Rich Trend Trader's Blog

October 23, 2012

SELL Signal Issued EOD 10/23/2012

Filed under: Trend Timing Model — Rich Trend Trader @ 10:36 pm

The Trend Model SELL setup was issued on 10/22/2012 and SELL signal issued at the end of day on 10/23/2012 due to all trend model indices (RUT/SML, MID, SPX) closing below the high of 10/22/2012.  This type of sell signal has not shown a high rate of success since Jan/2009.  There have been 9 sell signals of this type with 7 of them failing in that the market did not continue down to create a Trend Model BUY Signal.

Note that the RUT and SPX have closed below their respective lower Bollinger therefore some type of market rally from current levels should not be unexpected even if the market eventually continues down.  The VIX also close above its upper Bollinger band.  A close above and then below the upper Bollinger band is considered to be a market equity buy signal.

MARKET COMMENTARY UPDATE 11/06/12: As suspected, the market has not once closed below the Trend Model SELL day for the current sell signal.  However, a sell signal failure has yet to be issued.  The susecptability of this signal has very much to do with the fact that it is issued based upon data from a commercially available stock market valuation service.  Therefore, every hedge fund, high frequency trading system, and wall street bank knows the signal/data and given the capital constraints and the desire to asset strip the general trading public the high failure rate of this signal since 2009 is not surprising.  This is the reason that I personnally, along with the Bollinger band and VIX information provided in the original post, only acted on the signal with half of my account capital on the signal day the the other half on 11/01.  Although I am waiting for an official failure signal it appears that another round of asset striping is going to take place and once again most of the EW blogs are going to be wrong about their calls for a market crash again (after being wrong for nearly 4 years).


October 10, 2012

BUY Re-Entry Signal Off Of The CASH (50% Long Positions put into Cash) Signal Issued EOD 10/9/12

Filed under: Trend Timing Model — Rich Trend Trader @ 3:33 am

The Trend Model BUY signal is still in effect and the small cap indices (RUT and SML) closed below their previous 20-Day low.  Therefore, the re-entry signal has been issued for the CASH (50% Long Positions put into Cash) Signal issued on 9/25/12.


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