Wednesday, February 26, 2014

IPM Trade Matrix Update - Trade 6 (Part 3)

Market Overview
Over the past few days market has gone sideways. This is encouraging action, as it shows that the market is digesting its gains with time rather than with price. Today, market also triggered a proprietary timing signal (other than IPM Model). According to this signal, market could rise till mid March. This signal is in agreement with the IPM Model turn window. 

IPM Model turn window details have been emailed to subscribers few weeks ago. Latest update will be sent over the coming weekend.

While market is gathering energy for another rally, many prominent market analysts and traders have started to bet against the market. This is the kind of behavior which provides market with fuel necessary to continue its rally. If market does break-out, many people will cover. This will bring automatic bid into the market.

As you might have noticed, 2014 has so far been a very creative year for UST. First, we started publishing IPM Trade Matrix trades (which by the grace of God are doing amazingly well), and now we are developing a unique proprietary Market Barometer. This barometer is a work-in-progress, will be shared on the blog for the next few months and will evolve over time.

One of the goals of this barometer is to allow us to identify market turns through the lens of 12 proprietary indicators and also highlight areas of trending market. 

  • Reading > 50: Market is approaching a bottom
  • Reading < -50: Market approaching a Top
  • -50 < Reading < 50: Market is trending => Current trend per 8/4 test will continue
As per Market Barometer, market is in a trending mode at this point in time. And we could see another rally phase starting very soon.

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) = +9.8%

TRADE - 6: Long
Long TNA at 69.94 ==> 72.75 (added longs) ==> 74.85 (added longs)
Trade 6 is the continuation of Trade 5's half position and new positions. Trade 6's longs are initiated on 2/24/14 based on IPM Trade Matrix Trigger. More longs were added on 2/24/14 and 2/26/14.  

When: Outside IPM Turn window. 
Trigger: EW pattern completion. Current pattern suggests that the correction is over or will soon be over. Rally above SP500 = 1851, Global Dow = 2472
Supporting Indicators: Up trend, Next IPM turn window is a Top, Next IPM Turn Window is 1-2 weeks away, Rise has been impulsive in nature

Profit Target 1 (SP500): 1908
Profit Target 2 (SP500): No target # 2 on 2nd trade
*TNA profit objectives might be different than SP500

Stop: Break below SP500 = 1810, DJIA = 16000, GDOW =  2440
Trailing Stops: Will be updated by Friday (2/28)
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: 2.2% (Entry = 1850, Exit = 1810, Risk = 2.2% )
Risk Reason: No significant reason for concern. Market needs to hold critical levels and we will see higher levels  

Applicable Rule (There are 7 Rules in the IPM Trade Matrix): 
  1. Do not go long or short without trigger to prevent losses by market moving against you.  
  2. Exit all at profit objective 1 because its the 2nd trade with IPM Turn window. 
  3. No Trade in opposite direction
  4. Observe stop-losses to minimize draw-downs
  5. If stops are hit ==> Wait on the sidelines for new opportunity near IPM Turn window

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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