Trend Following Trading Models

It's been a good week for subscribers of my Trend Following Trading Models.  At the end of this post I'm posting the actual updated Trend Models.  But for starters, here is a snippet from the Weekend Update that went out Saturday, June 26th:

Trend Models & Trades of the Week

"This week generated a few intriguing new signals from the stock trend models.  Accordingly I am highlighting DISH and HGSI as dual Trades of the Week, both triggering Daily SELL SIGNALS. 

"There is also a relatively fresh Daily LONG signal for SDS, generated on Thursday's large decline in the SPX. Since SPX is SHORT and SDS is now LONG, let's add LONG SDS as our third Trade of the Week.

"Since all three of these Trades of the Week are on the SHORT side of the market, they are in that sense, all the same trade.  I personally prefer to mix my trades, some ETF's, some individual stocks, some options and use these fresh reversals to add to existing positions.  But there is a lot that can be said for keeping things much simpler, i.e. establish a SHORT position in the market by going LONG SDS and doing nothing else."

Index, ETF & Stock Trend Models as of June 30, 2010 

 Indexes

 ETF's

Stocks

Disclaimer:  Past performance is not indicative of future results

DJIA_60 minute chart

DJIA 60 minute trend model

This is what we are up against today, a low level consolidation pattern that is lulling us to sleep.  Note similar pattern from June 25-28th.  Same resolution?

DJIA_240 Trend Model

Here is a follow-up to yesterday's DJIA Perspectives blog.  It's the DJIA_240min Trend Model with today's opening gap down.  Initial target for Wave 5 is 9500.

DJIA perspectives

Here are three time perspectives of the DJIA which may explain the current indecision in the market place. 

60 minute

240 minute

Daily

Help Wanted

My Trend Following Trading Models subscription service is at a key breakout level and I am both honored by your support for my work and frustrated that there are not enough hours in my day to expand the service to its highest and best potential.  I am seeking some help to take things to the next level.

First, I want a professional web site where I can keep updated charts and signals on multiple time frames.  Second, I would like the web site to have a special tutorial sections explaining the nuts and bolts of the system, along with nuances that are of practical help in applying and managing the models. Third, I would like the website to have an archive of all alerts sent out since inception of the service.

Finally, I would like to get the word out about the service beyond my loyal blog readers.  I think there is a huge market for a simple yet effective trading system for stocks and indexes.  A little promotion could go a long way in making the service better for everyone.

If you have the skills and motivation to help me accomplish these goals, send me an email: allallan@me.com


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Again, for the first time

I knew this song was special when I first heard it, lying in my bed on Roselawn, Northwest Detroit, circa 1966, listening to WBZ in Boston, which I could only receive on my transistor radio late at night. I listened for weeks, just to hear this song, before it made its way to the local Detroit radio stations.

Fast forward to 2010, when once more the sentiment reaches deep, touching my life again, for the first time.

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BP - Accleration of global financial crisis

This linked article from OilPrice.com paints a very scary picture of financial fallout from the oil volcano and the imminent demise of BP.  But with crisis comes opportunity and according to this author, that opportunity is identified in the bottom excerpted paragraph below.

BP Daily Trend Model

Article Excerpts:

"The BP crisis in the Gulf of Mexico has rightfully been analyzed (mostly) from the ecological perspective. People's lives and livelihoods are in grave danger. But that focus has equally masked something very serious from a financial perspective, in my opinion, that could lead to an acceleration of the crisis brought about by the Lehman implosion.

"People are seriously underestimating how much liquidity in the global financial world is dependent on a solvent BP. BP extends credit - through trading and finance. They extend the amounts, quality and duration of credit a bank could only dream of. The Gold community should think about the financial muscle behind a company with 100+ years of proven oil and gas reserves. Think about that in comparison with what a bank, with few tangible assets, (truly, not allegedly) possesses (no wonder they all started trading for a living!). Then think about what happens if BP goes under. This is no bank. With proven reserves and wells in the ground, equity in fields all over the planet, in terms of credit quality and credit provision - nothing can match an oil major. God only knows how many assets around the planet are dependent on credit and finance extended from BP. It is likely to dwarf any banking entity in multiples.

"If BP does go bust (regardless of whether it is deserved), and even if it is just badly wounded and the US entity is allowed to fail, the long-term OTC derivatives in the oil, refined products and natural gas markets that get nullified could be catastrophic.

