Thursday, February 16, 2012

Trading Algorithm Systematic Analysis

Market: Bull (8/4 test complete) ==> No Shorting
  • IPM Turn window ==> Russell 2000 and DJT Topped during IPM

    • Market Scenario (Market Matrix and IPM) ==> Be cautious b/c of sentiment and IPM turn window

      • Market pauses ==> Tests short-term proprietary MA

        • Market momentum: Very high (overbought) ==> Rally should continue (high prob)

          •  Re-entry opportunity ==> Test/re-gain short-term proprietary MA

            • Long for trade into the the IPM turn date, (Stop: Close below 1337)

              • Next Turn date: End of February (IPM + Momentum analysis)
Details will be provided in future posts.


  1. Thanks Naqvi, I'm dipping my tows in. 20% SP500, 20% DOW indices and 60% bonds/cash. I think the market is ready to go past 1350 on the SP500 and float towards 1380-1390. After that is anyones guess. Brad

  2. Sorry, thats "dipping my toes in". Brad

  3. So....are we still bullish? and are we still going to rally?

  4. Can you post when is the next IPM +/- ? Is it the week of 20th or 27th of this month.

  5. Greece got its bailout. What next?

  6. I think the Greece bailout will simply continue to inch up the current market rally - much like TARP did. This is all well and good for now (don't fight the government trend, try to take advantage of it), but the governments of the world, in my view, have created another, and potentially larger bubble to replace the real estate bubble. The "Asset Bubble". By injecting the huge amount liquidity into the markets that the US and Europeans have, assisted by cheap money (low interest rates), companies have been hoarding cash and inflating their assets as a defensive maneuver to hedge against the market and consumer. Assets, in my view, are overstated on the balance sheets of way to many companies. This improper/false asset realignment to current market conditions, which fundamentally created its own quasi growth because of the cheap money and excessive liquidity, could spell hardship down the road when the easy money and government intervention is turned off/stopped. Growth has already started to slow in the US market without government intervention and will probably continue to slow. China easing its monetary policy this last week will help some companies and governments that already trading with China, but don't stick your head in the sand, we could fall back into another recession if not worse. I personally hope this doesn’t happen, but one must remain objective. Any comments or ovservations from the board? Brad

  7. Thanks Brad. Excellent comments. I agree with you analysis, and the fact that we have entered another bubble because the real economic growth (excluding debt growth) is negligible. However, like all bubbles you never know how high it will go before bursting. Therefore, I would say that trend is your friend (like your statement). Buy the dips, till the next 8/4 test to the downside has been completed. And then think about shorting the market.


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