Thursday, January 21, 2010

S&P follow-up

A quick look at the SPX Daily Trend Model as it finished trading today:


SPX Daily - Vortex Indicator

From a shorter-term view:


SPX 30 minute

Google is down hard after-hours.  Here is my GOOG Daily Trend Model (excludes today's after-hours trading):


GOOG Daily Trend Following Model

16 comments:

Wayne said...

We're officially short on the daily now. BTW, excellent call on GNVC, it's been quite a ride since your recco!

Wayne

Mike said...

last I checked....KBE and KRE were holding up pretty good.

-Mike

StanTrenton said...

For a trend follower, risk is minimized when a position can be opened as close to the signal line as possible. Now after today, with the daily trend confirmed down, a retracement to the signal line will be an excellent opportunity to add more money to the short position. Also, if trading leveraged end-of-day funds at Profunds or Rydex, this technic will allow us to take advantage of beta-creep to get even better prices.
Stan

JD said...

Stan,

So, instead of initiating a position, you are likely to wait until there is a reversion to the signal line? Makes sense, what you say, because with such a drastic move yesterday, a reversion is high probability event, imo.

StanTrenton said...

JD,
Did I give you the impression that I did not take the daily signal today?
Well, to be crystal clear, I did take the signal.
I must follow my system. I do not condone waiting. I am now short the SPX.
However, I am saying that with any new money to invest, the lowest risk entry would be to add to the short position as close to the signal line as possible.
I hope this clears up my statement.
Stan

JD said...

Stan,
That was crystal. Thanks! And belated thanks to your earlier comment in another of Allan's posts. Your step-by-step guide really helped a new initiate like me to grab hold of the system (not that it's complicated) into a trading methodology.

Anonymous said...

Stan,
What form of a short did you take after market closed? Order to buy short ETF on market open or options?

Thanks

Anonymous said...

Stan are you using the TZA/TNA vehicles? After getting whipped the other day I've gone with the end of day trading like yourself. I am trading this in my 401K so I need to be careful with fund settlement issues and not overtrade. Though I do see the value in adding at the signal line, I do think it injects a bit of judgment into an otherwise 100% objective system.

Paul

Anonymous said...

Allan,

Just to be clear. Once the daily or weekly target is reached- it is the next morning that you purchase the trading vehicle?

Not last minute before close on day target is reached.

Thanks Tom

StanTrenton said...

Folks,
Please accept an answer that will broadly cover your questions.
1st of all, there are many trading technics out there that work but what's important for me is to find one that works for me only. What can I realisticly follow?
For me, I am retired but busy with things I enjoy doing during the day. I don't want to spend all day looking at a computer screen.
Therefore, I trade the Daily Model.
I trade leveraged end-of-day funds at Profunds: ULPIX and URPIX.
I only need to check the market close to the Profunds cutoff time 3:55pm each day, and get my order in before then.
All the thinking, analysis, and energy expended that I used to do is behind me.
I've learned that no one can predict accurately and consistently, there's no crystal ball or holy grail, and there's just no reliable way to eliminate the risk.
I just simply trade the signal line, execute my trades the same day the signal triggers, accept the risk, flow with it, and enjoy my life.
I can realisticly do that - It works for me.
I hope I've answered your questions.
Stan

StanTrenton said...

By the way, I always keep in mind Allan's "Statement of Certainty"
------------------------------------
"I have no guess, but I do have a certainty:
That my "Trend Following Models"
will catch every major move
in any direction
in any market
in any ETF
in any stock."
------------------------------------
The Daily Model keeps me on the right side of the market, always invested with the Trend.
That's all I need..
Stan

Allan said...

Stan,

Thank you for sharing your views on these Models and how you trade them. You explained the "attitude" that one needs that will lead to successful implementation of these Models in trading and in a straight forward and easily understandable way. I am humbled, impressed and very appreciative.

A

Anonymous said...

Thanks Stan for your reply.

Is there a particular reason you chose ProFunds as opposed to ETF's?

StanTrenton said...

Allan,
Thank you for your compliments.
Your Trend-Following approach fits me and my lifestyle perfectly.
Stan

StanTrenton said...

To "Anonymous",
Why I use Profunds over ETFs?
Here are some reasons:
1) No commissions.
2) I can execute trades either on line or by phone.
3) I'm not tempted to look at the market at anytime other than the close. I like the mental freedom.
4) If I choose to add to my position during retracements, due to the nature of leveraged index funds I concurrently take advantage of any positive beta creep to get a better price.
5) It minimizes the number of actions I must take to place a trade.
6) Because I use the Daily Model, the signal is only valid at the close, which is perfect for Profunds end-of-day trading.
7) I've been with Profunds for well over 9 years and have never had an execution or any other kind of problem.
8) Finally, it is what I choose to do.
I have nothing against ETFs.
Stan

Anonymous said...

Thanks again Stan,

Really appreciate you taking the time to explain. I am going to look into those funds.