Trading the Line

Hunting the Wren

"Many years ago there came to the Island a beautiful woman of the fairy people. She went all through the land, and wherever she appeared she put such enchantment on the men, by her beauty and her wonderful attractive powers, that they one and all left their work and their homes to follow her. When she had them all collected in this way, she led them across an apparently shallow ford in a wide river. She herself went across almost dryshod, but when her followers attempted the fording, the river rose in fury and drowned nearly all of them. Upon this the survivors, brought to their senses by the disaster, gave chase to the woman, seeking vengeance upon her; but she, laughing in mockery, changed herself into the shape of a wren and flew away. Some say that this particular wren was the first to be hunted, killed, and carried round for exhibition, others that the actual witch-woman escaped; but it is generally believed to be in memory of this event that the wren is hunted and carried annually."

– Wikipedia – the Celtic Tradition of Hunting the Wren on St Stephens's Day, the 26th December

–

The market continues to consolidate its recent gains with a slight downwards tilt. Still well above the Buy Signal line.

Merry Christmas everyone…

Be prepared for whatever is coming next, and trade with confidence:

To receive detailed daily analysis, guidance and the updated daily Buy / Sell trigger levels being generated by the Trading the Line system before the market opens, and intraday alerts when appropriate, please become a Member and Sign up for Alerts & Observations – includes access to Members Area and the Explanatory Notes for all of the concepts discussed.

Disclaimer: This is the diary of a personal trading system, its methodology and the signals that it is producing. You are welcome to follow along but please understand that the information presented here is for educational purposes only. No recommendations are being made to buy, or sell stocks, options or futures contracts. Please consult your own financial advisor before making any investment decisions.

Steve Rushton December 23, 2017No Comments

S&P500 daily update

New Dawn

A change of speed, a change of style
A change of scene, with no regrets
A chance to watch, admire the distance
Still occupied, though you forget

Different colors, different shades
Over each mistakes were made
I took the blame

Directionless so plain to see
A loaded gun won't set you free
So you say

We'll share a drink and step outside
An angry voice and one who cried
'We'll give you everything and more
The strain is too much, can't take much more

Oh, I've walked on water, run through fire
Can't seem to feel it anymore
It was me, waiting for me
Hoping for something more
Me, seeing me this time
Hoping for something else

– Joy Division, New Dawn Fades, 1979, (Bernard Sumner, Ian Curtis, Peter Hook, Stephen Morris)

–

The market rises into a second attempt at the recent all time high to mark an echo high on the Winter Solstice prior to the Christmas break.

With just a few holiday trading days left of 2017 – a truly amazing year – I will be taking a few days away from the market to reflect with gratitude upon the lessons that we have learnt, in preparation for the task of navigating through the next year.

Wishing Seasonal Greetings to all of my readers and subscribers.

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton December 22, 2017No Comments

S&P500 daily update

Yule

In the Northern Hemisphere we have the mid-winter Solstice – a time for celebration, relaxation and meditation on our place in the universe.

The market grinds away near the highs, displaying some resistance to the higher price levels and potentially defining some declining resistance from the high.

Today brings with it another scheduled echo high, and after an echo high we do have a tendency to see some weakness.

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton December 21, 2017No Comments

S&P500 daily update

Modraniht

A decline into the previous day's gap, which should ease some of the pressure of the higher prices and could perhaps initiate a consolidation phase at this level.

The Buy signal continues as price catches up with itself – note how steeply the averages are now moving.

As we have 2 small T structures combining strength, it seems sensible to consider them as a combination. The 2 lows are not dissimilar in price and at a similar oscillator level – we can consider this to be a double bottom – and so if we centre this structure on 03 November we can see some correlation with the previous peaks, and it projects high in early and late January.

Yesterday the market seems to have responded to the complacency as warned by the Put/Call ratios with some mild selling, and traders quickly respond with demand for hedging products as the VIX rises. Be prepared for more consolidation as traders lock in the profits at the higher levels acheived this week.

The market continues to look a bit dangerous and may need some really volatile days ahead to re-set the perhaps slightly over bullish and exuberant nature and reduce some of the growing pressure that the higher price range has brought.

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton December 20, 2017No Comments

S&P500 daily update

Radix

Another huge gap up and closed near the highs as the market continues to play catch me if you can and playing havoc with anyone holding short positions, as we edge closer to the upper extreme reaches of the channel.

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton December 19, 2017No Comments

S&P500 daily update

Expectation

Another gap up and go day – a signature of this relentless market.

