The original thread is here: http://elitetrader.com/vb/showthread.php?s=&threadid=279598&perpage=6&pagenumber=7 These two indicators were generated during my own data mining process, by combining and manipulating a number of parameters. Based on the attached updated chart, this uptrend still has legs. The black crayon line is when the indicators gave the buy signal. Some fairly accurate signals were given in the past as well.
With regard to the ES (S&P), price broke the range low last Thursday and that made the 50-day EMA the key dip to buy. If you bought the range low last Thursday, would your system implement a very tight stop loss or a wide one beyond the 50-day EMA? If I transported my day trading methodologies to swing trading, I'd have used a tight stop, then looked to re-enter off the 50-day EMA. In a well-defined uptrend, buying any dip without a stop loss works fine...until it ends, LOL!
My indicators are along the line of market breadth/sentiments, so at least you got something that is independent of most indicators that are derived from price changes, including moving averages, MACD, RSI etc.. My system also gives topping signals, most of the time a bit ahead. You are right, it is a bull market and that may be why my topping signals are not as good as the bottoming signals. I play spy options, so my risk management is probably very different from somebody playing stocks.
=================== Bull market trends last longer than most think[including me] + i study trends a lot. SPY is a real old uptrend; it may get older, some men live past 107 years Some teens die @17. Wisdom is profitable to direct.
Point well taken. My purpose of posting these charts here is to discuss the best way to use these indicators, and establish a track record of real time market calls.
Updated intraday chart. Uptrend intact. BTW I wonder if there is any other website more appropriate for such discussions? Is this website mostly for day traders? I also posted a question on option trading in the option forum, no response. If anybody has any suggestions, you can PM me, appreciate it.
updated intraday chart now the uptrend looks a bit old, with the blue indicator spiking up quickly. but it is a very early sign of possible local top coming. wait and see.
updated chart as of eod 12/24/13 the blue line just spiked above 20, which is a sign of precaution. but it does tend to be a bit early in predicting a local top, I wouldn't flip to short side just yet.
attached are hypothetical trading results since this April until eod Dec 24, 2013. if short signals were set as: blue indicator spikes above 20, then drops below 10 and long signals were set as: red indicator spikes above 20, then drops below 20, a total of 764 points in profit would have been made when SPX made a 246-point advance. A total of 14 trades in 8 months with only one losing trade on the short side, which had a loss of less than 8 points.