Trading the Line

From a Lion’s roar

Since the 01 March high in the S&Ps, we have seen a series of lower highs, and lower lows with strong bounces that have been sold into – marking out a defined downward channel.

So far the selling has been relatively mild, in comparison to previous corrective periods, but more and more it seems that the market is at an inflection point, and the obvious question is: is about to get unpleasant?

Lets have a look at the bigger picture:

The market has been trying to hold onto some strong rising support lines, whilst at the same time acknowledging a descending resistance line and this produces a triangulation. Triangulations are squeezes – direction uncertain.

We could make comparisons with the September 16 period, or alternatively with the May 16 period. It seems quite usual for the market to test a descending resistance line 3 or 4 times before making a firm decision whether to break it or rollover.

The very large T structure which still seems to be dominant – from the January-February 2016 double bottom projected a series of price highs from right back to the November and December 2014 highs to the recent highs. Before the November 2014 highs, the previous low was at a comparative level to the 2016 lows and so this T structure should be complete now. This could well explain the current lack of buying power in the market and could certainly produce some lower lows in the near future, as the market looks to re-charge itself.

The same T structure also projects an Echo low in the April 19-22 period, which remains to be seen.

We can also see that the buying surge at the Election low has produced a long line of shallow lower highs in the oscillator which we can describe as a cash-build up line, marked in green. When we get a buying surge that cuts through this line, we can draw the next large T structure. Of course, we may need to go down first in order to get the bounce required to break up through this cash build up.

We watch the oscillator for clues, but we use price as the leading indicator.

Be prepared for what is coming next.

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Steve Rushton April 8, 2017No Comments

S&P500 daily update

On reflection

“Meditation on inevitable death should be performed daily.
Every day when one’s body and mind are at peace, one should meditate upon being ripped apart by arrows, rifles, spears and swords, being carried away by surging waves, being thrown into the midst of a great fire, being struck by lightning, being shaken to death by a great earthquake, falling from thousand-foot cliffs, dying of disease or committing seppuku at the death of one’s master.
And every day without fail one should consider himself as dead”

– Yamamoto Tsunetomo, Hagakure: The Book of the Samurai

Holding onto support on the rising angle, trying to make a Buy Signal but selling into that strength again.
Very much within the chopshop zone oscillating between support and resistance, and on reflection waiting for the next catalyst.

The market continues to wind and coil in a strong triangulation pattern building a significant squeeze which when released will produce a dramatic movement (either up or down) and although the momentum (and risk) at the moment seems negative, the T volume oscillator is still hinting at a positive outcome.

Be prepared for whatever comes next:

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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 April 7, 2017No Comments

S&P500 daily update

To a thunder clap

An S/T Buy Signal at the gap up open and straight into the strong descending resistance line at 2376.

The 2pm FED related panic move down, cancels that signal out and places a nervous market at rising support and if we are moving lower, we are back on a Sell Signal.

Dangerous market conditions.

Be prepared for whatever comes next:

Steve Rushton April 6, 2017No Comments

S&P500 daily update

From a rainstorm

“There is something to be learned from a rainstorm.
When meeting with a sudden shower, you try not to get wet and run quickly along the road.
But doing such things as passing under the eaves of houses, you still get wet.
When you are resolved from the beginning, you will not be perplexed, though you will still get the same soaking.
This understanding extends to everything.”

– Yamamoto Tsunetomo, Hagakure: The Book of the Samurai

Testing the Short Signal level once again but still within the chopshop zone and acting accordingly.

So long as the recent low holds we might expect to see some kind of grind away higher towards the descending resistance within the right-hand side of the small T structure.

Be prepared for whatever comes next:

Steve Rushton April 5, 2017No Comments

S&P500 daily update S&P500 signal

April Fool indeed

A Sell Signal generated in early trade but support found at 2345 – just above the rising angle from the most recent low – and a recovery into the afternoon cancelled out the Sell Signal, for now.

