Lessons

1. If VIX is under 26, buy the dip. If VIX is over 26, sell the rip.

2. Always trade in the direction of the larger trend. Find the strongest trend in your time period.

3. Nothing as bearish as a failed breakout. Nothing as bullish as a failed break down.

4. Don't worry about the last dollar. Take your money and go to the beach!

5. No more than four positions at a time. Preferably 2-4. Scope out others. Pick the strongest.

6. Buy the strongest; sell (short) the weakest.

7. Nothing is guaranteed. Nothing.

Wednesday, January 7, 2009

LT Thoughts

INDICATORS

1. AD Issues line looks very bullish.  5 DMA and 10 DMA was never this high in all 2008.

2. Bullish percent index is also above 2008 highs.

3. McLellan is at 2008-2009 highs.

4. Summation index is a straight shot up.  Wow.  

5. AD Volume looks very bullish.  5 DMA and 10 DMA broke 2008 highs.

6. Weekly Stochs on all indices are up.

7. Daily Stochs on all indices are now bearish.

8. 15 minute Stochs are bearish.  30 minute Stochs are mixed.,

9. Daily Tick is headed down and BELOW SP after a while.  (SELL.) 

10. Caution: 5-min Tick is above SP now; this is a very ST buy signal, if supported by other indicators.  Watch 5 -min Tick.  IT WILL TELL YOU WHEN TO COVER.

11. TRIN looks terrible.  (5 min and daily.) STAY SHORT until it turns.

12. TNX strength is a bit worrisome, but no biggie.  KEEP an eye on it.


CONCLUSIONS

1. Long term (6 months +) trend is down, but may be changing. Weekly Stochs are up.

2.  Mid-term trend (1 week+) is changing to down.  (as seen in daily chart.)

3. ST trend (1 day) is down.

4.  Watch TRIN.  Cover shorts when TRIN falls back.   At 880-95?  

Re short at 910 - 920, depending upon market strength (TICK AND TRIN, etc.).  


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