Tuesday, January 21, 2014

IPM Trade Matrix - Trade 1 (Part 6)

Market Overview:
Market has been going sideways. This kind of market action suggests that the market is getting ready for a blast higher. There is no significant hindrance which can stop the market from rallying. Although market driving news typically comes from the left field, market structure is suggesting smooth sailings for the next 2-3 weeks. Details about the next market turn date has been e-mailed to subscribers. Overall, it seems like market wants to give Chairman Bernanke a standing ovation before his departure from the Fed towards the end of this month.

As per Elliott Wave structural analysis, market is setting up for a sharp rally (wave 3 of a minor degree) - possibly into the early February.

As far as the IPM Trade Matrix trading is concerned, we are still tracking this trade below and will continue to do so till we exit the trade.

First Trade of 2014 is in process:

SP500 (1/16/14) = 1844
DJIA (1/16/14) = 16414

Long TNA at 76.25 (original) ==> 76.6 (new)
Long FAS at 92.30 (original) ==> 91.6 (new)
Long TSLA at 171.2
Long positions were added on 1/14/14 & 1/16/14 based on IPM Bottom window expiration and low risk scenario

Condition: Next IPM Window is Top or Bottom
No. of Trades between turn windows: 1
Triggered (Updated at End of Day on 1/9/14): Rally above 1837 (SP500) and above 16450 (DJIA)
Profit Target: 1885-1890 (Will be evaluated as Elliott Wave structure matures)

Stop: Below SP500 = 1816, DJIA = 16217, Comp = 4090, Rut = 1141 (3 of 4)
Trailing Stops (updated on 1/15): Close Below SP500 = 1835, DJIA = 16442, Comp = 4170, Rut = 1160 (3 of 4) 
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk (1/15/14): 0% (Entry = 1837, Exit = 1835, Risk = 0%)
Risk Reason: IPM Top is approaching. Market needs to hold during this top window, otherwise we can see a serious correction. Rise above 1850 will neutralize this risk

Applicable Rule: If next minor IPM turn window is within 2 weeks then wait for a confirmation break before exiting longs. 

Note: IPM Trade Matrix Trades will be posted in the first half of 2014. This is an experiment to understand and enhance the capabilities of this Matrix.

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