We are very much within the dangerous chopshop zone – where Sell Signals become Buy Signals and vice versa – and we should expect more chop in the days to come until the market makes a strong exit one way or another.

The T volume oscillator turns negative, flashing a warning signal, and weakening the current small T.

Be prepared for whatever comes next:

Steve Rushton April 3, 2017No Comments

S&P500 daily update

April Fool

Market finds repeated resistance at 2370 and equivalence at the Mid-channel.

Too much stability here leads to choppy days ahead as the balance of forces become too equal.

Be prepared for whatever comes next:

Steve Rushton April 1, 2017No Comments

S&P500 daily update

First quarter

Market heading up into potential resistance as we recover the majority of last week's gains, and a bit of a wobble or failure between 2370 and 2380 would seem likely (but not necessarily required) as we round off the first quarter and look forward to some April Fools.

Be prepared for whatever comes next:

Steve Rushton March 31, 2017No Comments

S&P500 daily update

Like sugar and spice

Market relaxing into the feel of things.

T volume oscillator makes a significant move higher above the zero line, adding additional credence to the signal and to the new T structure.

OSC oscillator looking like its turned and close to a OSC Buy Signal indicating that momentum looks up.

Be prepared for whatever comes next:

Steve Rushton March 30, 2017No Comments

S&P500 daily update

Like butter baby

And so the market powers back up through the previous layer of support / resistance to make an S/T BUY Signal and the Bull defends the important rising trend line off the previous highs.

Of course such a strong move up into an area of potential resistance may need some working off, and there is a scheduled pulse high for today, but yesterday's strength in breadth in the T volume oscillator has cut through the cash-build line from the 2400 peak and this confirms the prescence of a small T structure, projecting highs in April.

Be prepared for whatever comes next:

Steve Rushton March 29, 2017No Comments

S&P500 intraday update S&P500 signal

S/T Buy Signal at 2354

Market pushing away at the averages and above 2354 and assuming that it can hold onto this level we are back on a Buy Signal.

Keep an eye out for hints of a reversal and hedge your risk accordingly.

Steve Rushton March 28, 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 BUY Signal at 7413 on 30 July

...

S/T SELL Signal active below 7462 st 7440 on 26 July

COVER Signal below 7522 at 7440 on 17 July

S/T BUY Signal at 7398 on 29 June

S/T SELL Signal active below 7344 on 26 June

COVER Short Signal above 7361 on 25 June

S/T SELL Signal below 7422 on 23 June

COVER Signal below 7452 at 7365 on 23 June

S/T BUY Signal at 7500 on 18 June

COVER Short Signal at 7500 on 18 June

S/T SELL Signal at 7424 on 17 June

COVER Signal at 7454 on 17 June

S/T BUY Signal at 7404 on 11 June

COVER Short Signal at 7337 on 10 June

S/T SELL Signal at 7462 on 05 June

COVER Signal at 7553 on 05 June

S/T BUY Signal at 7586 on 04 June

COVER Signal at 7554 on 03 June

S/T BUY Signal at 7413 on 20 May

COVER Signal at 7411 on 15 May

S/T BUY Signal at 6457 on 31 Mar

COVER Short Signal above 6398 on 31 Mar

S/T SELL Signal at 6543 on 26 Mar

S/T BUY Signal above 6600 at 6620 on 25 Mar

COVER Short Signal above 6567 on 25 Mar

S/T SELL Signal below 6554 on 24 Mar

COVER Short Signal above 6581 on 24 Mar

S/T SELL Signal below 6554 on 24 Mar

COVER Short Signal above 6581 on 24 Mar

S/T SELL Signal below 6554 on 24 Mar

COVER Signal at 6590 on 23 Mar

S/T BUY Signal at 6623 on 23 Mar

COVER Short Signal above 6563 at 6600 on 23 Mar

S/T SELL Signal at 6666 on 18 Mar

COVER Signal at 6693 on 18 Mar

S/T BUY Signal at 6729 on 16 Mar

COVER Short Signal above 6668 at 6698 on 16 Mar

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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“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.”
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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.
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