"The market, intellectually lazy and slow to realization, as it often is, probably has not woken up to it yet - but the BP crisis could unleash damage similar to the banking crisis. A BP failure through bankruptcy could make Lehman look small in comparison, and shake the financial house of cards we live in even more severely. If the implicit danger of the possibilities embedded in such an event doesn't make an individual now turn towards gold at full speed, it is likely that nothing will."

 GLD Monthly Trend Model

Is this chart tradable?

SPX 30 Minute Trend Model

While awaiting swirling tropical depressions to stir-up the venomous spewing volcano of oil and God knows what else  into the Gulf and surrounding areas, including but not limited to the entire Southeast coast of our country, ask yourself:  Is this chart tradable?  

I think so and have built a subscription service around similar models.  Yes, this is a particularly effective segment of trend following, but there are enough of these looking charts to more then compensate for the choppy ones.

Yea, I'm allowed to tout my own horn, then again, don't get me started.

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TRE

Tanzanian Royalty Exploration Corporation, an exploration stage company, engages in the acquisition and exploration of natural resource properties. It primarily involves in the exploration of gold properties, with a focus on exploring for gold properties in Tanzania.

TRE was in the initial Gold & Silver Basket sent out to subscribers last weekend.  There was no easy entry here, you just buy the uptrend.

There will be one of those Wave 5 Buy Signals along the way up for an easier entry, but, from what levels?  This is a nice chart and a nicely leveraged play on the price of gold.


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Breaking Bad

Set and produced in Albuquerque, New Mexico, Breaking Bad is the story of Walter White (Bryan Cranston), a struggling high school chemistry teacher who is diagnosed with terminal lung cancer at the beginning of the series. He breaks down and turns to a life of crime, producing and selling methamphetamine with his former student Jesse Pinkman (Aaron Paul) in a desire to secure his family's financial future.

INDU - Wave 5 Sell Signal

Below is my DJIA chart with the elements of the Advanced GET Wave 5 Sell Signal imposed upon price movement the past few weeks. You can see that all elements of the mechanical sell signal are now in place, with a target for the move of between 9200-9700 on the DJIA.  Also noted is the reversal level of 10,120 which turns the Daily Trend Following Model SHORT.

The elements of a mechanical Wave 5 Sell Signal:

(1) A measured three-wave decline followed by a fourth wave advance;
(2) Wave four channel up into Fibonacci window (50%);
(3) Elliott Oscillator retraces from oversold back to the zero line (middle study);
(4) False Bar Stochastic Sell Signal (bottom study);
(5) Price break-down through trend channels to begin Wave 5 decline.

VXX Trend Models

Below is the VXX 480 min and Daily charts.  The 480 minute chart, by its construction, is a good precursor for new Daily chart signals.  In this case, its suggesting an imminent Buy on the VXX Daily @ 28.35, which would be a negative signal for the general market.

VXX 480 Minute Trend Model

VXX Daily Trend Model

Bellwethers

A bellwether is any entity in a given arena that serves to create or influence trends or to presage future happenings.

The term is derived from the Middle English bellewether and refers to the practice of placing a bell around the neck of a castrated ram (a wether) leading its flock of sheep.  The movements of the flock could be noted by hearing the bell before the flock was in sight.

Mysterious inexplicable coincidence

Below is a six month view of NNVC with the Daily Trend Model, Elliott Wave and a couple of Trend Regression Channels imposed upon prices.  The larger channel is of Primary degree up from the inception of this latest uptrend from last November's low and a smaller one of Major degree that contained the most recent sell-off.

There is a lot to take in on this chart, but notice how three of the Daily Trend Model LONG signals come in right at the larger Trend Regression Channel, including the most recent LONG signal on June 16.  There is something eloquent about this symmetry, although I don't really understand the how or why of it, or, if it is merely another reminder of our respective paths in life;  mysterious, inexplicable, coincidence. 


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NNVC - on the road to triple digits

This morning's press release is a huge step forward in NNVC's migration to respectability. Devour each paragraph, each sentence below with one eye on the ramifications of this animal study on the entire platform of nanoviricides being developed and as an authentic paradigm changing event in anti-viral treatment.  If NNVC is going to triple digits, this is the springboard from which share price should never look back.

Anti-Dengue Nanoviricides Achieve Significant Protection in Initial In Vivo Studies on Dengue Hemorrhagic Fever


WEST HAVEN, Conn.--(BUSINESS WIRE)--NanoViricides, Inc. (OTC BB: NNVC.OB) (the "Company") reports that its anti-Dengue drug candidates demonstrated significant protection in the initial animal survival studies of Dengue virus infection. The studies were performed in the laboratory of Dr. Eva Harris, Professor of Infectious Diseases at the University of California, Berkeley (UC Berkeley).

