Saturday, May 08, 2010

Shots across the bow

In the days before radar, radio and high-powered binoculars, one ship meeting another at a distance might not be able to tell the country from whence she hailed. Therefore, in the 18th century, the captain would order a “shot across the bow,” that is, a harmless cannonball lobbed across the bow of the ship. This was essentially a way to hail the ship and ask her to show her colors. If the colors were of an enemy country, the captain might then order an attack on the ship, but the shot across the bow had to be made first for it to be a legitimate engagement.
 Here was the first shot across the bow, a daily Sell signal for US Steel:

X Daily Trend Model

Followed by another cannonball, GOOG:

GOOG Daily Trend Model

Then the venerable DJIA following suit:

DJIA Daily Trend Model

These were all Daily Signals, with the real confirmation of change held in abeyance, temporarily, by the Weekly Models.  As we saw on Thursday-Friday, this too would pass:

DJIA Weekly Trend Model

Of the over 50 symbols I track in the Trend Following Trading Model subscription service, 24 of them generated Weekly Sell Signals (including Buys for inverse ETF's) on Friday's close.

"Toto, I've a feeling we're not in Kansas anymore."



JD said...

I'm fresh out of a triple digit gain in X and here I am again sitting on another 210% gain TZA. I was in many of the frustrating whipsaws earlier in the year, but kept those losses small by following the rules. Now, I am riding the gravy train. Nice feeling to be on the crest of a wave, rather than drowning in the wake of one..thanks Allan!

Anonymous said...

Well, for me,with my 'conspiracy' oriented mind, I always have to pause and ask myself "whoa,WTF just happened here...!?"

a glitch in the Hal9000? a fat finger mistake? a simple thing really ? or could it maybe honestly privately have something at all to do with the SEC investigation of GS ? or the government audit of the FED ? Who Knows !?
But it does deserve the asking anyway.

What does it mean now for the market and the direction ?

Will this be the big bottom and the PPT and GS hal 9000 will drive the stock bubble back up. or do they want to keep taking it down?

was this really just a simple human error, like...."oops...sorry,my bad..." I goofed,the HFT computers followed my lead and millions of investors lost millions of dollars in 5 minutes....when their Stops got hit.

So now,should we expect a rally,or a continued descent downward?

If this move down was "an error".... does that mean the (real) market should

resume its "normal" direction and wave structure and fib level and s/r price action,and get itself back up to the 1150 area at least (s+p)

and retest 1180 at least and maybe 1200 at least.

I mean if this was just a human error....shouldnt things get put back to 'normal' again, and pretty soon at that?

what would normal be. That 'new normal' they used to mention last year.

Obviously this plunge and recovery wasnt normal.
so what will getting back to normal look like now?

I'm more of an 'investor' than a 'trader'.

I want to buy the biotech stocks and hold them . I dont want to be an in and out trader. buying and selling every other week.

but I guess youre saying just watch the chart and the trend system ,follow the enter and exit signals, keep it simple and we will do ok.

except for those times when we get whipsawed back and forth.