Graphical grasp

 

 

2010 Trading Odyssey

A New Year's greeting, in spreadsheet format, for those of you loyal stubborn tenacious enough to join me in this quest:

TZA system trades based on Daily Model

All signals generated End-of-Day

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For informational purposes only

 

SPY Hourly 

 

 SDS Hourly

TZA Hourly flips to BUY on Hourly close above 9.50

Out of the open....

Yesterday close flipped system to a Sell @ 9.47

Into the close

Holding LONG, would flip to SHORT on close under 9.47

Trading system update & news

First, the Hourly and Daily trading charts of TZA:

Hourly  on a fresh BUY

Daily holding SHORT from early December

Note that a close today above 10.05 would be a fresh BUY

Now a few examples of how this trading system looks across other tradables, specifically, Crude Oil, including a Crude Oil ETF that trades options:

USO Daily

USO Hourly

UCO Hourly

UCO Daily

UCO: The investment will seek to replicate, net of expenses, twice the daily performance of the Dow Jones UBS Crude Oil Sub-Index. The fund normally invests assets in financial instruments with economic characteristics twice the return of the index. It may employ leveraged investment techniques in seeking its investment objective.

Allan's Trading Notes

We have developed (or stumbled upon) an excellent trend following algorithm that appears to be very profitable across a wide cross-section of tradables.  I am focusing on the most active, liquid and volatile leveraged ETF's for my trading. Similarly, almost all of these have options available should the average winning trade percentage be high enough to suggest trading the signal with options. 

The pattern emerging across this universe of ETF's is that for every two trades, one is a whipsaw for a modest percentage loss and one is a solid trend trade for a sizable percentage gain.  

It is evident from your comments, questions and emails that these charts and the embedded trading system are something unique to my hardware and software set-ups  and that most of you are unable to replicate this on your own.  I am seriously considering disseminating these signals on a real time basis....it's that good!  If there is enough interest I can do this for a nominal monthly fee that would pale in comparison to the rewards inherent in trading even a single ETF along the lines of the above annotated signals.  You folks will have to do the math on our own, its not brain surgery.  My only hesitation is my time commitment, each day, every day, all day. Ergo the small fee.

Which brings me to this:  If anyone knows how to write an iPhone App or Twitter automated mail mailing (or"twitting" if you will), send me private email: apharris@mac.com


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SDS

Students for a Democratic Society

60 minute trade system

End-of-Day Analysis

Trading signals

Please click chart image to enlage

Trading system update

Here is a new look at the "TZA Trading System," my short-term trend following system that I have been tracking since it's creation in early November. 

After a fast whipsaw, TZA is back on a BUY:

TZA Hourly

Free Glenn Neely

Glenn Neely is offering a free two week subscription to his services:

NEoWave would like to give you the opportunity to offer your readers a FREE 2-week trial of the NEoWave Trading and Forecasting service, which is normally offered at a cost of $39. 

Here's the URL you can point your readers to:

http://www.neowave.com/free/http://www.neowave.com/free/

Based on current structure of markets in equities, gold & bonds, the coming two weeks should be an excellent time to sample Glenn's analysis. 


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ANV

I wrote up Allied Nevada Gold - ANV,  a few months ago, here.

Since then, it has risen more then 50%. 

Now compare ANV's monthly chart below with that of AXP in the prior blog:

As I just wrote a friend of mine, there is some serious economic disruption coming (although I used a more evocative four-letter word, beginning with the letter S).

It's there, if you look past the CNBC headlines.

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AXP

Monthly

Weekly

Daily

This is setting up to be one hell of a SHORT. 

"Not there yet.....but getting there."- B. Dylan

TZA Trade Summary

TZA update

An almost perfect play for move into end-of-year

Averaging about 5% per week since inception

On a personal note.....

I am not sure what needs to be said here.  The words and melody, soft and raspy voices, melodious, tranquil; the synthesis of age and beauty creating a portrait of an artist as an old man. A mirrored testament of a life serene, if only for this passing moment.  


Sunday is my personal day, a time for reflection and rest, a day to share some personal joy and angst. Something is unwritten, unsaid, it seeks release among the harmonies, the synthesis of  words, music, voices. In the end, subtly and unfinished, it leaves an image of our lives expressed in song so delicate, so vibrant, so eloquent.


It remains one of my favorites, a Best-of-Allan, for all that it says about love and life, for all that is says about you, about me. 

Find someone to love, then love her.

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Decennial Pattern in Stocks

I am preparing my managed accounts for a market debacle in 2010.  Below is the Monthly S&P chart annotated with wave counts, false bar stochastic and fibonacci retracement levels which paints the big picture set-up for what should be a typical deceminal pattern year.

Here is a brief write-up by Robert Prechter on the Decennial Pattern, taken from the October, 2009 Elliott Wave Theorist:

"Back in the 1920's Edgar Lawrence Smith  found a reliable pattern to the decades that he called the Decennial Pattern.  One if it's prominent features is a price high in the "9" year.  We usually show the composite pattern, but it is instructive at times to isolate a feature of the pattern, as in [the chart below]. The arrows pointing downward show peak prices in the "9" year of each decade going back more then a century.  Observe that in ten our of the past eleven decades, the "9" year contained a high price.  In only one instance --1949--did the year contain in important bottom.  And no one could possibly mistake today's market conditions for those of 1949 given that year's record low P/E ratio, high dividend yield, bearish economists calling for a post-war depression and the public's general disinterest in stocks. We are clearly at the other end of the spectrum, i.e. the normal optimistic end for the "9" year.  And the year is nearly over.  If the Decennial Pattern holds true as it has done so often, then stock prices over the next three to five years will be down."