Treatment with one of the anti-Dengue nanoviricides® led to survival of 50% of the animals for the duration of study in the ADE model. In addition, animals treated with several anti-Dengue nanoviricides survived longer than the control animals treated with vehicle alone. This ADE model of infection is uniformly fatal in 100% of the infected animals within 5 days after infection.

Dr. Harris is a leading researcher in the field of dengue viruses. Her group has developed a unique animal model for the most severe and potentially fatal form of Dengue virus infection in humans, Dengue Hemorrhagic Fever/Dengue Shock Syndrome (DHF/DSS). The model emulates the “Antibody-Dependent Enhancement (ADE)” of Dengue virus infection in humans that is believed to lead to DHF/DSS.

“We are very excited about these results,” said Professor Harris, adding, “This is a very important demonstration of a viable drug candidate leading to significant survival in the ADE model of Dengue virus infection. I believe nanoviricides show great promise in our model and against severe dengue disease.”

“The first screen has already shown that we are on the right path,” said Anil R. Diwan, PhD, President of the Company, adding, “We believe we have at least one potential drug candidate against Dengue now.”

“We have been able to produce an effective drug candidate against dengue in a very short time,” said Eugene Seymour, MD, MPH, Chief Executive Officer of the Company, adding, “This demonstrates the strength of the nanoviricides technology platform.”

The Company has previously reported significant efficacy of several nanoviricides in two different in vitro (cell culture) tests against dengue virus type 2 conducted by Professor Harris’ Lab. Some of these nanoviricides were tested in vivo in the present study.

Dengue is receiving significant international attention as it threatens over 40% of the world population, according to WHO. Dengue cases with significant fatality rates have started rising in tropical countries this year already, as demonstrated by reports from India, Sri Lanka, Indonesia, Philippines, Cambodia, and Colombia, among others. Dengue is endemic in Asia, Mexico, the Caribbean, Central America and many countries in South America. Dengue virus infections have occurred in the southern US states, including a current outbreak in Key West, and travel leads to sporadic cases of dengue in the US.

Foundations run by Bill Gates and Carlos Slim are now teaming up with Spain to donate a total of $150 million to fight dengue fever, malaria and malnutrition in Mexico and Central America under the 2015 Meso-American Health Initiative (http://blog.taragana.com/health/2010/06/14/bill-gates-carlos-slim-announce-150-million-health-donation-for-mexico-central-america-24172/).

Dengue virus, a member of the Flaviviridae family of viruses that includes West Nile and Hepatitis C viruses, is transmitted to humans via female Aedes mosquitoes. There are 4 different serotypes of Dengue virus that infect humans. When a person is infected with Dengue virus for the first time, the disease may not be severe, inducing fever, muscle and joint pain, and rash. When the same person is later infected by a different Dengue virus serotype a more severe disease may develop; Dengue Hemorrhagic Fever/Dengue Shock Syndrome (DHF/DSS) occurs in a significant portion of this population. This DHF/DSS may be due to ADE caused by antibodies produced during the first infection. According to the WHO, fatality rates of DHF/DSS can exceed 20%. Currently there are no approved vaccines for prevention nor drugs for treatment of Dengue virus infection.

GOLD

Let's not keep banging our heads against the wall when there is a clear Wave 3 advance taking place in the precious metals.  I sent out a Gold & Silver Basket to my subscribers earlier this weekend and expect to add more gold and silver stocks going forward.  What follows are three views of the the gold market and a table comparing returns on those charts to returns from a basket of mining stocks during the psat 18 months.  This looks like the real deal to me.

GLD

DGP

GDX

Below is a copy of an email Alert I sent out to subscribers over the weekend, illustrating the potential that individual mining stocks have over even leveraged gold and silver indexes:

Here is exactly why I prefer individual gold stocks to indexes and/or leveraged indexes.  The individual Gold & Silver stocks come from the current list and/or stocks I have written up on my blog during the time period. Note that the SPX for the same period is up +44%.

Dates:  1/1/2009 through 6/19/2010

Gold & Silver Indexes
 
GLD  83.92--->122.83 =  46%
SLV  11.09---> 18.75   =  69%
GDX  31.31---> 54.06  =  72%

          Average = +62%

Select Gold & Silver Stocks

ANV   3.92---> 21.83   = 457%
GSS   1.27--->  4.41     = 247%
TRE   3.50--->  4.90     =  36%
KMKCF 0.30--->1.96  = 553%
SWC   4.84---> 13.53   = 180%
TGB   0.98--->  5.04    = 415%
SVM   2.08--->  7.50   = 260%
     
          Average = +307%

Father's Day

Got BP?

