Trading the Line

Way to go

S/T Buy Signal re-confirmed with move out of the chopshop and congestion of the past few days, and the rise in the T volume oscillator confirms the possibility of a small T with potential into the end of the month.

The conflict of course is the arm of the larger T structure that expired yesterday, and a cluster of scheduled highs today into Friday, and so it remains to be seen whether this has a major or minor effect – a turnaround or a choppy grind higher.

Be prepared: To receive detailed daily analysis, more clarity and explanations, larger images and the updated daily Buy / Sell trigger levels being generated by the 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 Explanatory Notes.

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 January 25, 2017No Comments

S&P500 daily update

Chopshop

Straight back down and playing with the Sell Signal level, for another bounce, maybe short term.

We've been here before and this is what seems to happen when the short term channel combines with the the mid-channel area – the market forces become too stable and therefore directionless, lets call this phenomenon Chopshop.

Of course, this phenomenon is also a squeeze in the making.

So watch out for an exit from the mid-channel sometime soon – above 2277 or below 2255 for signs of a strong directional move.

Steve Rushton January 24, 2017No Comments

S&P500 daily update S&P500 signal

Weak Buy Signal

Buy Signal triggered in early trade at 2274, but quickly under threat from descending resistance.
Held above important support but triangulating now, outsized move coming up soon.

There is the possibilty of some follow through into several scheduled peaks early next week, but it does seem likely that there is a significant correction coming soon.

SKEW remains elevated indicating the prescence of fear and possibility of an unexpected event, a black swan.
I suspect that this is related to comments regarding the strength of the dollar.
Keep an eye on this – it is flashing a big red warning.

Steve Rushton January 20, 2017No Comments

S&P500 daily update

January Expiration

Market takes the hint from the high SKEW and preps for a possible move to 2250 for expiration.
A rapid build of put open interest at SPY 225 yesterday creates a potential magnet and a floor for a bounce if it holds, or an edge for a more severe sell off to occur if it breaks.

Notice that we are potentially holding a support angle, and we still have a cluster of sheduled peaks to negotiate for early next week.

Steve Rushton January 20, 2017No Comments

S&P500 intraday update S&P500 signal

Cover Signal at 2263

Another probe into the shortside.

After the bounce off 2259, the market is looking like maybe it will recover above the buy cover signal line of 2265 again.

Echoes of late August again.

If we hold onto 2265 into the close the Buy Signal is still active, if not we cover the long signal.

—

Cover at the close of 2263

Steve Rushton January 19, 2017No Comments

S&P500 daily update

Margery Daw

See Saw Margery Daw,
Jacky shall have a new master
Jacky shall earn but a penny a day
Because he can't work any faster.

A quiet see saw day resolved upwards…
But under the hood – VIX up, market up, which is unusual, and means that one is probably wrong
and SKEW up significantly into the perceived risk area (above levels prior to Brexit and the Election) meaning that OTM options have been rapidly bid upwards by market makers and bankers – and they are in the business of assessing risk.

Interesting…

Steve Rushton January 19, 2017No Comments

S&P500 daily update

Over the shoulder

Again close to a cover and sell signal, but held above the Buy trigger line into the close, showing that the market is still reluctant to sell off. However we have now broken down through the important rising line from the pre-election low and this is certainly a warning.

We have another projection for a peak next week on the 24th, followed by 2 cycle highs shortly after, suggesting the possibility of a recovery and climb back up the underneath of the rising line before one look back over the shoulder and kissing goodbye.

Steve Rushton January 18, 2017No Comments

S&P500 daily update

MLK

“The ultimate measure of a man is not where he stands in moments of comfort and convenience,
but where he stands at times of challenge and controversy.”
– Martin Luther King Jr.

The market continues to process the 2275-8 horizontal resistance line and reaches the next important arm of the T structure (from the secondary peak of August 23), and at the same time holds above the rising gann line and the averages.

We remain vigilant as warnings and echoes of impending failure are sounding.

Be prepared: To receive detailed daily analysis, more clarity and explanations, larger images and the updated daily Buy / Sell trigger levels being generated by the 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 Explanatory Notes.

Steve Rushton January 14, 2017No Comments

S&P500 daily update

Black cat

Another black cat day (deja vu) with a bear trap as the market clings onto the rising line and refuses to let go, for now.
Very reminiscent of the breakdown period in late August last year and therefore suggesting that the power of the T structure is now over.
Maybe a little more strength into the holiday but risk to reward on the upside is looking poor, and it now seems a waiting game for the bears.

Momentum falling again and both oscillators are negative adding to the warnings.

Be prepared: To receive detailed analysis, more clarity and the updated daily Buy / Sell levels being generated by the system before the market opens, please Sign up for Alerts & Observations – includes access to Members Area and Explanatory Notes

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 & 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.

Steve Rushton January 13, 2017No Comments

FREE REPORTS

Mr Market in warning zone

Well, after yesterday's relief rally in the afternoon, Mr Market still aint happy and we are back in the warning zone.

My thinking is that we may need to expect some severe chop around here, as we are breaking through an important line. The bulls will defend this for a bit, maybe try to ride it back up and kiss goodbye later.

From referring back to the T structure, this period relates to August 23-25 and this is when the previous Bull move started to break down, had a few attempts to continue and then failed. Its uncanny that we are seeing potential failure of the rising Gann line at the same point left and right of the T, and is suggesting to me that the real power of the Trump T Structure is now over.

I was looking for a fuller explanation for the current weakness and have found that the 'mega T structure' from early 2016 (the big double bottom) is probably still having an effect as you can see that long range waves from the March and February 2015 period end at approximately mid December and early January.

As we are breaking through an important rising Gann line and potentially at a Sell Signal level this would give credence to an earlier sell signal than previously expected, but unfortunately it would also explain another lengthy choppy and frustrating period with multiple false signals similar to July and August.

Expect increased volatility that is not currently priced into the market, and with the low vix and cheap options that may be the best advice for now.

Be prepared for whatever comes next.

For more detailed ongoing analysis of the developments in the S&P500 index on a daily basis, please Sign up for daily Alerts & Observations – includes access to Members Area and Explanatory Notes.

Steve Rushton January 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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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