Saturday, February 15, 2014

IPM Trade Matrix Update - Trade 5 (Part 4)

Market Overview
As market rallies impressively, calls for a significant pull-back and/or an out-right crash are getting louder and louder. These are people who did not buy near the bottom and are bewildered by market's continuous ascent. However, even with this impressive rally no sell signal has been triggered and market is still not over-bought, as measured by proprietary indicators. It is possible that the market might trace out the following structure (Inverted Head and Shoulders) over the next week or two.

If this rally continues for few more days, a longer-term buy signal will be triggered. This signal would mean that market would rally till April/May time frame, with occasional small pull-backs.

Latest IPM Model turn window will be e-mailed to subscribers over the weekend. This window will highlight the next turn date, and will shed some light on to the market future trajectory.

IPM Trade Matrix 2014 Trades

TRADE - 1: (Long) = +2.6%
TRADE - 2: (Short) = +9.3%
TRADE - 3: (Long) - Non IPM Trade Matrix trade -0.2%
TRADE - 4: (Short - 1/31/14 to 2/5/14) +7.25% 

TRADE - 5: Long
Long TNA at 70 ==> new TNA basis = 69.94 (added few longs today) 
Longs were initiated on 2/11/14 and 2/13/14 based on IPM Trade Matrix Trigger and Elliott Wave structure. More might be added if opportunity comes within IPM turn window. 

Condition: Bottom within IPM Turn Window 
Trigger: Rally above SP500 = 1789, DJIA = 15790, Russell 2000 = 111.5, Global Dow = 2401
Supporting Indicators: Up trend (8/4 Test has not been completed), Next IPM can be either Top/Bottom

Profit Target 1: 1870
Profit Target 2: 1930

Stop: Break below 1750 (valid till we are within IPM Turn Window)
Trailing Stops: Break below 1780 (SP500) and 15720 (DJIA)
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: 1.8% (Entry = 1813 , Exit = 1780 , Risk = 1.8% )
Risk Reason: There are multiple reasons to be worried: 1929 stock market parallel, 8/4 Test to the downside is in process (will be invalid at new highs), and major IPM Bottom window in process.  

Applicable Rule (There are 7 Rules in the IPM Trade Matrix. Following are applicable to the market right now): 
  1. Do not go long or short without trigger to prevent losses by market moving against you.  
  2. Exit half at profit objective 1. Exit full at profit objective 1 if proprietary momentum continuation signals are not present.
  3. Observe stop-losses to minimize draw-downs

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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