Published: Saturday, 19 Jun 2010 | 4:46 PM ET By: Reuters

It took days of very public pressure from President Obama and countless hours of private negotiations, but BP finally agreed on Wednesday to put $20 billion in an independently managed compensation fund and to provide the government a list of shareholders for public execution. After meeting with the company’s top executives at the White House, Mr. Obama also announced that beginning July 1, BP shareholders will be executed, one by one, until the gushing oil leak was stopped.

“The people of the gulf have my commitment that BP will meet its obligations,” the president declared, adding that, "[the] shareholders took their chances when they bought the shares [of the beleaguered oil company] and that now it was time to pay the consequences for their actions." Obama added that the executions would not pre-empt any claims in court.


SPX Trading Model

I started Trend Following Trading Models in early January.  The chat below chronicles all of the real time signals of the SPX Daily Model since inception.  I consider this model the defining model of the dominant trend in the markets.

SPX Daily Trend Model

1/21 Sell 1116    +21

2/16 Buy 1095  +97

4/16 Sell 1192   -25

4/23 Buy 1217   -33

4/27 Sell 1184   +69

6/15 Buy 1115    +2

Total SPX points = +131

Disclaimer:  There results might be random.  Who knows? I am not offering investment advice, nor are my models. I might be random. Who knows?  The Who is a rock and roll band from the 70's and my mention of them does not suggest they know any more then the rest of us, nor does it constitute an endorsement of their music and conversely, nor does it constitute their endorsement of me, or my models, or of the randomness in our lives.  Not that there is anything wrong with randomness.  It just that after all of these years, it does tend to tire one out.  But that's another story, one for some random Sunday blog.

A Gold & Silver Basket

In late 2009 I wrote a piece on Gold, highlighting two promising gold stocks, ANV and SWC:

http://allallan.blogspot.com/2009/09/gold.html  

Since that write-up, ANV went from $9 to over $20, while SWC went from $7 to over $13.

I wasn't utilizing the Trend Models back then, not like I am now, but those two stocks have clearly been huge winners in mega long term trends.   We know from the Trend Tables that gold and silver trend well, especially in longer-term models.  We can glean from the performance of these two stocks that applying trend analysis to individual gold and silver stocks can produce some nicely out sized gains.

 In January, 2009 I wrote up TGB @ $1.  It ran to over $6:

http://allallan.blogspot.com/2009/01/markets-and-new-pick.html

The more I think about a Gold & Silver Basket to complement the Trend Models, the more appealing the idea becomes to me.  While waiting for Armageddon to arrive to the stock market, this could very well be an excellent sector to generate solid returns.  I hope to get started on the basket in this coming subscriber Weekend Update.


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Big picture review

Has the big picture changed since last Friday's post? 

The above SPX Daily chart illustrates an Advanced GET set-up for a 100+ point SPX decline.  We have a measured 4th wave, an Elliott Oscillator almost to the zero line, a False Bar Stochastic about to flip over and prices into the Fibonacci reversal window.  A break now through the Trend Regression Channel coming up from the  "B" Wave low containing the "C" Wave advance will trigger the trade.

The market can keep advancing and cancel out this pattern, but it can also finally reverse and provide an excellent trade opportunity to the downside.  It should tip its hand in the next few days.


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NNVC

I sent this out to my subscribers yesterday, here it is with updated charts:

A couple of encouraging NNVC charts.  First, the 480 minute which is LONG.  This is an excellent proxy for the Daily chart, a little more sensitive and usually a precursor for the Daily Model flipping. Second, the Daily chart, which although still bearish, when looked at with the 480 minute chart, can be considered very much in Pending BUY mode.

And one more that I have been watching, for traders only, the NNVC Hourly Model:

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DNDN

DNDN remains on a Daily Trend SELL from early May @ $47.60:

This represents the essence of Trend Following, at least the way this particular algorithm works.  No big move, up or down, escapes capture.  In this case, about double the amount of Buy & Hold points.  The trend line holds the key and each day a new reversal number represents the location of the trend line.  For today, that reversal level for DNDN is $41.32.

SPY - 30 minute

Here is an SPY_30m chart showing an Advanced GET set-up for Mechanical Sell Signal.  In this case, the requirements have not yet all been reached:

(1) Measured 5-wave advance;
(2) Divergence in Elliott Oscillator;
(3) Break-down of Trend Regression Channels.