The above analysis is predictive in nature, not the the stuff that a profitable trend following strategy is built upon. What it does do is establish an effective, "what-if" scenario, i.e. what if the trend does turn down, what can be expected, how serious will the decline be, how heavily does one play the new down trend?

2010 should be a very negative year in stocks, probably much worse then the 2008-2009 decline of about 50%.  Fundamentals aside, EW and cyclital analysis is pointing toward a down move relatively more severe then any we have seen in decades.  When and if the trend models kick in, it is time to take advantage of a once-in-a-lifetime opportunity. 

I am willing to pay the price of a couple of mediocre years returns for that one stellar year where all of my big picture analysis comes together and is ignited by a turning of my trend following indicators.  Nonetheless, we have had some nice winners this past year or two, despite my skepticism about a sustainable rally.  So in the weeks and months ahead, I will continue to do what I do best, isolate special situation stocks that are worth a shot no matter what direction the market is going, but always keeping an eye on the big prize, the riding of a super-nova wave in stock prices, in a direction and in a manner and velocity that takes everyone by complete surprise.

(Well, almost everyone.)


My best holiday wishes for all who grace these pages with your time and support.  I am working on some new ideas for coming year that will be new for me as well as my readers. If you want a head start, simply read "Why are you here," on in the right again, placing proper emphasis on the number one reason for any of us to be on this site. 


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TZA update

Buy at hourly close > 9.485

System +32.95% since 11/10/2009

Financial stocks

FAS 60 minute

JPM 60 minute

C 60 minute

GS 60 minute

BKX 60 minute

Laggards........or leaders?

IWM set-up

IWM 60-minute

FAZ set-up

FAZ 60 minute

This is the exact same trading set-up as the TZA model, substituting FAZ for TZA.  I have had some success using in-the-money near-term calls and puts with these signals, which has become a more viable alternative with the increased margin requirements placed on these highly leveraged ETF's.

TZA hourly system update

TZA 60 minute

Still holding short basis the December 18th Sell Signal.  Buy trigger for next signal is currently at 9.89.

Six weeks into trading and system equity is +31.09%;

New equity high!

GLD, again

GLD 21 minute

Best guess is that the decline of past hour is a B wave decline, to be followed by a final C wave advance, prior to next impulsive wave down.   Tough to trade in here, but a clean and decisive break below 106.00 would have me Short again.

GLD trade

GLD 15 minute

As illustrated above, the bounce in GLD provided an EXIT for the previously taken Short, leaving the me flat, awaiting the next Short trigger.  I've taken a few long scalps in individual stocks, but fully expect to be on the short side of this market once my indicators align again.

TZA

TZA 60 minute

Trade system up 28.41% since inception, 11/10/2009

KMKCF update

KMKCF was written up last October at $1.42.   Although up a nice 35% since the initial write-up, much more on the upside is expected.

KMKCF Daily

KMKCF Weekly

Tom Bishop, who generated this idea, has justed named KMKCF his Stock Pick for 2010.

"Continental Minerals (KMKCF ($1.97), which I believe is a juicy takeover target, is located in Tibet/China and has proven up 220 million tons of measured and indicated reserves in its high grade-porphyry copper-gold Xietongmen deposit grading 0.43% copper and 3.9 grams of gold per ton. This translates into 2 billion pounds of copper and 4.3 million ounces of gold. A feasibility study has been completed and the project has received all 16 sub-approvals and is now in for final approval. In addition the Company’s Newtongmen deposit, a couple thousand feet away and drilled off more recently, sports another 2.8 billion tons of copper and 2.3 million ounces of gold and 11 million ounces of silver. "

Looking at the above charts, by now most of my readers should recognize the Advanced GET Mechanical Trade #1 Set-Up (a/k/a Wave 5 Buy Signal)  on the Daily chart.  A move above $2.04 will trigger the Buy Signal.   

Targets on both Daily and Weekly charts are in the $3.50 - $3.75 range.

GLD Tuesday

GLD 15 minute

This is why I like multiple time frame charting.  Not only is GLD sitting right on top of major support, but now the 15 minute chart has an ATR SHORT TRIGGER at 106.74.  Breaking below that level will serve multiple masters, breaking support as well as trigging a short-term ATR trade.  Note also that the break of 106.97 level already triggered a Blue Wave Sell Signal.

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GLD - Line in the sand

GLD 8 minute

GLD 60 minute

Wave count and stochastic primed for reversal up in GLD

Allan's trading notes

Let's keep it simple and say that as long as 106.60 - 106.80 support holds, that GLD's decline is about over.  If instead GLD breaks below 106.50, then look out below.

GLD (support)

GLD 13 minute

Allan's trading notes

Major support is shown on the above 13 minute chart, between 106.60 - 106.80.  Low today so far is 106.82.   I would interpret any move breaking below 106.50 as the beginning, not the end, of a significant decline in GLD.

GLD (time frames)

GLD Daily - Bullish Wave 5 set-up

GLD 60 minute

GLD 5 minute

Allan's trading notes

A good question from Lucky deserves a graphically annotated response.  Based on the Daily chart, GLD should be finding support in here and resume its uptrend any day now.  In fact, we can see an Advanced GET Type #1 Mechanical Buy Signal being set up (aka "Wave 5 Buy Signal").

This view is supported by the 60 minute chart which is counting a completed 5 waves down, although the ATR trend is still short.

The 5 minute chart is more ominous.  It is suggesting GLD is in the midst of an impulse wave down.  That's why I posted the table of GLD lows from last week.  If 107.04 doesn't hold, then I am giving a whole lot more weight to the 5 minute analysis.