The Important Matter of Surge Protection

There is some important information at the conclusion of this piece for anyone running HDMI from their cable box or satellite receiver…

My life is a swirling storm of busy-busy go-go right now. We have Little League playoffs and the neighborhood pool opening and my full-time is twice as busy this time of year. So when my 10 year old woke me up this morning, early, and said, “Daddy, the TV won’t turn on,” I knew that life was fixin’ to deliver a death blow straight to my nuts. You see, late last night or early Sunday morning, severe thunderstorms blew through the region. And the flat screen is just a little more than one year old, conveniently just out of the warranty.

Sure enough, as I fiddled with the remote control, standing bewildered in my boxers, I knew the TV was not going to turn on. I knew that after I unplugged it and let it sit that it was not going to turn on. I knew that the damn thing was fried. And sure enough, it would not turn on. However, the red light that shows it is getting power was still on.

So I went through the steps. Unplug. Wait. Plug back in. When I plugged it back it in, it clicked, once. Hmmm. Never done that before. Red light appears again. Tried turning it on again- no luck.  I did notice some strange white noise type stuff faintly emanating from the speakers.

By now, both boys are awake and antsy. They were banned from the Wii the day before for beating on each other when one whooped the other in Baseball 2K11. Their only hope for morning distraction is that I get this TV to turn on, and it is not happening.

If your entertainment center is like mine, it is a snarl of wires and cables hidden just out of site behind the equipment. As I started to dismantle it, to get the TV separated, I disturbed a  substantial dust bunny hutch. How does dust collect were it can’t fall, between shelving? Anyway, I got the TV free, and laid it face down on the ottoman. Within a few minutes, all the screws were out of the back casing.

I have dismantled a fair amount of electronics and built computers from parts, but I am in no way an expert or an electrical engineer. What I was hoping for was that the fuse that ALL of these electronics seem to have, was blown. It is an easy and very very cheap fix. Find a decent stereo at a yard sale that doesn’t work? It is likely the fuse. Anyway, my fuse was crystal clear and perfect. Shit. The power supply looked good, too. There were no blown capacitors and no obvious signs of a severe surge. I now knew that in order to fix this, I’d have to consult an expert.

I should note that everything was on a surge protector, and the TV was the only piece that seemed to be having a problem. I began to wonder why the fuse wasn’t blown and why the DVD player and cable box was still operational if it was truly a surge due to the thunderstorms.

After some googling, I found a local TV repair expert. God bless him that he answers emails on a Sunday morning. After a few emails back and forth, we became fairly sure that the main board of the TV was fried. Looking online for the board, a new one runs about $180.00. Not bad, compared to buying a new TV. Of course every vendor was out of stock. However, the expert cautioned me, “The surge may have been sent via the HDMI output of the cable box to your TV. Don’t hook up a new TV before determining if the HDMI processor in your cable box is shorted.”

Look, my family is not fat and we love to be outside, but we have got to have a working TV downstairs. It is an imperative. We took a trip to Best Buy and picked up a greatly inferior TV, compared to the fried one, to hold us over. My thinking was that I’d either return it and pay the restocking fee, or if I really loved it, I’d replace the TV in our bedroom.

An hour later, after vacuuming the dust bunnies and removing stuff and re-hooking up stuff, I turn the TV on, and set it to pick up the signal from the HDMI out from the cable box. No signal. You are fucking kidding me. I mean I’ve given up the better part of what was already going to be a busy day for this shit. So I switch over to HDMI 2, and lo and behold, it gets a signal from the DVD player. So I switch the cable box over to HDMI 2, and nothing.  I switch the HDMI cables- nothing. I’ll be damned, it is the HDMI processor on the cable box. Luckily, I didn’t fry the HDMI input on the new TV by hooking it up to the bad cable box.

A call to Comcast was made. After jumping through hoops and much un-hooking and re-hooking of the same shit I had been un-hooking and re-hooking all day, Comcast concurred- the box was bad. I told them that I was sure their equipment had allowed a surge from the cable line itself to the HDMI processor and into my TV. They filed a damage claim for me and will call me tomorrow at work for more information.