It still will take a break-down of the auto trend regression channels to trigger the signal.  Note that once again, approximately same level that flips the Trend Model to Short will also constitute of break of the channel, at about 110.55.

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UNG Weekly Buy Signals

Below is a Weekly chart of UNG which as of today is in BUY PENDING mode.  This means that if UNG closes the week at or above current levels, it will trigger a Weekly BUY Signal. 

Not only is the Weekly Trend Model closing in on a fresh BUY,  the requirements of an Advanced GET Mechanical Buy Signal are also present.  Those requirements are:

(1) Measured five wave decline;
(2) Divergence in Elliott Oscillator (lower study);
(3) Break-out above Trend Regression Channels.

You can see on the above chart that the Trend Regression Channel from the previous wave iv high is coming in this week right at the Trend Model Reversal Level, so again if prices close the week at or above current levels, both the Trend Model as well as the Advanced GET mechanical Buy Signals will be confirmed.

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VXX update

This VXX chart sums up everything:

The uptrend in VXX (downtrend in markets) has come back to support in the form of the Trend Model trend line.  Either it finds support and begins another leg up (down in the market) or it breaks support and starts a new downtrend (more rally mode for markets).  A good bet here, one way and then, if necessary, the other way.

A friend of mine who comes in and out of my store of knowledge in very mysterious ways, but always with acutely accurate observations on who is pulling what strings, suggested to me over the weekend that the door out of the equity markets has gotten very small (read: May 6, 2010).  Market strength, especially from overnight gaps, are one way of widening that door. 

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BP Looming Disaster

Let's start with the Daily Trend Model, but it gets worse according to the article appearing after the chart.

I lifted the following piece off of a trader's forum this weekend and although I don't know enough to comment on the veracity of the content, its scary enough to pass along, just in case its true.

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Lindsey Williams is out with a new interview, over at Alex Jones. He's claiming the following info about the BP Deepwater Horizon oil leak. He claims the information came from an oil industry executive whom he knew in Alaska when he lived with these people, and worked with them.

http://www.infowars.com/lindsey-williams-talks-with-alex-jones-about-deadly-gases-leaking-from-bp-spill/

I don't do a lot of Alex Jones. This information is unconfirmed, so we'll have to see.

Here's some of the information in summary form.

1) This is not a conspiracy, it's an accident, and a disaster.

2) The oil is abiotic oil, from deep within the earth. It is not the fossilized remains of long dead life. This oil is produced within the earth, and the earth is full of it. The Russians discovered abiotic oil, and are now the number 1 exporters of oil in the worls; but they had the good sense to drill for the stuff on land. Lindsey says the text books on how oil is formed will have to be rewritten. He stated there is no such thing as Peak Oil.

3) The oil is gushing from the well at pressures between 20,000 and 70,000 pounds per square inch. Lindsey indicates the wells in Prudhoe Bay, AK, came in at about 1,500 pounds of pressure. He says 50,000 pounds of pressure is beyond our technical ability to contain. I think this means that it would have blown the safety valve, even if it had not been defective. Lindsey indicated that the oil is gushing out at the rate of about 4 million gallons per day, but that the gent speaking knew he'd be quoted, and Lindsey suggested that you could put the actual figure much higher.

4) There is no hope of stopping the spill short of a nuclear weapon. It will take months to put this device (bomb) in place, as there will have to be an angle well drilled, and the bomb placed in it. I think this well then would have to be back-filled. In theory, the detonation would crush the existing well and well casing, and stop the flow of oil. Here's the problem. Lindsey said he heard "fear" in the voice of the person furnishing the information, who then added that if this technique did not stop the flow of oil, it could actually fracture the rock strata and make it impossible to ever contain. A fractured rock strata would then produce other leak sources. (Note, there are already rumors of other leak sites apart from the Deepwater Horizon site, meaning a mad genie may have already been unleashed).

5) And the worst part (probably) is that there is more than just oil gushing from the seabed. It is accompanied by volatile hydrocarbons which are poisoning the area, and are bubbling to the surface where they can be blown ashore. He mentioned that one of these was benzene, a known carcinogen, and a potent one. Lindsey's tone was that if this were just an oil spill it would be one thing, but these volatile hydrocarbons put the disaster in a whole new league.

6) The American people are not being told the truth, and workers in the area are not being told the risks of exposure they face. Lindsey went on to say that in several decades, exposure to the airborne pollutants could produce a health emergency among exposed people.



