Trading System Signals on 01-29-2026 Drawdown Entry Alert

Market theory tells us that the longer the tension, the bigger the breakout. Today it felt like the start of one of one of those big moves in our favor. The stock market feels a bit broken from the perspective of such tight containment and constant recoils in spite of the headlines and the price action in many of the other markets.

There seems to be an infinitely liquid source that continues to prop up the stock market. We have taken advantage of this many times with V-Reversal, especially in December.

Overall, this constantly recoiling market environment in January 2026 has been one of the more challenging market environments I have seen in a long time for many strategies. I find the price action to be really different and unusual this month. There continues to be no follow through on many signals that have been robust for a long time while the metals have gone crazy and completely dismissed by Wall Street and the Federal Reserve. We continue recommending "trade small or not at all" right now while we observe and adjust to the market environment that is extremely contentious.

One way to trade small is the Two System Portfolio NQ.

The Two System Portfolio NQ had two losses today, the first on the long and the second on the short. In addition to the strategy being challenging, the execution had some extreme slippage of more than 15 points in live trade since the stop loss was near a 250 divisor of 12,750. With that sort of slippage, you would anticipate continued lower prices. The rebound in the market did setup a nice short near the 50% Fibonacci retracement but the market continued its reversal higher instead. Yesterday's earnings news dropped the market. Today, it rallied ahead of earnings It was a challenging day with two losses and some larger than normal slippage.

The losses today generated a drawdown entry alert for the Two System Portfolio NQ. This portfolio has been on a hot streak since mid-November. It is currently in a 6K drawdown.

A drawdown entry alert is not an exact turning point but gives a good initial entry or a good place to start trading the portfolio, or for existing traders wanting to add contracts.

The Diversified 57 had some nice short trades that were setup to do well after some initial long trades were stopped out. This portfolio was up on the day in the early trade, but the afternoon reversal really worked against us. There were 11 trades with 2 winners and 9 losers. With a low winning percentage and extra slippage, the frustration can add up on days like today. We try to focus on the rebound cycle. Tomorrow is Friday and the last trading day of the month, we may get more of the same or we may get some resolution in the market direction with a larger more tradeable move. There have been many Fridays that have delivered some favorable price action after a losing streak.

The hypothetical trading system signals for 01-28-2026:

Diversified Portfolio 57 (NQ Only) = -$13,050 (with approx -14,200 in live trade based on the additional slippage)

Stock Index Portfolio 37 = -$9,000

Stock Index Portfolio 18 = -$13,050

Two System Portfolio NQ = -$3,380 (with approx -3,800 in live trade based on the additional slippage)

Silver Portfolio = +20,525 (3 winners, 10 losers) mainly gains from Silver MR1

50K Portfolio = will update later this evening (without Gold and Silver)

I am working on some research that looks at some of these latest more active reversal patterns and developed one that trades chop based on the 11 am EST close. This only works well the last two months though.

Silver MR1, after a massive losing streak was up 32.8K today. It was up over 60K at its peak. This is a day trade strategy and a market that should be "hovered over" constantly while in any trading positions and for experienced traders only. Stop losses and market orders will not work most of the time so it requires quick order book work at the limit orders. We have officially removed Gold and Silver from the portfolios for now for these reasons and there has been mostly a constant sting of losers with such tight stop losses in the expansion of daily dollar ranges.

All other Silver strategies in this workspace lost today.

Silver does give you an opportunity to trade a strategy that has a tight stop with the potential for a big move, but can be stopped out easily as well.