NYLOW, NAMO and NYMO update

$NYLOW - Chart Link - Obviously a nice bounce in the market, but again these indicators were at extreme levels late last week, as you can see from the NYLOW here, so should not be a surprise

$NAMO - Chart Link - NAMO and NYMO with Bollinger Bands

$NYMO - Chart Link

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NYLOW spiking

This indicator is spiking and getting to levels where the market has bounced from in the past

Dow and S&P daily charts/comments

The H&S pattern on the Dow is finally getting closer to its target area

The S&P 500 has now retraced to the 61.8% Fibonacci retracement

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NYMO

$NYMO - Chart Link - Here's a longer view of the NYMO, last night I showed the NYMO with Bollinger Bands, this one goes further back without BB's, instead uses the -80 level - gives you a visual of how this current spike down is in relation to previous spike lows, clearly it's low right now, but as you can see many times on deep pullbacks it goes quite a bit lower

$NYMO - Chart Link

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NYMO and NAMO with Bollinger Bands

$NYMO - Chart Link - price spiked below the Bollinger Bands on both the NYMO and NAMO, so it's something to take note of as spikes below the Bollinger Bands can sometimes market short term or tradeable bottoms.  

However these can be early and clearly the market index charts still do not look good, just pointing out these indicators for now as we are getting oversold in the short term.

$NAMO - Chart Link

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Time Tested Trading Rules

Here's a post I made back in Dec 2008 (the wild days)

http://breakpointtrades.com/blog/post/40089/

 

Time Tested Classic Trading Rules 
for the Modern Trader to Live By

 This is a list of classic trading rules that was given to me while on the trading floor in 1984. A senior trader collected these rules from classic trading literature throughout the twentieth century. They obviously withstand the age-old test of time.

I'm sure most everybody knows these truisms in their hearts, but this list is nicely edited and makes a good read.

1. Plan your trades. Trade your plan.


2. Keep records of your trading results.


3. Keep a positive attitude, no matter how much you lose.


4. Don't take the market home.


5. Continually set higher trading goals.


6. Successful traders buy into bad news and sell into good news.


7. Successful traders are not afraid to buy high and sell low.


8. Successful traders have a well-scheduled planned time for studying the markets.


9. Successful traders isolate themselves from the opinions of others.


10. Continually strive for patience, perseverance, determination, and rational action.


11. Limit your losses - use stops!


12. Never cancel a stop loss order after you have placed it!


13. Place the stop at the time you make your trade.


14. Never get into the market because you are anxious because of waiting.


15. Avoid getting in or out of the market too often.


16. Losses make the trader studious - not profits. Take advantage of every loss to improve your knowledge of market action.


17. The most difficult task in speculation is not prediction but self-control. Successful trading is difficult and frustrating. You are the most important element in the equation for success.


18. Always discipline yourself by following a pre-determined set of rules.


19. Remember that a bear market will give back in one month what a bull market has taken three months to build.


20. Don't ever allow a big winning trade to turn into a loser. Stop yourself out if the market moves against you 20% from your peak profit point.


21. You must have a program, you must know your program, and you must follow your program.


22. Expect and accept losses gracefully. Those who brood over losses always miss the next opportunity, which more than likely will be profitable.


23. Split your profits right down the middle and never risk more than 50% of them again in the market.


24. The key to successful trading is knowing yourself and your stress point.


25. The difference between winners and losers isn't so much native ability as it is discipline exercised in avoiding mistakes.


26. In trading as in fencing there are the quick and the dead.


27. Speech may be silver but silence is golden. Traders with the golden touch do not talk about their success.


28. Dream big dreams and think tall. Very few people set goals too high. A man becomes what he thinks about all day long.


29. Accept failure as a step towards victory.


30. Have you taken a loss? Forget it quickly. Have you taken a profit? Forget it even quicker! Don't let ego and greed inhibit clear thinking and hard work.


31. One cannot do anything about yesterday. When one door closes, another door opens. The greater opportunity always lies through the open door.


32. The deepest secret for the trader is to subordinate his will to the will of the market. The market is truth as it reflects all forces that bear upon it. As long as he recognizes this he is safe. When he ignores this, he is lost and doomed.


33. It's much easier to put on a trade than to take it off.


34. If a market doesn't do what you think it should do, get out.


35. Beware of large positions that can control your emotions. Don't be overly aggressive with the market. Treat it gently by allowing your equity to grow steadily rather than in bursts.


36. Never add to a losing position.


37. Beware of trying to pick tops or bottoms.


38. You must believe in yourself and your judgement if you expect to make a living at this game.


39. In a narrow market there is no sense in trying to anticipate what the next big movement is going to be - up or down.


40. A loss never bothers me after I take it. I forget it overnight. But being wrong and not taking the loss - that is what does the damage to the pocket book and to the soul.