Link to the interview (click here)

Monthly Trade Set-Up

Below is a monthly chart of the DJIA with the Monthly Trend Model and Elliott Wave analysis courtesy of Advanced GET:

 Advanced GET Mechanical SELL SIGNAL:

(1) Measured 4th wave;
(2) Oscillator back to zero line (bottom study);
(3) False bar stochastic Sell Signal;
(4) Break of trend regression channels.

What is missing, so far, is the Trend Model Sell Signal. But on a Monthly chart, this will always be a lagging indicator with way too much lag to be of any worth in trading.   We have seen in the last two monthly bars how that Monthly Trend Line has attracted prices, but repelled them both times. Will the next time finally break the back of this last remaining vestige of the 2009 bull market?

I find it fascinating how this particular trade set up works on all time frames.  I used it last week on an hourly chart that I sent out to subscribers that just nailed a mid-day reversal.  Here today, we see how it applies to a much larger time frame.  I have been using this trade set-up since 1995 and it works just as well now as it did the 20th Century.   For our purposes, giving us an edge for the next few months will have to do.


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Big Picture

As is obvious by now, I use my Trend Models to determine dominant trends and align my trading accordingly.  I also utilize Elliott Wave as a secondary perspective.  Both tools are prominently displayed in the following big picture SPX chart:

When it comes to Elliott, I use three sources for my analysis:

(1) Robert Prechter (and to some extent, his staff of analysts), author of the bible of Elliott Wave analysis and probably the world's preeminent EW authority;

(2) Advanced GET software which applies a mechanical, rule-based approach to wave analysis with the goal of identifying specific trade set-ups;

(3) Allan P. Harris, your author, advocate of common sense and simplicity, bon vivant,  and hopeless romantic who falls in and out of love like water swirling around a bath tub drain.

This weekend I will be sending out my big picture analysis in my Weekend Update to subscribers of my Trend Following Trading Models. All of the above described sources will be utilized for what is sizing up as a compelling juncture of trends and waves. 

Consider the above chart a head start on my analysis. 

It's not brain surgery.

Well, maybe it is.


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GS

Despite today's 200 point DJIA rally, GS looks terrible:

GS Daily Trend Model

GS 60m Trend Model

SPXU_240m Trading Model - Part II

Below is follow-up view of the SPXU_240m Trend Model. 

Two scenarios are operative. 

First, a retrace to trend line support before another leg-up. 

Alternatively, a breach of trend line support suggesting lower prices for SPXU and higher prices for equities. 

SPXU 240m Trend Model (7, 4.0)

SPXU_240m Trading Model

SPXU is a highly leveraged inverse ETF for the S&P 500. Below is my SPXU_240m Trend Model (low volatility settings) with year-to-date trading signals:

I like the 240 minute time frame as a bridge between Hourly and Daily time periods, working both as a confirmation of hourly signals and a heads-up for pending daily signals.  On the price axis, the navy highlighted price level of 34.57 is where the current LONG trend will flip SHORT. 

Disclaimer:  Trading is a tough game and is not for everyone.  These Trend Models are just one way to gain an edge in trading and that is all they are, an edge.  As simple as the application of  simple trend line  is to market directional analysis, execution and discipline are also key ingredients in this, or any trading system.  Again, I point to my own fallibility, i.e ignoring the NNVC Sell Signal at $2.03 on May 17 as an example of just how difficult trend following can be if you don't have the discipline to practice what you preach.  My answer to myself is that so what if I miss one gap-up by being out of this stock, the system will always get you back in for the remainder of the run.  To which I reply, but Allan, by exiting the stock you bank taxable gains which will bite you come tax time. My response to that, but when I buy back in I get a stepped-up basis.  To which I say, now this Disclaimer is longer then the original post.  Reply: You forgot to add that you are talking to yourself again.

Ergo: "Disclaimer."

A pause that refreshes

Here are a couple of short term trend charts that have just flipped LONG:

SPY 60 minute Trend Model

QQQQ 60 minute Trend Model

Only the nimblest of traders should be playing these, but everyone should be on alert for these models to flip back SHORT.  That would be a marker for the onset of a new leg down.  Today, tomorrow, next week, who knows?  Only if the 240 minute models follow with their own LONG signals would the bearish case need be re-examined. 

ETF Trends

Last week I posted examples of the Stock Trend Tables.  Below is my ETF Trend Table, although I've omitted the Reversal levels in deference to my subscribers who are paying for that information.  Again, you won't find perfection, but you will find some damn good trading:

Disclaimer:  Or you can just buy NNVC and go do something else for a couple of years.

