Closing Read Apr 1, 2010

Primary Trend=Transitioning

Number of days=10

PM Update Apr 1:  The Secondary flipped back down again in the afternoon as signal weight couldn't sustain +1440.  In the final minutes of the day, signal weight again rose to +1464, flipping the Secondary up by 1 point.  We're also starting to see some flattening in the Change graphic that is beginning to moderate the negative divergence somewhat.

AM Update Apr 1:  The Secondary has flipped back up at the open, gaining 81 ticks to +18.  To turn up, positive signal weight of +1440 is needed.

PM Update Mar 31:  The Secondary gained 48 ticks to -66.  

AM Update Mar 31:  The Secondary has gained 41 ticks to -58 at the open.  To turn up, positive signal weight of +660 is needed.  A close of signal weight greater than -840 will identify a new down cycle on the Secondary.

PM Update Mar 30:  The Secondary gained 14 ticks to -18.

AM Update Mar 30:  Signal weight of +420 turns the Secondary up.

PM Update Mar 29:  The Secondary remained down as signal weight could not hold +1260 for very long.  Tomorrow, modestly positive signal weight will be able to flip the Secondary up.

AM Update Mar 29:  The Secondary has flipped back up at the open.  To stay up, signal weight will need to remain above +1260.

Apr 1:  Closing Read

Signal weight recovered during the final hour, closing at +1464, the Change +15.  The value of the Primary is now back to +5000 and it will take very strongly positive signal weight on Monday to keep this cycle intact.  The Secondary also flipped back up in the final minutes of the trading day.  

So, what has the past 10 trading days taught us?  That when the Secondary isn't in a trending mode, the daily trading range of SPY will narrow, signals will fail, and we'll spend a lot more time waiting than trading.  Markets are either trending or they're not.  Why make life difficult when we have tools that tell us when to and when not to trade the indexes based upon the new 2010 trading model.  It has successfully avoided an entire group of signal that have failed to achieve their targets due to the narrow range caused by the state of the Secondary.  

For those of us trading individual issues, such as X, trading only in the direction of the Primary in conjunction with the Timing Accumulator will work regardless of whether the Secondary is trending or not.  Identifying targets and sticking to them are clearly the keys to success.  It all depends on how much time and effort you're willing to put into it and your skill as a trader.

So, coming into the new week we're still in this non-trending mode.  Until it breaks, we must be patient and stick to our disciplines.  As soon as the Secondary begins to trend, we can start taking the signals generated by the Delineator for the indexes.

Apr 1:  2:35pm

Signal weight now only +856, the Change -15 and price heading to fill the opening gap.  Not at all surprised.

Apr 1:  12:30pm

Signal weight now +1395 and the signal is out of confirmation with the Secondary as its slope is now fractionally negative.  Frankly, I don't see any difference with today's gap opening compared to any other gap opening over the past 10 days.  They've all failed to sustain an advance.  Off to the gym, next post at 2:30pm.

Apr 1:  11am  Enter Long Confirmed

For the record, the signal price on SPY was 117.83.  Signal weight continues extremely positive.

Apr 1:  10:30  Slope Change Up Confirmed, Early Enter Long Signal Issued

So there's both signals.  The enter long will confirm at 11 if signal weight exceeds +1350.  It's too early to tell if this is the bull trap that's setting up.  Would be fitting that it would be on April 1st if it were but I'm not going that far.  As far as the trading model is concerned, this is just another signal to be ignored.  Over the last 2 weeks as the Secondary has been transitioning, the range has been extremely narrow on SPY which is what we would expect and why trading is much more difficult.

Apr 1:  10am  Early Slope Change Up Signal Issued

An early slope change up signal has issued that will confirm at 10:30 if signal weight exceeds +1140.  Signal weight is extremely strong as price challenges the recent highs.  A long signal is expected within an hour at this level of signal weight.  But as the Secondary is still not trending, the 2010 trading model will once again ignore this signal as it has ignored all signals since the 19th of March, none of which have worked.

Apr 1:  Opening Read

Signal weight has opened extremely strongly positive at +1856, flipping the Secondary back up once again.  The Change +102 and TTXSlope=next bar at this level of signal weight. 

Mar 31:  Closing Read

117.54 again continued to hold any advance even as signal weight turned weakly positive today.  Signal weight closed at -657, the Change -29.  I'd expect to see the down cycle continue tomorrow and extend the value of the Primary to at least zero.

Mar 31:  10:25

Signal weight reversing.  It's a golf day.

Mar 31:  10am

Signal weight dropped to -1000 for awhile during the previous bar.  We should expect the current down cycle on the Primary to last 2-3 days.  If SPY takes out the lows from the 26th, signal weight should expand to more negative levels.

Mar 31:  Opening Read

Signal weight has opened weakly negative at -406, the Change -23.  Quiet so far.