41. Never volunteer advice and never brag of your winnings.


42. Of all speculative blunders, there are few greater than selling what shows a profit and keeping what shows a loss.


43. Standing aside is a position.


44. It is better to be more interested in the market's reaction to new information than in the piece of news itself.


45. If you don't know who you are, the markets are an expensive place to find out.


46. In the world of money, which is a world shaped by human behavior, nobody has the foggiest notion of what will happen in the future. Mark that word - Nobody! Thus the successful trader does not base moves on what supposedly will happen but reacts instead to what does happen.


47. Except in unusual circumstances, get in the habit of taking your profit too soon. Don't torment yourself if a trade continues winning without you. Chances are it won't continue long. If it does, console yourself by thinking of all the times when liquidating early reserved gains that you would have otherwise lost.


48. When the ship starts to sink, don't pray - jump!


49. Lose your opinion - not your money.


50. Assimilate into your very bones a set of trading rules that works for you.

 

Many thanks to all Veterans!

thanks to all Veterans!

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Moon cycle chart

Tomorrow is the New Moon cycle, lately the market has at least responded to the cycles for at least a temporary bottom, we'll see if this one produces a bounce. Remember that the cycles are +/- a day or so

BPT EMA RSI 2 system comments

The RSI 2 BPT system will go long today if the SPX closes down but remains over the long term 160 SMA.  Below the 160 SMA the system doesn't take longs. 

If the market closes down today, the EMA based RSI 2 will have been oversold for 2 days in a row, which is a requirement for the system - but again price must stay above the 160 SMA, which is currently at 1386, but can of course change sightly by the close

This system scales in for a potential of 4 entries of 30%, 30%, 20%, 20%, today's entry would be 30% if it occurs.

Remember that there are two versions to this reversion to the mean system, one that closes out when RSI is overbought or oversold, and one trending version that at times will attempt to hold a trade longer when conditions apply. Here are statistic reports for each version of the system

(click below the report will open ONLY in I.E. Internet Explorer as an MHTML performance report file)

EMA RSI 2 system non trending

Rules: goes long when price is above the 160 SMA when EMA based RSI closes below 11% for 2 days in a row.  exits when RSI 2 closes at 80% or higher

Shorts - reverse, when price is below 200 SMA, shorts when RSI 2 closes above 90% for 2 days in a row, exits on a close below 40%

System scales in 4 potential entries of 30%, 30%, 20%, 20%, but each successive entry must be at a better price than the previous one i.e. entry 2 has to be better than entry 1, entry 3 has to be better than entry 2 etc.

This is a reversion to the mean system as it is only in the market 12.4% of the time

(click below the report will open ONLY in I.E. Internet Explorer as an MHTML performance report file)

EMA RSI 2 system - trending certain times

Rules: The same as the non trending system, except this system will attempt to hold trades longer at certain times - however this is still a reversion to the mean system, it's only in the market 19% of the time, the rest of the time is in cash - while the non trending system above is in the market only 12.36% of the time.

As always this is provided as information only, trade according to your plan and risk tolerance

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Our Recent Newsletter

Hello everyone, here's my most recent Newsletter, please take the time to review as I discuss both the short term and longer term picture of the market, as well as commodities.

Also on an Administrative note, be aware that we have a 'new' Newsletter format where you can skip around and play audio for individual charts vs the whole newsletter (see the tabs at the top of the newsletter.

As always, best to your week!

Matthew Frailey

so far the market has tracked the election cycle seasonality ...

so far the market has tracked the election cycle seasonality average this year quite well (average back to 1928), if it continues market should go higher into year end

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Monday Nov 5th, 2012 Newsletter

Here's tonight's newsletter,

make sure to get out and vote!!!

Here's the updated RSI 2 strategies - As you know, ...

Here's the updated RSI 2 strategies - As you know, one RSI strategy closed out on Thursday (the one that only used the RSI 2 getting over bought without the trending indicator), while the one with the trending indicator closed out on Friday's ugly day after the close.

Here are the charts and Statistic reports.  The system that uses the trending indicator has a higher profit factor and a higher net gain, while the one that ONLY uses the RSI 2 to exit trades has a lower profit target of 7 vs 9.8 and a lower total profit gained - however it does have a higher win rate winning 85% of the trades vs 83.9% for the trending system

I will be adding these systems to the Mechanical Systems section of the website and plan to send email alerts when they trigger

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futures are up about 7, was up more Regarding the RSI ...

futures are up about 7, was up more

Regarding the RSI 2 SPX system - again do what you feel is right, you can either take nice profits or hold and wait for the system to reverse, or a combination of both.  The system won't exit until its trending indicator goes negative, if I turn off the trending indicator the system would be out.  The stats are still nice with it off, I've attached two stat reports one with it on and off: the system with the trending indicator turned off actually has a slightly higher winning % of 85.3% vs 83.9%, while the one with the indicator turned on makes more money - again that's only logical

otherwise do what you feel is right and suits your trading style. 

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Moon cycle chart

$SPX - Chart Link - once again the market bounced at the moon cycle, otherwise today the Jobs report will be released at 8:30 EST, let's see how they spin those numbers

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