Now most of you smart asses out there are fixin’ to tell me that I need a surge protector on my broadband cable line. As best as I can tell, that is simply bullshit. I’m sure Comcast will try to tell me the same thing. However, the internets provide a wealth of information, and I intend to geek them with as much jargon as possible, as well as show them that there is no ground wire running from their junction box into the earth. It seems their installer may have forgotten a crucial step.

What, dear readers, does this mean for you? Beware that power surges can come from HDMI outputs to your TV and make sure that your cable or satellite line is grounded! I’ll be sure to let you know if Comcast comes off any of their billions to make this poor biscuit eater whole again on his flat screen idiot-box loss.

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My little swing trading system has suffered for part of this year but appears to have weathered the worst of the drawdown. In fact, my post about taking the system to the doctor damn near marked the bottom of the drawdown for the more aggressive models.

The 10% of Equity per Trade model has been in the black for over a week now (see the YTD equity curve below), and the other models are flirting with going positive for the year. Their metrics, specifically the percentage of winning trades, are still sitting beneath their historical averages. I maintain that they will eventually return to their means, or better.

Here are the Year-to-Date results.

20% of Equity per Trade

Net % Profit: -1.76%

Annualized: -4.23%

Average Trade: -0.04%

Winning %: 60.81%

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10% of Equity per Trade

Net % Profit: +0.97%

Annualized: +2.38%

Average Trade: +0.12%

Winning %: 63.50%

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ATR Position Sizing

Net % Profit: -1.03%

Annualized: -2.49%

Average Trade: -1.10%

Winning %: 61.70%

.01/share was included for commissions.

To see more information about historical backtested results of the system, you can take the free trial, or feel free to leave a comment in the comments section.

YTD Equity Curve for 10% of Equity per Trade Model:

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I’m watching the red and green lines, which are both measures of short-term breadth.

The red line measures the number of stocks trading above their 5 day moving averages, and the green line is a decliners indicator.

The red line could drop a little more before I would be comfortable yelling for a bounce, but the green line is well within the range that suggests a bounce is near.

Bottom line, while I’m expecting more downside soon, short-term breadth is suggesting that the market firms up here. At the very least, I’m looking for some consolidation before the slide-down resumes. The best-case scenario looks to be a small bounce.

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After a wonderful holiday weekend, we are watching to see if SPY can break above the flag formation that has contained its price action since the beginning of May. If futures are any indication (up ~1% as I write), it will break above it Tuesday.

As I remarked a couple of weeks ago, action during this correction/consolidation has been very orderly. It has been a swing-trader’s dream. Note the blue arrows showing the RSI2 peaks and valleys and how they have corresponded perfectly with every bounce and pullback.

With the market already nearing overbought, a break above the flag formation and above resistance at $134.00 may signal another extended run is starting, which will likely lead to the market becoming severely overbought before any pullback occurs. If this happens, look for a re-test of the previous high set at the end of April.

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This is my current High Tight Flag watchlist. In my opinion, these are some very sweet setups.

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When the VIX rises above its 50 day moving average, will returns be above average over the next 50 days?

As the chart above shows, $VIX has closed above its 50 day moving average for the last two trading days. Curiously, today it closed lower, but is still above the MA50. When $VIX rises, traders are typically a little squirrely, and seem to want to take on less risk. However, the test below appears to indicate that when $VIX rises above its MA50, the market may actually out-perform over the intermediate term.

The Rules:

• Buy SPY at close when $VIX closes above its 50 day simple moving average.
• Sell at the close X days later.
• No commissions or slippage included.
• All SPY history used.

The Results:

Summary of Results:

The graph clearly shows an edge to owning SPY after $VIX crosses above its 50 day moving average.

The SPY buy and hold line (blue) is generated by buying the index at inception and holding it 50 days, and then repeating the process at the close of day 50, until all history is tested over. Then the 50 day segments are averaged together.

Incidentally, creating a simple system that buys on a $VIX cross above its MA50 and sells to close the trade on a $VIX cross below its MA50 does nearly as well (within 0.5%) as Buy and Hold yet has reduced drawdowns, but that is another post for another time.

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Today…

There were 8 other picks for this morning’s open, but GTXI was the top pick. It was also 1 of 2 High Tight Flags for the day, with LONG being the 2nd.

PDS trial is free and only requires a valid email address.

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