I have two different systems, using two different entry methods, that are both signaling that there should be some weakness ahead over the next several days.
Granted the Bamboo is one of the systems, and over the last 23 trades has only been right 47% of the time. However, over the past 90 trades, since November 15, 2007, it has been right 78% of the time.
The other system, which trades less frequently than the Bamboo, is also calling for a reversal. Since November 15, 2007 it has closed 44 trades and has been right 84% of the time. Over the last 20 closed trades, the system has been right 80% of the time.
The methodolgy behind these systems has been tested on other indexes and maintains the general win/loss percentage across longer time frames. Because the two systems referenced in this post trade the leveraged ETFs, some of which are new, testing over longer time frames is difficult.
Two other systems, the VIX Stretch and the CCI System are close to signaling short entries. Another up day on Monday will likely trigger the VIX stretch short entry. A down day on Monday will likely trigger a CCI short entry.
Yet another system, tested back to 1994 on the SPY, is already short. It has a 60% win rate on short trades.
Truly, last week was very bullish. Many traders have noted that the two 90% up volume days in one week suggest real strength. I will stick to the probabilities. I feel very confident that a reversal is imminent and am positioned for it. My confidence should probably be faded… We’ll see what happens this week.
For a short term reverse to mean you’re probably right.
I think we have a chance for the SPY to sprint to the 50DMA.
For the SPY to reach the 50DMA based on Friday’s closing prices it would have to move ~6.5% more. Definitely possible for it to spring there, but I think it is unlikely to happen without a pullback first.
Well, as always it’s tied to the USD
http://www.bloomberg.com/apps/news?pid=20601087&sid=av3fLR07xdQA&refer=home
Cuervos, what is the latest correlation with SPX and USD?
Indeud. I will continue with my moves last Friday, and grab more FAZcrack.
Indeud.
Thanks Wood. Glad you’re home. Look forward to your insight this coming week.
It’ll be interesting to see how far the triggering indicators&stops can be pushed today. The only one on this end that is not active is the 2/4 cross backbone. CCI/RSI/Aroon is on the field.
this is sick, dow cuts in half and after barely getting above 50% from it’s peak, it’s still a short.
Dow 3000 here we come
Woodshedder Says:
Cuervos, what is the latest correlation with SPX and USD?
Year to Date: -.94
March: -.88
I used UUP as a proxy for the US Peso.
stolen fromtf:
What’s most interesting is that we’re seeing significant strength in the distressed companies that the govt has taken a big stake in: AIG +55%, C +33%, FRE +30%, FNM +30%. There are rumors in the market today suggesting that the government will request delivery of stock certificates held by AIG and other institutions in which it has a major investment, thus preventing short-sellers from borrowing the shares they hold…
If this is all a gubbermint short squeeze the crash is back on very soon.
Interesting scam. Where is tf?
http://www.tickerforum.org/cgi-ticker/akcs-www