On the road to a functional cure for AIDS

This is why I don't trade in and out of NNVC.  Everything still points to a paradigm changing  medical gift to mankind and we own it.  The last sentence says it all: 

“We are now a step closer to filing a pre-IND application for HIVCide™ with the US FDA,” said Eugene Seymour, MD, MPH, CEO of the Company.

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NanoViricides Reports that Antiviral Efficacy was Demonstrated Against Two Different HIV-1 Isolates in Cell Culture Studies, Corroborating Previous Findings in Animal Studies

WEST HAVEN, Conn.--(BUSINESS WIRE)--NanoViricides, Inc. (OTC BB: NNVC.OB) (the "Company") reports that its anti-HIV drug candidates demonstrated efficacy in the recently completed cell culture studies using two distinctly different HIV-1 isolates. The studies were performed in the laboratory of Carol Lackman-Smith at the Southern Research Institute, Frederick, Maryland.

This in vitro or cell culture study validated the in vivo anti-HIV activity of the nanoviricides® as determined in a SCID/hu Thy/Liv mouse model by KARD Scientific, a contract research organization, and previously reported by the Company.

Significantly, a subset of the anti-HIV nanoviricides tested in cell culture models at Southern Research had very similar activity against two distinctly different isolates of HIV-1, viz. Ba-L and IIIB. The Company had designed the ligands using reported gp120 structures of several HIV-1 strains.

The HIV-1 isolate Ba-L was the same as that employed in the Company’s previously reported animal model studies. This virus binds and infects cells expressing the human receptor CCR5 in addition to the well known receptor CD4. In contrast, HIV-1 IIIB is a CXCR4-tropic virus that infects cells expressing the human receptor CXCR4 in addition to the receptor CD4. The same viral gp120 or SU glycoprotein is involved in binding to both co-receptors, viz. CD4 and either CCR5 or CXCR4. HIV that binds to CD4 and to at least one other co-receptor, such as CXCR4 or CCR5, results in productive infection leading to disease, and eventually AIDS.

It has been a formidable challenge for researchers in the field to develop an anti-HIV drug that works against all subtypes and strains. Several anti-HIV drugs and drug candidates have demonstrated significant activity against only one of these various HIV-1 subtypes. In addition, HIV mutates, changing its genome and protein structure during an active infection. Mutants resistant to the patients’ treatment drugs can develop and proliferate, leading to failure of therapy, including the HAART regimen.

“We believe that our strategy of designing ligands that are close mimics of the invariant binding site on CD4 has resulted in nanoviricides that are active against multiple HIV-1 subtypes,” said Anil R. Diwan, PhD, President of the Company, adding, “The results of the Southern Research study suggest that mutations in HIV-1 may be unlikely to result in significant resistance to an anti-HIV nanoviricide.”

The Company had provided Southern Research with a panel of seventeen substances, including active and inactive substances. The Southern Research study was performed three different times on the same set of materials with substantially consistent results. The results confirmed that the previously demonstrated in vivo anti-HIV activity of certain nanoviricides was correlated with their in vitro anti-HIV activity.

The Company has previously reported that several of its nanoviricide drug candidates were more than 25 times (2,500%) superior to a three-drug HAART cocktail in a standard SCID-hu Thy/Liv mouse model study of HIV-I infection. In particular, treatment with only 150 mg/kg nanoviricides, as opposed to 4,200 mg/kg HAART drug cocktail (i.e. 28 times greater total dosage of HAART cocktail) resulted in viral load decrease that was equal to or better than HAART, and increased double-positive CD4+/CD8+ T cell counts that were equal to or better than HAART. The nanoviricides were equal or superior to the HAART cocktail in all parameters evaluated. Significantly, the nanoviricide treatment was given only during the first week in this six-week anti-HIV study, whereas HAART treatment was continued daily.

“We are now a step closer to filing a pre-IND application for HIVCide™ with the US FDA,” said Eugene Seymour, MD, MPH, CEO of the Company.

VXX

Here is an update on the Daily VXX Trend Model:

On the close-up below, notice how trend line support held prices on two occasions before VXX ran higher both times:

I've seen this trend line support work often enough to consider it a low-risk strategy.  In other words, for any symbol, initiating a trade in the direction of the major trend whenever prices retrace to near the trend line allows for an entry with a very tight stop, i.e. prices violating the trend line. 


