system would be buying 2 more tomorrow.
Of course we didn’t back test the Big Bamboo to take signals that were leftover from the previous day, assuming the correct conditions still exist the next day. We did run some quick tests this evening, and it really doesn’t change much to get rid of the reset. It actually improves the CAGR, slightly decreases the average trade %, and increases the drawdown by about 1.5%.
As the system is often in cash and should theoretically perform better with more opportunities, it might make sense to take away the reset feature in future versions. For now, I will leave the Big Bamboo the way it is.
For the record, the next 2 signals are to buy SKF and SRS on the open. I am going to purchase one or both of them tomorrow in my personal account, but will not track them in the spreadsheet.
What is the Benefit of The Reset Function?
Simply put, the reset function keeps the system from going all in at exactly the wrong time. Once 2 positions are entered, the conditions that created the edge must disappear, and then setup again in order for more signals to be generated. This helps to ensure that the system does not end up going all in at the onset of a period of sustained strength, or weakness (remember, the Big Bamboo goes both ways).
My intuition is telling me that the markets could be making an attempt to sustain a rally. As the Big Bamboo is only half in, it would be no big deal if the rally does continue, stopping both trades out. However, if the existing positions do not stop out, and the edge re-appears, then and only then will the system go all in with the final 2 positions. In effect, the system will use up to half its cash, then look around and survey the market landscape before deploying the rest of the cash.
BIG BALLS UPDATE:
We’re going higher tomorrow.
lol @ the fly.
Who cares? Its the Wednesday before T-day.
You know the market is gonna be back to crushing bulls/bears alike with some outrageous trickery, by Monday.
Woodshedder!!!
SKF, are you really going long?
Does look like SKF could trade sideways?
I’m waiting for $125 = 200 day, Might not get there though.
I’m watching for a pullback in the morning, then a steady climb throughout the day. That would be enough to get me long again.
http://www.proshares.com/ProSharesLaunches12NewETFs.html
Hey Wood, sometime down the road after they’ve been trading for awhile, you should add some of these, along with the the direxion 3X multipliers.
I smell money.
Crude+Commoditities+Silver move enough as it is,
double down.
All the new leveraged ETFs (including direxion 3x) will be added to the system portfolio once they have sufficient trading history to generate the moving averages the systems use for both price and average volume/liquidity… couple of months.
I smell burning bamboo….
Did somebody just napalm this motherfucker, Col. Kilgore-style?
___________
(hits rewind button on recording machine… whrrrrrr!)
“What is it that comes before the fall…?”
Yeah, I know.
“Summer.”
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Happy Thanksgiving Jakey!
BTW, I’ll be buying more diETFs, tomorrow. If I do not imbibe too much this evening, I’ll get a post up detailing why.
Happy thanksgiving, Shed. I’ve got Richmond bro up here w/ me now in Noo Yawk, eating egregious Key Lime pie. I have no doubt that you will find a truffle soon, but I can’t imagine fighting the respective Feds of the US, China and Europa is a strategy with an “edge” ovah heah. Remember the old short term voting, long term weighing proposition from Uncle Warren in allocating your bamboo knives. Happy to the Shed families.
Power Double Dip strategy giving short signals. I will be taking TWM. This strategy is one tracked in my covestor account.
Wood, I do see the gap on the QQQQ at 26.67 that needs to be filled eventually. But when? We could go to 1000 on the SPX first, correct?
Zombie, the last year should show that indeed, anything is possible.
Sure, the SPX could go to 1000. That is actually a pretty good target, being just above the 50 day and right at resistance. My bet, and what my systems are saying is that there will be a pullback first.
Wooheee getting fried, in this melt up, ovah heah!