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Trading System Signal on 01-19-2024

The website was reset over the weekend and this is an updated post on Monday January 22, 2024 for Friday's trading system signals. The new website will be easier to navigate and more efficent for my communication with subscribers and website members. A lot of content is still being updated. Logging in and password resets as well as the daily reports will be easier to view. The initial goal of making a website with easier communication while keeping the specifics of our trading content available to our members instead of public (youtube) is "still in the works". I use the website to help me keep track of my content and records, so it is quite important! Send any feedback you have on the ability to login, password resents, or viewing the content in general. 


Friday's report (01/19/2024) realeased on Monday (01/22/2024)

The Portfolio 50 that we released last Friday (01/12/2024) made new hypothetical equity peaks. The hypothetical results for the portfolio were +12.6k on the day. The hypotheticals on the week were + $7.1k, had we traded the whole week. It would have been a perfect week to miss the losing streak of Tues-Thurs and then enter perfectly to only capture the gains on Friday. I was pretty upset this weekend to miss the move since we were so close to our drawdown entry point. Its critical after the need to make so many adjustments in an unusual market (low VIX) and ever-changing environment to get a good entry point.


The confirmation of new equity peaks is great and what I want to see after having to make so many adjustments in a low VIX market that has inverted some of the patterns. It's given us some really good feedback on how to trade a market that changes VIX levels quickly. I am looking forward to updating the Portfolio Calculator with some new and really good V Reversal strategies as well. The percent return over drawdown is the highest I have developed for the portfolios. I am optimistic and confident and looking forward to entering on a hypothetical drawdown and getting some out of sample performance.

 

The markets have been really choppy at the open and a typical first hour chop would give us a good entry on Friday's trade. On Friday, there was no drawdown at the open to give us the entry point that we need based on the strategy we were working with and part of the strategy that has helped us weather much worse drawdowns as part of our risk management. This strategy allowed us to miss 70-75K drawdowns (the Stock Index Portfolio 34 that we paused in September 2023), by waiting for a drawdown to start live trading, in order to limit our risk. We have endured a series or regime changes and lower VIX ranges and less day trade opportunity in general and are optimistic about synching up with the market based on what we are "learning" as we see the new patterns develop.

We have to keep it in perspective. In trading, the same approach that helps you cut loses, will sometimes also miss big gains, but will improve your profitability longer term by recovering from drawdowns more quickly.

 

Gap Continuations have been getting slammed the last 6 months. While I anticipated this move higher, I was surprised to see it happen on a Gap Continuation. I was also surprised to see some other micro patterns in the market that we witnessed on Friday. The Advance Decline line was slammed from +1000 to -1000 in the first 15 minutes. That has been a good short 80% of the time in the last 7 years. The liquidity is looking for strong sell signals to buy and even going up overnight or intraday in some big moves on neutral market conditions that don’t typically signal long or short trades. The NYSE TICK is typically much stronger than it has been based on the point moves we have seen since November 2023. This is a low VIX stealth bull market based on market internals and typical intra-day signals (not daily chart).

We are up about 1k in live trading this month after enduring quite a bit of chop during the first two weeks and then adjusting the portfolio.


We will wait for another 10K drawdown intra-day, in the latest portfolio. The 10k drawdowns are frequent and can be typical after an equity peak. The commodity portion is due for a drawdown as well. We take into account, Gold, Silver, Crude Oil, and Natural Gas markets in this portfolio and not just stock indexes. We also have several new V-Reversal strategies we are testing to potentially update in the stock indexes and other markets. 


​The VIX traded higher this week in general.


Bonds have also been down with interest rates higher (which is bearish). The markets are reaching for all-time highs as we anticipated but the intra-day patterns and market internals are "trickier" than what we typically see. 


The Stock Index Portfolio 27 was up +$11.2K to catch a massive bounce off a drawdown level. The Micro Stock Index Portfolio 27 took the same trades and was up +$1120. I will be working on adjusting these and sending out the V Reversal updates.

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