Friday's development is a significant move up in the T volume oscillator – a one day 64 point rise indicating an overwhelming demand for the market, and taking the oscillator beyond all of its 2017 highs.

We should take note of this phenomena because this is potentially re-activating the very long cash-build up that goes right back to the oscillator high on 08 December 2016, allowing for the continuation of a much larger T structure that would support an advance to much higher levels. IF we need a reason for buying at these high levels, IF we still need to see the market as cheap rather than expensive, then this is the reason.

However, we should also be prepared for the counter viewpoint: the market is becoming increasingly unstable and dangerous, the daily range is widening, and we may be closer to a blow-off top now than we have been all year.

Only price action can help us determine which is correct, and the S/T signalling system is the only method that I have that will keep us on the right side of the market. As long as the market trades above the S/T Buy signal level we are (relatively) safe to continue Buying, if we close below that level we should protect our positions because the market is becoming (more) dangerous.

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton December 17, 2017No Comments

S&P500 daily update

Hope

Some mild profit-taking, in-line with the projection for an important high yesterday as the market struggles a little with 2670.

The T volume oscillator turns negative.

With the market still well above its averages, the buy signal continues for now, and some kind of consolidation and absorbtion of the recent price discovery seems likely.

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton December 15, 2017No Comments

S&P500 daily update

Man without a Master

The warrior code. The delight in the battle, you understand that, yes?
But also something more. You understand there is something outside yourself that has to be served.
And when that need is gone, when belief has died, what are you?
A man without a master.

– Ronin, 1998, Dir: John Frankenheimer

–

A token new high and some selling into the close, a pulse high.
And today we have another important projection for a high from the large(r) T structure and this could complete another sequence. As you can see, this blue structure has pin-pointed most of the important highs within one or two days.

However, momentum and breadth – indicated by the T volume oscillator – still look very strong, and the smaller structures continue to support a continued advance. We shall see if the shorter term structure and seasonal strength is enough to hold this relentless market up into Christmas.

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton December 14, 2017No Comments

S&P500 daily update

Dance Me

Dance me to your beauty with a burning violin
Dance me through the panic till I'm gathered safely in
Lift me like an olive branch and be my homeward dove
Dance me to the end of love

– Leonard Cohen, David Campbell, Dance Me to the End of Love, 1984

–

Another high as party girl moves higher, finding some resistance to the prices above the rising line but still looking very comfortable.

Today brings in a pulse high, and tomorrow we have another projection from the large(r) T structure from the late April momentum peak after the French election.

Relentless, aint it?

If you need to understand why, please go back and read September's Free Report – September Seventeen – which discussed the important Buy Signal that at that time revealed the potential of a very large T structure which continues to be active.

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton December 13, 2017No Comments

FREE REPORTS S&P500 daily update

Party girl’s got her shiny dress on

Welcome to the Trading the Line Free Report.

Party girl's got her shiny dress on
Look at those party moves
She's lookin' for a good time

She loves to dance and she loves the action
Wherever the party goes
She's lookin' for a good time

You're never gonna see a tear in her eye
Never see her break a frown
She's lookin' for a good time

The way she dances makes my world stand still
And she's spinning in the sky
Every move is like a psychedelic pill
From a doctor I can't buy.

– Neil Young & Crazy Horse, Psychedelic Pill, 2012

–

No looking back as the market grinds higher with another strong close at another new all time closing high. Strength in the T volume oscillator supports the continued advance.

Yesterday was in-line with a projection for a high from the red T structure, we have a pulse high scheduled for Wednesday and another peak projected by the large(r) blue T structure for Thursday.

Seasonal strength continues, and its difficult to see anything upsetting the strong upside momentum at least into the holiday period and the New Year. That of course maybe a pyschological target for many investors.

Keep one eye on the Osc oscillator which is gently declining, and allow the T volume oscillator to keep us informed of the under-current behind the market.

–

Apologies for the lack of special reports this Fall. I have been relocating, never easy but now complete.

So, shortly after the last report, we had a shallow pullback – a one day sell signal characteristic of this year – and the market rocked higher with its standard gap and go / catch me if you can type move – again characteristic of this year, paused briefly at 2600 and then shot up into the recent explosive peak which we are currently re-testing.

