As of 3:22 p.m. EDT, we are 100% long both the Dow 30, and 100% long SPX. We are using mini Dow and DIA calls, and, e-mini and SPY calls. This trade should last till Tuesday at approximately 3 p.m. Appropriate stops are in place, in the form of 2-3% trailing stops.
Market Timing As of 4 p.m. EDT, our stops were hit and executed on the option positions. The futures' stops were also hit and taken off. We are 100% in cash at the close of trading. This losing trade is a great example of how one can lose money when the market does nothing much - "he bled to death by a thousand paper cuts." Our next time locus for a tradeable intraday turn is tomorrow, Tuesday, after 3 p.m.; Wednesday is also another time locus. The weak action is to be expected after such a steady multi-day decline. We still project a high in the S&P emini at 1209 to 1212 range, Tuesday or Wednesday. For purposes of this journal, we will stay in cash till we get a sell signal at those potential highs. We will update this alternate scenario at tomorrow's close. Here is a brief look at it: The indexes decline weakly into the next time locus points this week. Then attempt to rally into option expiration week, but fail, which begins the final drop into October 24th. Good trading and God Bless. WB
<b>Timing Market Turns</b> The time loci are listed below for the next few days. These are generated by proprietary algorithms that were "fed" 30 minute S&P 500 and Dow 30 price and volume data that was preprocessed by another personally developed technique. We are not likely to trade tomorrow, even though we believe it will be an up day. We will consider a trade under a near perfect setup if it shows itself. Some will wonder how we have volume for S&P 500. It has to be collected. It's a challenge but it can be done. Note: This is for educational purposes and curiosity of what we see beforehand. There are many more parameters that weight each individual locus. We give no indication with this list of any weighting or focus, or whether they should be considered lows or highs. Hopefully this will answer some questions PM'ed to me. Reliability is advanced by multiple hits in the data runs, and those are also not indicated here. <b>Time of day locus points-</b> Week â beginning Monday, October 10, 2005 (these times are for 5-minute bars beginning at these times) Tuesday- 9:30 10:10 10:30 10:50 11:00 11:05 1:55 Wednesday- 2:50 Thursday- 11:00 Friday- 1:00
Are your locus points derived from some technical indicator or from years of market observation? eg. someone uses the number 15 and 15 day counts on the nasdaq to get its turning points. something derived from years of observation.
We all wish it were that simple? What makes the system challenging to use with just barren intraday locus points is attempting to decide whether a an array of loci around a time of day is meaningful. As in the question of 'what happens next?' Using an ordinary momentum or trend strength indicator would likely show the way when the index showed itself ready to move, one way or another. Objective observation - The 11 am array indicated to me that the range bound aspect of the 20 minutes spanned by the array of loci, and the volume hinted that the likely direction was continuation downward. The other item to separately observe is: where is this small portion in time located in the overall structure of this particular move off the morning high points. To me it looked like a pause before the low of the move, which ended inside the 12:20 bar. Similarly, the same conditions existed at 1:55. My view of today's (Tuesday) intraday is the same as most any FOMC day. I call them "FED Charm Days". The Fed takes a normal day and beats with its magic announcement wand. The hordes scatter hither and yon carrying their version, meaning and implication of the Fed's Charming announcement. Then, after a time, preceding conditions resume - today, and for several days, it was resumption of the downward. But Fed days often have a core pivot that they frequent. Today it was 1188, wasn't it? With the array arresting the action on the 1188 pivot, one could ready either a long or short scalp when the range was broken and confirmed. Hope that gives an understanding of what to do with that type of data. Often it is not so apparent. Good trading and God Bless. W. B. Busin
Market Timing Looking for a signal to sell in this squeeze- both futures and options, position size trade. Good trading and God bless. W B Busin
Market Timing No trade executed. Barren time locus points after the open on Thursday might offer better opportunities. Thursday - 9:45 10:00 11:00 I will update later after final settle data is in, if anything worth looking for shows itself. Good trading and god bless. W. B. Busin
Market Timing - 10/12/2005 The most important event today was the closing of the gap that was opened on May 18, 2005. Whether support can be firmed up for a 1-3 day rally should become evident in Thursday's session. One of the better general counter-intuitive indications of changes within an index are the balances of calls and puts, and their trade volume. We don't believe too much in prescience of the raw data series of Total Put Call Ratio. But, it does have some forewarning value of what the "usually wrong option traders" are doing. The extreme points of this data series grade out higher than the less extreme points. Sentiment becomes a significant factor in prolonged trending moves. It can confirm the continuation, or indicate a weakening or even a reversal of trend is upon us. In the general scope of curiosity, I have included a chart of the Total Pull-Call Ratio over the SPX cash index. We will be looking for trend reversals tomorrow that confirm early in the move. We will also be watching for a breakdown and trend continuation. We are still in cash. Good trading and god bless. W. B. Busin
Today, Thursday, October 13, 2005, I expect 4 to 6 good intraday swings for day traders. All times converted to E.D.T. Additive to the above listings- 5 minute bar loci : 9:30- low of sharp opening rise 9:45 or 9:50- peak of that rise 10:00- a low in the ensuing drop 10:25- the low for the morning session 10:40- 11:00- first high and accomplishing at least 50%, up to 62% of the run to the day's high 11:45- expecting the morning high here, before a retracement 1:10- a difficult one here; if it is a low that follows a run of more than 10-12 points from the morning low, then I expect a slow grinding effort to make a new high. If it is a high at the end a 5 part structure, I would deem it a strong sell point - assuming within trade setup parameters. 1:40- a likely place to sell if structure indicates some finality, or overbought condition. Check for a subsequent rally possibility, if this only the 1st or 2nd peak above the midday low. As I stated previously, we are expecting a 1 - 3 day rise, and with some patient observing, will be looking for a short entry. Remember that our goal is to arrive at October 24th with more low risk dollars to lay on a sizeable core position for the next 6 months. The above is just my own opinion, and should not be used as anything other than my own expression of free speech. Good trading and god bless. W. B. Busin