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Kiawah dream

I don't know what to say about this, only that I first heard it years ago on a Sunday evening Kiawah Island bike ride, while listening to a weekly PBS radio show about Celtic music.  I knew at that first hearing of this song that it would haunt me, but couldn't imagine back then how, or why, or along what path it would find its way back into my Sunday night.

I did dream about Kiawah again last night and this time am having trouble shaking free.  Like so many of my ideas, thoughts and feelings, maybe posting it here will make some sense of it all.

AIG

Here is a trading chart of AIG, using low-volatility trend settings (7, 4.0) for longer-term trades:

8/5/09      BUY     22.00     +11.30     +51%

11/27/09   SELL   33.30     +6.28      +19%

2/10/10    BUY    26.92      +7.89       +29%

5/20/10    SELL   34.81       open        open

The most recent SELL signal was May 20th and with AIG closing Friday at 34.75, this trade has not taken off, not yet.  The AIG Weekly Trend Model did trigger its own SELL Signal on Friday's close, so this becomes an example of a fresh, actionable trade.  

The previous three trades averaged 33% gains, so at a minimum, I would expect a drop to about the mid-20's on this trade.  That estimate is pure speculation, but in crafting an option play based upon this signal, a projection like this can be helpful.  The other trades lasted about three months each, so that too enters into option analysis.  

Shorting the stock here is the cleanest, easiest play on this SELL, but, leverage does liven up the game.

Carnage - A Tradable Edge - NNVC

 Carnage

I sent out a Fibonacci 5 Alerts to my subscribers yesterday because the intraday trend model charts were all pointing hard down and finally getting in sync with the SPX Daily and Weekly Trend Models.  Here is a portrait of the dominant down trend:

That Sell signal came on April 27 at about 1183 on the SPX.  120 points lower, it looks like the real deal.  But you never know for sure, in other words, if it was easy, everyone would be doing it. 

A Tradable Edge

Whoa, not so fast Lone Ranger.  My experience tells me if it was easy, it would be dismissed by market players everywhere as too good to be true.  The past few days I posted excerpts from my Trend Tables.  Those weren't hand-picked examples of successful trades, those were 23 randomly chosen stocks, random insofar as I am lazy and those were easiest to crop off and excerpt, in all of their winning and losing ways.  Those along with the above SPX chart consists of the heart and soul of my trend following trading models. 

They are not the holy grail of trading, but they do constitute a tradable edge.  I have maintained from the beginning, you can't always get what you want, but if you try sometimes you just might find you get what you need.  That is what I tried to so tenaciously show off here over the course of the past five months.  I know some of you get it because I've saved your testimonial emails and others are slowly getting it because I've saved all of your most basic questions and then light bulbs going off too.  I learn from you just as I hope you are learning from me. 

Maybe its too early to call this Trend Following Trading Models experiment a success, if you were like me, heavily short into yesterday's carnage, you are getting the idea of how a tradable edge works and how much stress, angst and anxiety such an approach is able to expunge and turn into hard core profits.


NNVC

As for NNVC, here is the last few sentences of my Weekend Update, just sent out to subscribers:

My only exception to this rule [Respect the Trends] has been NNVC and you all know how well that stubbornness has paid off.....NOT.  Nonetheless, my reasons for buying and holding NNVC are as strong as ever and I have not sold a single share.  One of these days, from a beach in Hawaii, I will point with pride at this strategy before passing out drunk in the surf.  If you see me, please pull me back onto the sand.  Thank you very much.

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Trend Table - Part II

Yesterday I posted the last 10 stocks from my nightly Trend Table. Today I am posting the first 13 stocks from the same table.

First of all, notice that they are all not winners as perfection is not one of the hallmarks of a successful trading system.  But do note the preponderance of winning trades, which is a distinctive feature of a successful methodology. Also note the colors, blue means Bullish on both Daily and Weekly trends, red means Bearish and black indicates Daily and Weekly trends are mixed.

I excerpted the top 13 stocks because I wanted to include the five original stocks of the subscription service, AAPL, AMZN, BIDU, GOOG and GS.  My initial thought was that it only took a handful of stocks within an effective, systematic trading regimen to make significant returns.  I still believe that and the results from these five stocks are certainly consistent with the hypothesis.

But the Trend Models worked so well across the board I expanded coverage to make the service a little more universal and appealing to potential subscribers.  Along with expansion came more work for me each day after the close and a bit more confusion for first time subscribers.  With a renewal rate of well over 90% each month, I think its working.   

Thank you all for your continued support and confidence in my work.


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