Save the image to your desktop to view a larger version

As you can see in the chart below, the T volume oscillator was in decline throughout the majority of the advance in October from 2500 to 2600. In T Theory terms this is called a cash-build up and is graphically defined by the line of lower highs in the oscillator marked in pale green. This is in effect profit-taking whilst the market continues to climb higher. You can see that the oscillator moves upwards through the cash-build up line just after the 15 November low. This defines that low as an important turning point and the market starts to use the cash-build up that goes back to the previous oscillator high – a new T structure has been formed.

Save the image to your desktop to view a larger version

Zooming out to the bigger picture on a weekly chart. As you can see the market has been playing catch up and accelerating higher towards the upper reaches of a defined channel since the 2016 lows. I believe that the current target may well be the previous trajectory – the long term rising trend line from the 2014 and 2015 peaks.

Interestingly, the quick sell off after the 01 December explosive high is in-line with the possible peak projection drawn from the super long range double bottom T structure. The bigger structures can have significant effect at their end points, like a tsunami cruising through the ocean almost unoticeably until it reaches its destination shore. Another projection should occur just before the Christmas break and this is easily accommodated by the short term structures which are also pointing to peaks at this time.

Save the image to your desktop to view a larger version

–

I wish all of my subscribers and my readers a very special and warmest Winter Greeting as we celebrate the shortest day at the Solstice and the festival of Christmas, and the turning of the Old Year into the New Year.

—

Be prepared for whatever is coming next, and trade with confidence:

Steve Rushton December 12, 2017No Comments

“Simplicity is the ultimate sophistication.”
Leonardo da Vinci

“Imagination is more important than knowledge”
Albert Einstein

“All of our days are numbered. We can not afford to be idle. To act on a bad idea is better than to not act at all because the worth of the idea never becomes apparent until you do it. Sometimes this idea can be the smallest thing in the world; a little flame that you hunch over and cup with your hand and pray will not be extinguished by all the storm that howls about it. If you can hold on to that flame, great things can be constructed around it; things that are massive and powerful and world changing. All held up by the tiniest of ideas.”
Nick Cave, 20,000 days on Earth

2026 Positions

(All numbers refer to SPX)

S/T SELL Signal at 6756 on 11 Mar

S/T BUY Signal above 6826 on 10 Mar

COVER Short Signal above 6792 on 10 Mar

S/T SELL Signal at 6765 on 10 Mar

COVER Short Signal above 6772 on 09 Mar

S/T SELL Signal below 6810 on 06 Mar

COVER Short Signal above 6822 on 05 Mar

S/T SELL Signal below 6822 on 05 Mar

COVER Signal below 6849 on 05 Mar

S/T BUY Signal at 6882 on 04 Mar

COVER Short Signal above 6849 on 04 Mar

S/T SELL Signal below 6845 on 03 Mar

COVER Short Signal above 6877 on 02 Mar

S/T SELL Signal below 6850 on 02 Mar

COVER Short Signal above 6857 on 27 Feb

S/T SELL Signal at 6857 on 27 Feb

COVER Signal below 6884 at 6857 on 27 Feb

S/T BUY Signal at 6884 on 23 Feb

COVER Short Signal at 6850 on 23 Feb

S/T SELL Signal at 6837 on 23 Feb

COVER Signal at 6864 on 23 Feb

S/T BUY Signal at 6883 on 18 Feb

COVER Short Signal at 6834 on 17 Feb

S/T SELL Signal at 6888 on 12 Feb

COVER Signal at 6915 on 12 Feb

S/T BUY Signal at 6899 on 06 Feb

COVER Short Signal at 6938 on 06 Feb

S/T SELL Signal at 6901 on 04 Feb

COVER Short Signal at 6915 on 03 Feb

S/T SELL Signal at 6915 on 03 Feb

COVER Signal at 6942 on 03 Feb

S/T BUY Signal at 6968 on 02 Feb

COVER Short Signal at 6938 on 30 Jan

S/T SELL Signal at 6910 on 30 Jan

COVER Signal at 6940 on 30 Jan

S/T BUY Signal at 6934 on 29 Jan

S/T SELL Signal at 6907 on 29 Jan

COVER Signal at 6934 on 29 Jan

S/T BUY Signal above 6905 at 6923 on 22 Jan

COVER Signal at 6849 on 21 Jan

S/T SELL Signal below 6894 at 6843 on 20 Jan

COVER Signal below 6925 at 6843 on 20 Jan

S/T BUY Signal at 6961 on 15 Jan

COVER Signal below 6934 at 6925 on 14 Jan

S/T BUY Signal above 6890 at 6900 on 05 Jan

COVER Short Signal at 6864 on 02 Jan

S/T SELL Signal at 6837 on 02 Jan

Mission

It has been my Mission to create a simple but effective method for investing in the stock market, so that I would always know what to do regardless of the circumstances.

