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Saturday, May 31, 2014

IPM Trade Matrix - Trade 10 (Part 10)

IPM Trade Matrix Trade 10 has been exited as aggressive trailing stops were hit.

Cost basis for TNA = 64.7
Exit Level = 69.5
Total Profit = 7.4%

Following chart shows the performance of IPM trade matrix in 2014. All trades have been documented on the blog. 

There has only been 1 major negative trade. This trade allowed us to learn about WIIW concept. In back testing, this concept was validated over the past decade. Hopefully, this understanding will improve our future results.


For now, we are on the sidelines. There might be a small options trade before the next IPM turn window. Timing details will be emailed to subscribers this weekend.

Thursday, May 29, 2014

IPM Trade Matrix - Trade 10 (Part 9)

If the market makes a higher high above today's high, market could rally till June 5 (ECB decision day). This will be interesting, as we will see the sell the news reaction. Today's rally shows market strength in face of a very negative GDP number. 

Among all the uncertainty, IPM trade Matrix remains long and will exit the trade at stop levels. Overall, we are ina strong market and people should take it seriously. But I guess, not taking it seriously is the major reason, why its doing so well right now!!

Will talk about Dennis Gartman & his latest bond prediction!!

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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%
TRADE - 9: (Short - 4/30/14 to 5/12/14) +0.3%

TRADE - 10: 
Bought TNA at 68.5. More longs were added at 63.5. TNA Cost Basis: 64.7. Exited 25% longs at the close on 5/23. All longs will be exited if trailing stops are hit.

TRADE CONDITIONS
When: IPM Model Bottom window - Date info e-mailed to subscribers
Next IPM Turn Window: Top
Trigger: SP500 = 1876, GDOW = 2535
Supporting Indicators: 8/4 Test negated. Uptrend reinstated.  

PROFIT TARGETS
Profit Target 1: 1930
Profit Target 2: -

RISK 
Stop: SP500 = 1862, DJIA = 16342, GDOW = 2513
Trailing Stops: SP500 = 1912, GDOW = 2561
Typical IPM Trade Matrix Risk: -
Actual IPM Trade Matrix Risk: 0% (Entry = 1879 , Exit = 1904 , Risk = 0% )
Risk Reason: Ending diagonal pattern.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  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.



For Blog updates on Google+ add: Understand Survive Thrive 
For Blog updates on Twitter, add: @survive_thrive
For E-mail updates: 

Wednesday, May 28, 2014

IPM Trade Matrix - Trade 10 (Part 8)

Market is undergoing consolidation. IPM turn window is expiring soon. If the market declines below stop levels, trade will be exited.


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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%
TRADE - 9: (Short - 4/30/14 to 5/12/14) +0.3%

TRADE - 10: 
Bought TNA at 68.5. More longs were added at 63.5. New Cost Basis: 64.7. Exited 25% longs at the close on 5/23.

TRADE CONDITIONS
When: IPM Model Bottom window - Date info e-mailed to subscribers
Next IPM Turn Window: Top
Trigger: SP500 = 1876, GDOW = 2535
Supporting Indicators: 8/4 Test negated. Uptrend reinstated.  

PROFIT TARGETS
Profit Target 1: 1930
Profit Target 2: -

RISK 
Stop: SP500 = 1862, DJIA = 16342, GDOW = 2513
Trailing Stops: SP500 = 1907, GDOW = 2557
Typical IPM Trade Matrix Risk: -
Actual IPM Trade Matrix Risk: 0% (Entry = 1879 , Exit = 1904 , Risk = 0% )
Risk Reason: Ending diagonal pattern.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  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.



For Blog updates on Google+ add: Understand Survive Thrive 
For Blog updates on Twitter, add: @survive_thrive
For E-mail updates: 

Tuesday, May 27, 2014

IPM Trade Matrix -Trade 10 (Part 7)

IPM Trade Matrix has again started performing very well, as soon as the market started trending. 

Market analysis and trading requires amazing discipline & many people freak out at the wrong time. 

Following chart shows IPM trade matrix performance. Once latest IPM Trade Matrix - Trade 10 is complete, following chart will be updated. 


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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%
TRADE - 9: (Short - 4/30/14 to 5/12/14) +0.3%

TRADE - 10: 
Bought TNA at 68.5. More longs were added at 63.5. New Cost Basis: 64.7. Exited 25% longs at the close on 5/23.

TRADE CONDITIONS
When: IPM Model Bottom window - Date info e-mailed to subscribers
Next IPM Turn Window: Top
Trigger: SP500 = 1876, GDOW = 2535
Supporting Indicators: 8/4 Test negated. Uptrend reinstated.  

