Tuesday, July 30, 2013

07/30/13: Bought 1 lot size UPRO

Avg price @ 73.08.  Stop set for 70, may tweak that a bit later, but preliminary stop is 70.

Saturday, July 27, 2013

07/27/13: Further review, looking for markets to go higher into 8/6

Upon further review, I realized an important part of the system needed some tweaking particularly when the last bar in the timing window overlaps with a large red or white candle.

The system looks at the previous bar before timing window and will help me determine what do at the timing window.  I didn't follow my system this go around which is a no-no if I want to get this to work on a more consistent basis.  The big red candle that occurred exactly on the timing window threw off what I was looking at.

In other words, we really should be long right now.

I am making a mental note that we should be long, and the mental short I had on should have been closed.  Counting this as a loss given I didn't follow the system.

Based on divergences, I am looking at markets moving up into 8/6 window.  This overlaps with a major timing window + new moon.  Might get interesting after 8/6.

Wednesday, July 24, 2013

07/24/2013: short SPX (mental note, no trade)

For whatever reason, the signal, right now to me at least, is another short SPX opportunity.  The first time recently was stopped out and this time it is trying another short.  The entry would have been ~$20.70 on SPXU.

I have no trades on since I am on a trade blackout until 7/31.  However, I am mentally noting that this timing window was a short, and the next one is coming up on Friday.

Monday, July 22, 2013

07/22/2013: Stopped out on SPXU

Sitting in cash.  I probably won't be trading until after 7/31.  Will be looking to move some balances around.  Will post my thoughts at the next timing window however.

Tuesday, July 16, 2013

07/16/13: Stopped out @ $71.30 UPRO

Flat now.  Bought at $71.26, exit at $71.30.  Sitting in cash and waiting for 7/17 10am.

Monday, July 15, 2013

07/15/13: Holding long - waiting for 7/17

Eked out some gains today as the market inched forward and moved stop up to protect gains (provided we don't have a nasty gap down tomorrow)

Market is up 12 out of the past 14 trading days and has ramped from 1560 all the way to 1680.  120 points in 14 trading days.  Seriously crazy but you know, it is what it is.

In the big picture, this could still be one nasty B wave before an even nastier wave C.  I don't know why people are arguing for a wave 1 here, it's too sharp and too fast for wave 1.  B waves can overlap and exceed the start of wave A which was 1687.

The next "possible" turn is 7/17 at around 10am on my chart.  This is really interesting because Bernanke is supposed to testify at...coincidentally...10am on 7/17.


I always say "possible" because my positioning depends on how price moves into that timing window.  My hunch is it's down after 7/17 but if we gap up on 7/17 I will reconsider.

Friday, July 12, 2013

07/12/13: Closed short, opened long, late to the party

Markets have gone on a tear plowing through every target thrown at it.  Markets never cease to humble the most steadfast traders.  I can't imagine all the shorts getting creamed in this massive runup.

Don't give up.  Learn from your mistakes.  Fail and fail a lot but learn from those mistakes.

I am switching to posting UPRO and SPXU charts.  It is much easier to chart expected targets after gaps form.  They also give me a better idea on the CCI charts.

The next timing window is at the open 7/15 so I opened a long UPRO at the start of the last hour.  To my delight, SPX popped huge relatively speaking at the start of the hour.  Is it possible that I am reading the right cycle?  How did it start the moment I put on a trade?  Anyway, the disappointment is that UPRO ended only +0.03% while SPX finished +0.31%, WHAT THE HELL???  I guess that's the risk you take in participating in these levered instruments, but I am usually in them for very short amount of time.

Entry: standard size UPRO @ 71.26
Stop: UPRO @ 68.45 (setting this to below the start of the gap)

Next timing window: open @ 7/15 Monday
Next major window: morning @ 7/17 Wednesday (Bernanke semi-annual meeting)

Wednesday, July 10, 2013

7/10/13: still holding short - widening stop to 1670 *risky*

Underwater on the short.  I need to pay more attention to the gaps that are occurring.

The most recent gap from the 8th which I've pointed to with a pink arrow suggests a target of 1660:
1632 - 1605 = 27 points.  Add 27 points to 1632 = 1632 + 27 = ~1660

The ubiquitous A = C calculation that I have seen floating around on the blogosphere remains either 1661 or 1665.  A is the wave from 1560 -> 1620 and C is the wave from 1601 to ? or 1605 to ?

The wave from 1560 -> 1626 (high) took 2.5 timing windows.
If we take 1605 (the most recent major low) and expand out 2.5 (A = C on time), then this implies some sort of high tomorrow 7/11.

Futures are hella green which is making me slightly nervous.  We shall see tomorrow at the open.

Monday, July 8, 2013

07/08/13: Took a short position at noon - holding into the 7/10 window, stop > 1660.

I took a short position at around noon as price entered a new high into the timing window.

The gap wasn't uber bullish but it wasn't muted either.  Somewhere in between but it gives me a better idea that the uber-bullish scenario isn't as likely anymore.

Price is hanging by a thread at the breakout of the upper resistance line of the two recent highs.  It is looking almost exactly like a textbook expanding diagonal triangle.  This implies a breakdown into 1610 zone.

Saturday, July 6, 2013

07/06/13: Outlook for week of 7/8 - looking for creep up to 1635 then short

In the previous post, I mentioned a low on 7/2 and then a rally into 7/7 (or technically 7/8).  So far this has been going as planned except the price target for the low was off.

Moving forward, I will refrain from giving general price targets.  INSTEAD, the timing windows are absolutely more important.  You will see why given we have a multitude of possible price targets, hard to pinpoint exactly what happens.

In the chart below, I removed RSI and MACD.  These are basically standard indicators and I hardly use them anymore, so I replaced them with Aroon Oscillator for help in looking at possible cycle lows and highs before DPO.

The next timing window is noon 7/8.  The next major window is end of day 7/10.  The timing windows continue to indicate a high into 7/8 noon, and then a low 7/10.  Let's run through the possible scenarios.  I think giving price targets may indirectly influence trading decisions.  As long as we see a high or a low into the timing window, then we know the appropriate trading decision to make (the opposite).

1.  Scenario 1: uber bullish - gap up on Monday, we reach somewhere around 1650 and move up to 1655.

As we move into the timing window noon for this, we must be watchful of CCI 233.  If it's sky high around 100, we will refrain from shorting.  On the other hand, if it's muted (below 100), then we take a short position for the retrace to fill the gap.

This scenario indicates that we were DONE with wave iv and are proceeding with wave v to new highs above 1687.

2.   Scenario 2: Bearish - muted open, creep up to 1635.  

Under this scenario, the expanding diagonal pattern becomes possible.  This means that a muted creep up to 1635 suggests a short term high is in.  You would want to take a short position into noon for a retrace back to 1605 and possibly lower.  A significant trend change would occur if TSI < 0.

3.   Scenario 3: Sideways - down into the timing window noon 7/8.

If this occurs, which I give fairly low odds on unless something newsworthy comes out during the weekend, we have ourselves a bounce to play into 7/10, then short that bounce

What's my take?  I'm going with Scenario 2.  Reason being is we have some negative divergences forming on the hourly CCI.  What is giving me hesitation is that the gap on 6/28 implies a move up to 1650s.  Additionally, IF we are still in wave B of wave iv, then the target of this if A=C is still roughly 1660-1665.

In short, wait until noon 7/8!