The result is a rigorous system which allows the market to tell you what to do, when to Buy, when to Hold, when to Cover, and when to Sell, and it removes the need for you to have any opinion whatsoever.

And so, I present to you the diary of my personal trading system, and a record of the signals that it is producing. You are welcome to follow me along but please understand that the information posted here is for entertainment purposes only. No recommendations are being made to buy, or sell stocks, options or futures contracts. Please consult your own financial advisor before making any investment decisions.

Please sign up for my occasional FREE REPORTS and if you would like to find out more and receive my email alerts and more detailed observations, please SIGN UP HERE

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Reminiscences of a Stock Operator: Annotated Edition

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With new commentary and Insights on the life and times of Jesse Livermore Reminiscences of a Stock Operator is the fictionalized biography of perhaps the most famous financial speculator of all time–Jesse Livermore. This annotated edition bridges the gap between Edwin Lefevre′s fictionalized account of Livermore′s life and the actual, historical events, places, and people that populate the book. It also describes the variety of trading approaches Livermore used throughout his life and analyzes his psychological development as a trader and the lessons gained through hard experiences.

“In the end, I’m not interested in that which I fully understand. The words I have written over the years are just a veneer. There are truths that lie beneath the surface of the words... truths that rise up without warning, like the humps of a sea monster and then disappear. What performance and song is to me is finding a way to tempt the monster to the surface, to create a space, where the creature can break through what is real and what is known to us. This shimmering space where imagination and reality intersect... this is where all love and tears and joy exist. This is the place. This is where we live.”
Nick Cave 20,000 days on Earth

“If you're going to try, go all the way. Otherwise, don't even start. This could mean losing girlfriends, wives, relatives and maybe even your mind. It could mean not eating for three or four days. It could mean freezing on a park bench. It could mean jail. It could mean derision. It could mean mockery--isolation. Isolation is the gift. All the others are a test of your endurance, of how much you really want to do it. And, you'll do it, despite rejection and the worst odds. And it will be better than anything else you can imagine. If you're going to try, go all the way. There is no other feeling like that. You will be alone with the gods, and the nights will flame with fire. You will ride life straight to perfect laughter. It's the only good fight there is.”
Charles Bukowski, Factotum, 1975

>“The mind is a glass floor.
The mind is the spirit’s tear.
The mind is our prior and subsequent ghost.
The mind is the Bullion Express and the blood on the tracks.
The mind is a stone door.
The silver on the backs of mirrors.
The wave that defines the coast.
It’s what the drunk grave robbers couldn’t stuff in their sacks.
The mind is the sum of all and more.
The spasm between one and zero in the Calendar of Black-Hole Years.
The contract between the lash and the whipping post.
A quilt of dreams stitched with facts.
A meaningless argument among whores.
Rain that keeps falling when the sky clears.
A masquerade party, guest and host.
A candlelit landscape of puddled wax.
The mind is what thought is for.
The parking lot at the Mall of Fears.
The fire-pit for the piggy roast.
What the soul surrendered and won’t take back.
The mind is neither either nor or.
The real center of an empty sphere.”
Jim Dodge, Stone Junction, 1990

“The war is not meant to be won, it is meant to be continuous. Hierarchical society is only possible on the basis of poverty and ignorance. This new version is the past and no different past can ever have existed. In principle the war effort is always planned to keep society on the brink of starvation. The war is waged by the ruling group against its own subjects and its object is not the victory over either Eurasia or East Asia, but to keep the very structure of society intact.”
George Orwell

“There was a student... just the other day... who said that my problem, if one's nature is a problem, rather than just problematic, is that I see things in terms of victory or death, and not just victory but total victory. And it's true: I always have. It's either victory, or don't bother. The only thing worth doing is the impossible. Everything else is gray. You're born... as a man... with the nerves of a soldier, the apprehension of an angel, to lift a phrase, but there is no use for it. Here? Where's the use for it? You're set up to be a philosopher or a king or Shakespeare, and this is all they give you? This? Twenty- odd years of school which is all instruction in how to be ordinary... or they'll fucking kill you, they fucking will, and then it's a career, which is not the same thing as existence... I want unlimited things. I want everything. A real love. A real house. A real thing to do... every day. I'd rather die if I don't get it.”
The Gambler (2014), Dir. Rupert Wyatt