Friday, January 31, 2014

IPM Trade Matrix - Trade 4 (Part 1)

IPM Turn Window Information has been e-mailed to Subscribers

Trade 4, as mentioned previously will be short trade because of reasons mentioned previously.

Trade 4 can be a very difficult trade because of 2 reasons:

1- Market can resume its decline phase at any time
2- Market's correction (up-move) can take on multiple forms

Primarily, there are two triggers for this trade outside of turn window. Elliott Wave analysis is one method.

According to Elliott Wave analysis there are two possibilities for this current decline:

1- ABC: This would require sharp rally to 1810 level
2- 12345: This would require a break below today's low in the near future

As per Global Dow's wave structure, market has breached the low level and will start following scenario 2. As far as other indices are concerned, they are kind of divided between scenario 1 and 2. We will surely find out over the next few days.

IPM Trade Matrix Trades

TRADE - 1: Summary of Trade 1 (Long) = +2.6%
TRADE - 2: Summary of Trade 2 (Short) = +9.3%
TRADE - 3: Long
Long TNA at 70.28 ==> Exit at 70.14 ==> -0.2% ==> -0.03% of portfolio

TRADE - 4: Short
Long TZA (short ETF) at 18.23 
Short positions were added on 1/31/14 based on Elliott Wave structure. More shorts might be added if market either breaks below critical levels or rises to critical levels. Breaking below will confirm scenario 1, rallying higher will confirm scenario 2. 

Condition: Outside IPM Turn Window (Re-entry)
Trigger: Test of ~1810 (SP500), ~16120 (DJIA). Decline trigger will be determined based on EW analysis and other proprietary levels once we test these level.
Supporting Indicators:  Next IPM window is a Bottom and is 1-2 weeks away. Details will be emailed to subscribers over the weekend

Profit Target 1: 1725
Profit Target 2: 1670 

Stop: Above high - Max would be around 1825
Trailing Stops: N/A
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: 2.2% (Entry = 1785, Exit = 1825, Risk = 2.2%)
Risk Reason: No significant risk because upcoming turn date is a bottom.

Applicable Rule: Do not go long or short without trigger to prevent losses by market moving against you.  

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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