Trading the Line

Trump Tower

On Election day the market noses into the resistance line at 2144, and stops to wait for the result.

We had a short term cycle/pulse high scheduled for 8-9 November which suggested that the market might sell the news at least temporarily.

Oops, futures down very hard on the news of Donald Trump's successful night, triggering a SELL Signal, but have recovered significantly showing that the market was well protected. Initially E-minis bounced at 2028 which corresponds to about 2032 on the S&P500 index – the lower extreme boundary – fine green line on my charts. Keep an eye on that level for future reference as it is now major support and the market may need to go have a look-see at some point.

Watch to see if the previous low at 2083 holds, or not, as the market digests the news and traders re-position. Very large open option positions at 2050 and 2000 may be initial magnets and strong support but the unloading of these positions could also be the tail-wind for a strong recovery. (ie Sell the News and Buy the recovery)

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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 & 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 November 9, 2016No Comments

S&P500 daily update

Just politics

Putting aside the fact that America goes to the polls today.
It is what it is and it doesn't really matter who wins, not in the long run. Sadly, not really.

The market makes a BUY Signal and activates a new small T projecting a first peak on the 16th.
At the moment it looks like a thrust, and if we compare it with BrExit we could be looking at a rally into 2250 (a future long term target).

First we have a short term cycle/pulse high scheduled for 9 November and a another high scheduled for 15 November.

If we can break through the obvious descending resistance line, further arms of the new T will become activated projecting a series of highs in December and even January.

In the meantime we have an election to navigate through and of course it is entirely possible that the market is unhappy with the result.
Take care and hedge accordingly because there will be a lot of orders to fill below the market.

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Steve Rushton November 8, 2016No Comments

S&P500 intraday update S&P500 signal

S/T BUY Signal at the open

Sometimes the market bounces and fails and then the real bounce starts the next day, with avengeance.

The market roars its approval of Hillary and breezes through resistance and up into the mid-channel area.

A new small T is activated, and we can see that if this breaks through the downward sloping resistance, we have the possibility for a larger T structure and a rally into Christmas and the New Year.

Its just politics, stupid

Steve Rushton November 7, 2016No Comments

S&P500 intraday update

Fireworks to start the week

Fireworks in the Futures market this morning are indicating a very strong start to the week, and the market will therefore probably open above the S/T (Short term) Buy Signal level.

Assuming that price stays and closes above the Buy Signal level we will presumably have a relief rally into the Election with resistance targets not far above.

A strong move up today will activate the 'Possible new T' on my chart projecting a high next week.

Interestingly I have 2 short term cycle/pulse highs scheduled to coincide with the election and just after.

If the market fails to hold this morning's gains then we have the potential for a continuation of the Sell Signal.

Steve Rushton November 7, 2016No Comments

S&P500 daily update

Trump card

Nice very short term bounce but no Buy Signal (yet)

Friday's action was a great example of why the S/T Buy level is somewhat above the market during declines – and why I think at below that level the buying is very speculative and for aggressive traders only.

We can see that the market did not get above 2100 and resumed its selling into the close, indicating that the market has a 'Risk-Off' Attitude.

We are currently sitting at the 200 day moving average – the line in the sand – and 9 days down in a row.

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Steve Rushton November 7, 2016No Comments

FREE REPORTS

Echo Low or Waterfall

The market has moved out of the stalemate associated with the end of the large pink T structure (pushing down) and the final weeks of the red 'Brexit' T structure (pushing up), and resolved to the downside.

I thought it would be interesting to look at the bigger picture and discuss 'double' bottoms.

Terry Laundry suggested that a double bottom resolves into one large T structure with the 2 major lows combining forces. We place the centre-post or vertical line of the T half-way between the 2 lows, and then draw the left-hand side of the T from the price peak to the centre-post, and this projects the end of the T.

We can see this clearly in the first double bottom of late August- September 2015.

Terry Laundry also pointed out that if you draw the T from the second low this will often project a price low instead of a peak – an Echo Low. (Marked in gray).

Moving on to the more recent 'double' bottom we have some complications. The oscillator shows that there is a cluster of 'lows' prior to the first price low and this is why I have drawn the major T structure in pink. However it is also possible to consider the T structure from a double bottom perspective and this projected to the early October breakdown in the market.

If we draw the T for the second low in gray we can see that at the end of the T the market was already moving downwards – into a low? And notice that the 2 previous arms of the gray T point to, or near to, lows

And so the question is: Are we entering an Echo Low or the beginning of a longer protracted decline?

If this is an Echo Low then we should see some stabilisation over the next few days, perhaps a panic low, in response to the Election and then a Buy Signal.

Of course nothing is ever certain, and there is a possible alternative view – that the Final price low in February 2016 is a single low not a double bottom, in which case we may be looking at longer bearish phase associated with the end of a major T structure.

This is why I use price to confirm the signals and not opinion. Price will get you into the market and ensure that you are not trading against it for very long.

Be prepared.

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Steve Rushton November 5, 2016No Comments

S&P500 daily update

Gunpowder

“Remember remember the fifth of November
Gunpowder, treason and plot.
I see no reason why gunpowder, treason
Should ever be forgot…”

― Guy Fawkes

Lots of good reasons for a bounce here… , and a possible rally back into resistance, but a break lower is certainly possible.
And still plenty of time left for fireworks and depth charges associated with the election.

Significant risk indicated by SKEW

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Steve Rushton November 4, 2016No Comments

S&P500 intraday update

Continuation of Selling

Today's intraday advice to subscribers:

After stabilising for the morning, the push lower thru 2195 has triggered a continuation with the selling.
The risk is that the market rapidly turns up now.
Target 2083.

–

Well, that was close enough for rock and roll, close.
If we don't bounce here we are going much lower.

Steve Rushton November 3, 2016No Comments

S&P500 daily update

Just because

Continuation Sell Signal at 2107 yesterday with target of at least the prior low which was acheived.

The 2pm bounce prompted a cover signal (just in case), but the short term Sell Signal remains active.

The market is ready to bounce at a moments notice, with several indicators flashing green, but I still think we will touch the lower rising Gann line currently at 2083 sooner or later.

Moving into or towards a low…

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Steve Rushton November 3, 2016No Comments

S&P500 daily update

All Souls

Market starting to factor in the possibility of a trump card next week, which is something I've been thinking might have been discounted (a bit like Brexit was). And that might really rattle the markets…

Anyway a short-term target was acheived with the trip down to 2100 and it was sensible place to take some profits.
I'm still eyeing 2180-85 for a more sustainable low and significant bull market support.

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Steve Rushton November 2, 2016No 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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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.
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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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