PROFIT TARGETS
Profit Target 1: 1930
Profit Target 2: -

RISK 
Stop: SP500 = 1862, DJIA = 16342, GDOW = 2513
Trailing Stops: SP500 = 1904, GDOW = 2555
Typical IPM Trade Matrix Risk: -
Actual IPM Trade Matrix Risk: 0% (Entry = 1879 , Exit = 1904 , Risk = 0% )
Risk Reason: Ending diagonal pattern.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  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.



For Blog updates on Google+ add: Understand Survive Thrive 
For Blog updates on Twitter, add: @survive_thrive
For E-mail updates: 

Friday, May 23, 2014

IPM Trade Matrix - Trade 10 (Part 6)

According to IPM Trade Matrix, we are supposed to exit partial position at profit objectives and initiate aggressive trailing stops. This would allow for risk-mitigation and continued rally participation. 

One other IPM trade matrix rule which is applicable under current scenario: When two IPM model turn dates are close to each other and the market had bottomed in the last window in an uptrend, wait for a certain trigger before exiting long. This will ensure continued market rally participation. This scenario was seen in June 2013, Nov 2012, Aug 2012, Dec 2010.

As a result, we will remain long till stop levels are hit. 

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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%
TRADE - 9: (Short - 4/30/14 to 5/12/14) +0.3%

TRADE - 10: 
Bought TNA at 68.5. More longs were added at 63.5. New Cost Basis: 64.7. Exited 25% longs at the close today.

TRADE CONDITIONS
When: IPM Model Bottom window - Date info e-mailed to subscribers
Next IPM Turn Window: Top
Trigger: SP500 = 1876, GDOW = 2535
Supporting Indicators: 8/4 Test negated. Uptrend reinstated.  

PROFIT TARGETS
Profit Target 1: 1930
Profit Target 2: -

RISK 
Stop: SP500 = 1862, DJIA = 16342, GDOW = 2513
Trailing Stops: SP500 = 1882, GDOW = 2531
Typical IPM Trade Matrix Risk: -
Actual IPM Trade Matrix Risk: 0.16% (Entry = 1879 , Exit = 1882 , Risk = 0.16% )
Risk Reason: Ending diagonal pattern.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  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.



For Blog updates on Google+ add: Understand Survive Thrive 
For Blog updates on Twitter, add: @survive_thrive
For E-mail updates: 

Wednesday, May 21, 2014

IPM Trade Matrix - Trade 10 (Part 5)

Market is breaking out of 4-6 month long consolidation. This break-out could result in a sharp rally - a rally least expected by the majority. As a matter of fact, along with the trading long position, we have trimmed bond holdings in 401K and have moved to stocks for the next few months.

Two days ago, someone wrote few interesting comments on the blog. They are still posted. Its very enlightening to read those comments today and understand the importance of following a time-tested system, as compared to just trading based on whim. Those comments came as market had decline 140+ points. The only difference was that I had added longs based on IPM turn window, whereas that person had exited longs out of fear.

By the grace of Almight God, these comments again testify to the accuracy of the IPM turn windows and the importance of the IPM Trade Matrix. Its very interesting how God brings out hidden gems through negative commentary of critics.


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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%
TRADE - 9: (Short - 4/30/14 to 5/12/14) +0.3%

TRADE - 10: 
Bought TNA at 68.5. More longs were added at 63.5. New Cost Basis: 64.7

TRADE CONDITIONS
When: IPM Model Bottom window - Date info e-mailed to subscribers
Next IPM Turn Window: Top
Trigger: SP500 = 1876, GDOW = 2535
Supporting Indicators: 8/4 Test negated. Uptrend reinstated.  

PROFIT TARGETS
Profit Target 1: 1930
Profit Target 2: -

RISK 
Stop: SP500 = 1862, DJIA = 16342, GDOW = 2513
Trailing Stops: Will be determined by Friday
Typical IPM Trade Matrix Risk: -
Actual IPM Trade Matrix Risk: - (Entry = 1879 , Exit = - , Risk = - )
Risk Reason: Ending diagonal pattern.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  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.



