Monday, March 22, 2010

3/22 noon

Updated the I1 rule set to include tactical rules for those periods when I1 is NOT in a buy signal or sell signal, but I1 is trending nonetheless.  The following is the complete rule set so that you can see what I will do in advance, just looking at the upcoming I1 charts.

1) Buy signal rules:
a) As long as next I1 peak > 5.5 buy the low or 0 and exit at peak or when I1 returns back to 9.0, whichever is less. Initial position will be 20% of capital.  Position can be added to when .3% upside break of 15-min, 54-unit M/A
b) If low<0 then buy half the distance from low to 0.
c) Use peaks as opportunity to take profits. Ignore selling a peak if the subsequent trough > 4.8 (stay long).

2) Shorting signal rules:
a) As long as next I1 trough < 3.25 sell the peak or 8, exit low prior to rally above +3. Initial position will be 20% of capital. Position can be added to when .3% downside break of 15-min, 54-unit M/A

b) Exit low prior to rally above +3. If low<0 then cover at half distance from low to 0
c) Use troughs as opportunity to take profits. Ignore a trough if the subsequent peak < 0 (stay short).

3) In the absence of buy and sell signals the tactical rules are:
a) I1 uptrend, OK to buy small at I1 bottom, but must wait for .3% upside break of 15-min, 54-unit M/A before buying more. Cannot short until 1/2% downside break of 5-min, 380 unit M/A.
b) I1 downtrend, OK to short small at I1 top, but must wait for 1.2% downside break of 15-min, 54-unit M/A before shorting more. Cannot go long until upside break of 5-min, 380-unit M/A.

4) For longer-term traders:
a) stay long until final peak or until it falls below 9.0, whichever is lower.
b) stay short as long as next peak <3.0.
c) ignore I1 moves lasting less than 1 week or with a swing < .5.

Here is the current I1 chart.  Try taking a swing at it with the rule set (hint: we are currently not in a buy or sell signal).

2 comments:

  1. Hello Steve, thanks for the blog your insights are very appreciated. What is your projected timing for an ultimate market top basis the I1 values? Is this the 4/2 date you cited. Many thanks.

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  2. I'll address your concern in the Daily Commentary. Thanks for the comment.

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