Trading System Signals on 03-12-2026

The stock indexes propped up the morning lows most of the day but the market was finally able to trade below the morning lows before the close. It was a choppy slow-motion selloff that favored short selling trend strategies.

One of my favorite scenes in The Big Short was when Goldman Sachs called Michael Burry, played by Christian Bale, reporting his position on the swaps. He then suggests to the Goldman rep that the price has finally moved in his favor now that Goldman is positioned in the same direction, suggesting market manipulation. I don't anticipate that we are about to experience another massive bear market but the inability of the market to have a normal correction lately has generated a very congested market environment. The excess institutional liquidity accumulated since 2009 has certainly blurred price discovery and has generated a more one-sided market with fewer corrections that are more shallow and much quicker to recover when they do occur.

After Monday's low to Tuesday's high of 1200 points in the Nasdaq futures, it certainly felt like the target was new all time highs with another 1200 points. Today, the 3:15 pm CST Nasdaq futures close was 459 points below the 25,000 steady state price we have seen so frequently and is 541 points from the session lows on Monday.

Yesterday, there were some short signals positioned to profit with further selling but the propping in yesterday's market and the fact that we close our positions at the end of the day, limited our gains. This image represents a market position trader with several shorts closed out at the end of the day, followed by selling in in the overnight session.

Today, we had a similar scenario where the market did sell off into the close but with very little follow through from the early morning lows.

This represents a small amount of momentum and a larger sell off tomorrow would contribute to a more normal market cycle.

The trend strategies did well on the short side today. We have not seen a cycle of short selling trend strategies do well in a while. It would make sense in the market cycle to have another 10% drop here with short selling day trade trend strategies capturing the move. Mean reversion of market patterns as well as direction is what we have observed in the markets.

Cobra III 2022 and VSD Trender were the top two shorts in the Seven System Portfolio today.

The VIX closed on its highs today in the 27 handle.

Tomorrow will be interesting since it is a Friday with geopolitical news uncertainty going into the weekend. Will the stock indexes return to steady state prices (NASDAQ 25,000) or will the market finally take a break and give up a normal pullback and take out the lows of the week, month, and year.

A "big picture" frame work always helps me when trading a list of short term algorithms.

Hypothetical Trading System Signals on 03-12-2026

27 System Portfolio NQ = +$510

Diversified Portfolio 57 (NQ Only) = +$5,305

Seven System Portfolio NQ = +$1,630

Stock Index Portfolio 37 = +$5,305

Stock Index Portfolio 18 = +$3,890

Two System Portfolio NQ = -$1,430

Silver Portfolio = update later

50K Portfolio (Micros) = update later (without Gold and Silver)

SR Breakout NQ was positive today on the short side after a losing streak and is a single strategy setup that is in a drawdown entry alert.

SR Breakout NQ is available in Tradestation, NinjaTrader, and Multicharts. It can take long and short trades.

SR Breakout NQ

3/13/2023 - 3/12/2026

$25 Round Turn Slippage and Commission

Hypothetical Performance Summary

The red arrows indicate potential drawdown entry alerts.

Past performance is not indicative of future results.