Trading System Signals on 03/07/2025 - CVIX

The CVIX (Capstone VIX) indicator is a tool to measure the amount of back-and-forth price action. We have not used this much since the pandemic. It is in the Portfolio Calculator and can be used as a filter to not trade when the CVIX is above a certain threshold on the previous day. Turning this filter on would reduce net profits as it misses some good days but it also reduces the drawdown on some portfolios. When setting the "DontTradeIf CVIX > CVIX Threshold" = 1 and the CVIX Threshold to 1, it would have "turned off" trading this week. This is not a new indicator but one we built about 5 years ago. This is a tool that is measured externally (in the Portfolio Calculator or Tradestation workspace) and then applied to trading the following day by manually turning off automation if CVIX is > 1, if this rule is applied.

In this format, it is not conclusive if it would be an advantage longer term to apply the CVIX indicator yet. More research related to which system work best with higher CVIX and intra-day analysis built into systems versus end of day analysis is the goal.

The pattern of lower highs continued for the stock indexes on the daily bars with a pseudo Key Reversal looking pattern on the daily chart, while the intra-day patterns are wide swing reversals with a lot of intra-day noise. The S&P 500 managed to close above its 200 day moving average and up on the day. There seems to be a universal bottom calling or trade for a bounce mindset. It will be interesting to see how the market trades next week. The market can always bounce high in a downtrend.

The balance of liquidity based on the difference between the sum of the massive monetary and fiscal stimulus since 2020 - 2024 and the limited monetary and fiscal stimulus looking forward could be a good indicator of the future trend in asset prices. When will the lack of forward-looking stimulus overtake the massive liquidity injections from the past 5 years.

The uncertainty of future policy has generated some of the most challenging price action we have ever seen. Trading small and focused right now can be a good approach when markets present more challenging cycles.

V-Reversal NQ had one of its more challenging days in awhile, losing on the long and short side. The long trade was too early. The short trade, well....we would have preferred a long signal here as Jay Powell spoke and his demeanor seemed to "calm" the markets, according to the talking heads on CNBC. If all the bulls have is, "Jay Powell calmed the markets by his tone" but didn't really say anything new, then: lookout below?

The One Million MNS and 250K Portfolios were around breakeven on the day working with Sibilance NQ and focusing on the long side later in the day.

The hypothetical results for the Stock Index Portfolio 10 was down -$10,750.00 per E-mini and 1/10th per Micro. We have updated this portfolio to remove the Chop II NEWS NQ and will use Open Range NQ instead. Updates will be sent out to subscribers for next week's trade. The hypotheticals are shown below. The new version of this portfolio was also down on Friday -$11,780 since Open Range NQ was down on the day and Chop II NEWS NQ did not trade. This new portfolio removes the over-active Chop II NEWS NQ that did poorly last Monday but still keeps TICK Chop NEWS which is correlated. We don't like to make too many changes as strategies go from hot to cold and visa versa. While we want to cut back on the methodology that TICK Chop NEWS and Chop II NEWS use, we only want to cut it in half by removing just one of these strategies.

Open Range NQ had a massive surge in hypothetical signals but is now on its 4th loser in a row (hypothetical signal). Open Range NQ hypothetical was +$11,765 on Monday but -$1,025 each of the following 4 days this week. It only takes one trade per day and is more of an asymmetric trading system that will cut losses at 50 points and let profits run to the close.

This portfolio is in a drawdown alert. Also, simply trading Gap Continuation 2020 (last signal on February 10) with V-Reversal is a simple "scaled back" combination.

The hypothetical results for the 50K Portfolio was -$1,492.50. We are working on some updates for this portfolio.

The hypothetical results for the NQ Two System Portfolio was -$5,225 per E-mini and -$522.50 per Micro. This portfolio has been one of our top performers and is in a $6,480 drawdown per E-mini out of a max hypothetical drawdown going back to mid 2019 of $21,410 per E-mini.

The hypothetical results for the NQ Five System Portfolio was -$5,225. We are adjusting this portfolio to remove Chop II NEWS NQ and adding Open Range NQ as the notes above for Stock Index Portfolio 10 apply in a similar way to this portfolio. The Chop II NEWS NQ did very poorly last Monday while Open Range NQ surged to new equity peaks. Chop II NEWS NQ could still also be traded for a bounce.

The Portfolio Calculator has been updated through March 7, 2025 trade date.

Stock Index Portfolio 10 and NQ Five System Portfolio NQ subscribers look for an update to add Open Range NQ.

We are in a very dynamic market environment with many adjustments the last several months. If this current environment is the "new normal" then there will be many more new opportunities that we will sync up with.