Mar 30:  Closing Read

Dull after the signal.  Signal weight will need to remain negative Wednesday to continue the down cycle.  Negative divergence continues on the Secondary.

Mar 30:  3pm

Adios...off to the golf course. Haven't played in over a week.  I'd short SPY at the next sell indication on the Timing if signal weight is <0.

Mar 30:  1:30  Short Signal Confirmed at SPY 117.18

The signal has confirmed.  Since the slope value of the Secondary is not near -75, the 2010 model will not be taking this signal.  Aggressive traders may want to consider shorting if we get a bounce back near the highs of the day and signal weight remains negative as it will be very difficult for the Primary to turn back up today.

Mar 30: 1:02pm  Early Enter Short Signal Issued

There's the early enter short.  It will confirm at 1:30 if signal weight is greater than -170.

Mar 30:  12:30pm Slope Change Down Signal Confirmed

The slope change has confirmed and another bad signal avoided.  I've decided to call the new and improved model the 2010 model (lol).  We can expect to see a short signal today but I wouldn't take it unless the signal weight were around -800+.

Mar 30:  12pm  Early Slope Change Down Signal Issued

The early slope change down signal has issued and it will confirm at 12:30 if signal weight is less than +270.  With the Primary at +5275, there's plenty of room for it to decline.  Aggressive traders would take any short signal today with the continued negative divergence showing on the Secondary.

Mar 30:  11:20

Not surprised at all to see signal weight reverse at the highs.  The signal now out of confirmation and the Secondary back down.  Signal weight -504, the Change -74, TTXSlope=1 bar.  -1100 signal weight takes the Secondary to -75.  We're probably going to get a slope change next bar and a short signal later today if signal weight turns more strongly negative.  Notice the string of double chevrons down at 117.44?

Mar 30: 10am  Enter Long Confirmed (old model)

The long signal has confirmed for the old trading model.  I have some issues this morning that will keep me away from posting for a few hours.

Mar 30:  Opening Read

The early enter long is still active from yesterday.  It will confirm at 10am if signal weight exceeds +420.  The trading model will not be taking this signal because the Secondary is not trending.

Mar 29:  Closing Read

The best thing about today is that the value of the Primary is nearly +5000.  Otherwise, quite boring.  With the Change now at zero, signal weight will need to open +1500 tomorrow to keep the Primary rising.  Not much more to add without simply repeating myself from last week's posts.  While I don't spend much time ever talking about exogenous events, the end of the quarter is Wednesday...window dressing until then, eh?

Mar 29:  2:33

I see I didn't miss to much.  Signal weight moderately positive at +842, the Change now a negative -5.  More of the same from last week:  trendless.  One thing is good however--the Primary is now near +5000.  The higher it goes, the longer the next down cycle may become.

Mar 29:  12:20

Signal weight, while strongly positive, has not closed a bar yet at +1260 to trigger the enter long.  With the Change now nearing signal digits, the pattern from last week seems to be continuing.  I'm off to the gym having missed all last week due to illness.  Next posting around 2:30pm.

Mar 29:  11:30am

The early enter long did not confirm at 11:30 because signal weight was +1245, under +1260 needed to flip the Secondary.  The signal will confirm at the conclusion of any subsequent bar if signal weight remains above +1260.

Mar 29:  11:09  Early Enter Long Signal Issued

Signal weight now above +1260 flipping up the Secondary and triggering an early enter long.    The new trading model will not be taking this signal as the Secondary is not trending.  As long as signal weight remains strongly positive, I'd expect to see the highs from two days ago get tested.

Mar 29:  10:30

Signal weight continues to weaken.  For a few moments at the beginning of this bar, the Slope was +75, but signal weight was well below the +1260 needed to turn the Secondary up, so no early enter long signal was issued.  Looks now like the opening gap wants to fill.  If signal weight can return to strongly positive numbers, we will get a long signal.  Otherwise, just more of the same like last week.

Mar 29:  10am  Slope Change Up Confirmed

The slope change up has confirmed.  It looks like it will take at least another hour at the current level of signal weight to move the slope beyond +75.  By then the Change will be in small numbers. Signal weight has already moderated.

Mar 29:  Opening Read  Early Slope Change Up Signal Issued

Signal weight has opened strongly positive at +1389, the Change +60.  An early slope change up signal has issued, but the email did not go out because it happened at the open.  To turn up, the Secondary needs +1260 signal weight.  Either we're going to get a breakout above +118 on very strongly positive signal weight, or it's setting up for a bull trap per last week's comments.  We'll see soon enough this week.

Mar 26:  Closing Read

Not much more for me to add that I haven't already written this week.  At some point soon, some exogenous event is going to push the trend of signal weight in a direction, finally.  You all know which way I think it will be.  Have a great weekend.  

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