Trading System Signals on 02/05/2024

Today, we start tracking the 250K, 60 strategy portfolio for a drawdown entry alert. The hypothetical trading system signals were -$10,542.50 on the day. This sets us up for a drawdown entry alert with some volatility at the open so that we can begin live trading. This portfolio was at an equity peak on Friday. There is usually a little more to drawdowns than one day. A gap down or gap up with market internals moving much higher or lower at the open will typically give us some first hour volatility. If market internals and price are "even" from yesterday's close, it may be a good entry right at the open. Verification in my Portfolio Calculator as well as some of the latest V-Reversal research this evening to finalize this setup.

The Stock Index Portfolio 27 E-mini was down -$5,255.

The Stock Index Portfolio 27 Micro was (technical issues today with internet getting all results on multiple computers, will post later when I have it)

It was a V-Reversal day that was stopped out on longs on the way down and stopped out on shorts on the way up.

The V-Reversal III was down -$40, while the V-Reversal V was up +$50. It was a slow V-Reversal that did not trigger many signals on the new V-Reversal strategies.

The market internals continue to be much weaker than the Nasdaq and S&P represent. The Advance Decline line was -1835 at the close with a low of -2246 following the weakness we saw on Friday. Liquidity for the tech stocks, as NVDA continues to soar, keeping the Nasdaq and S&P at much higher levels than the broader market. V Reversals higher on Friday and again today.

The excess liquidity continues to generate up days or "barely down" days on what historically we have seen to be distribution days in the indexes. The market should have some more natural short selling opportunities for short term day trading and even swing trading, even in a strong bull market. The tape seems more interested in making sure the market always goes up and lacks the natural ebb and flow that we have seen historically.

The VIX also continues to trade in the same direction as the indexes on a daily basis - which is unusual while it is at unusually low average daily range levels for an extended period of time. The VIX was down while the indexes were down today. The Nasdaq futures was down -0.19% while the S&P futures were down -0.42%. The Russell futures were down -1.37%. This inflection point of market internal weakness while indexes looks strong, continues to stretch. The broader market will eventually catch up or the strongest tech stocks will roll over for at least a small correction.