For Blog updates on Google+ add: Understand Survive Thrive 
For Blog updates on Twitter, add: @survive_thrive
For E-mail updates: 

Market Update & Importance of Systems

There are certain characteristics that determine success in the market and are critical for long-term performance. These include:

  1. Having a system that one can follow every time because trading is a game of probability. If one has a system with good performances rate, this system can only generate positive results, if it is used every time. Even in troubling times.
  2. System should be updated with lessons learned and then back-tested to ensure that the improvements will not undermines system's performance in some other way.
  3. System must be agile enough to anticipate and adapt to trend changes, rather than adamant adherence to wrong analysis. 
  4. All other information like patterns, technicals etc, which have been determined to be only supporting indicators, should only be treated as supporting indicators and trade should not be based on these supporting indicators.
  5. Easiest and most obvious trade is typically, the wrong trade. Therefore, use your edge to decipher the right trade versus easy trade.
  6. Having belief in the system is much more important because at the end of the day market pays & without a solid system, trading will be all over the place.
All of this being said, IPM Trade Matrix remains long. It will exit longs on a decline below lows set in the IPM turn window in prop indices. Details will be provided in next update.

Overall, it seems like people have now become pre-occupied by the ending diagonal pattern. If ending diagonal was really unfolding, it would have resulted in a sharper market decline over the last few days (when we had first discussed this possibility) without it being discussed so widely on the internet. But instead, market has remained steady. This suggests that the market instead is consolidating, in a pattern normally missed by the masses. This same pattern was seen in late 2009 and has been seen at other times. 

It results in a continued movement in the primary trend. Therefore, we could see a sharp rally out of the IPM bottom window.

We will discuss this pattern in the next update along with prices targets and stop levels.


Sunday, May 18, 2014

IPM Trade Matrix - Trade 10 (Part 4)

Market has gone net sideways for a while, which makes it very difficult to accurately decipher future market action. One thing that we have learnt over the years is forecasting a market beyond next couple of weeks is not a very healthy and accurate exercise. That is why we came up with the IPM turn model, followed by IPM trade matrix.

IPM Model suggests that we are within IPM bottom window. IPM trade matrix has triggered long trades. So in essence, market should move higher for the next few days. There is another IPM turn window coming up (details have been emailed to subscribers). IPM trade matrix will not trigger short until unless, certain criteria is met. Criteria will be shared, if situation evolves into a change of trend type of scenario.

But right now, it seems likely that market wants to move higher and leave many of the people on the sidelines.
 

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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%
TRADE - 9: (Short - 4/30/14 to 5/12/14) +0.3%

TRADE - 10: 
Bought TNA at 68.5. More longs were added at 63.5. New Cost Basis: 64.7

TRADE CONDITIONS
When: IPM Model Bottom window - Date info e-mailed to subscribers
Next IPM Turn Window: Top
Trigger: SP500 = 1876, GDOW = 2535
Supporting Indicators: 8/4 Test negated. Uptrend reinstated.  

PROFIT TARGETS
Profit Target 1: 1930
Profit Target 2: -

RISK 
Stop: New low outside of IPM turn window
Trailing Stops: - 
Typical IPM Trade Matrix Risk: -
Actual IPM Trade Matrix Risk: - (Entry = 1879 , Exit = - , Risk = - )
Risk Reason: Ending diagonal pattern.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  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.



For Blog updates on Google+ add: Understand Survive Thrive 
For Blog updates on Twitter, add: @survive_thrive
For E-mail updates: 

Thursday, May 15, 2014

IPM Trade Matrix - Trade 11 (Part 3)

Longs will be added on the trigger. Detailed IPM turn window along with expiration date has been emailed to subs. Market is very confusing right now. There is only one caveat i.e. ending diagonal pattern in DJIA might be completed. This could result in sharp decline. But for now, IPM trade matrix will be going long.

Please note that today's decline was in line with IPM model bottom window. This shows IPM model's timing is still very valid.
 

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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%
TRADE - 9: (Short - 4/30/14 to 5/12/14) +0.3%

TRADE - 10: 
Bought TNA at 68.5. Will buy more on a trigger.

TRADE CONDITIONS
When: IPM Model Bottom window - Date info e-mailed to subscribers
Next IPM Turn Window: Top
Trigger: SP500 = 1876, GDOW = 2535
Supporting Indicators: 8/4 Test negated. Uptrend reinstated.  

PROFIT TARGETS
Profit Target 1: 1930
Profit Target 2: -

RISK 
Stop: New low outside of IPM turn window
Trailing Stops: - 
Typical IPM Trade Matrix Risk: -
Actual IPM Trade Matrix Risk: - (Entry = 1879 , Exit = 1867 , Risk = 0.6% )
Risk Reason: Ending diagonal pattern.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  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.



For Blog updates on Google+ add: Understand Survive Thrive 
For Blog updates on Twitter, add: @survive_thrive
For E-mail updates: 

Current Trade Overview

If I say market has been confusing for the last 2 months, it will be an understatement. In fact, market has pretty much gone sideways since November last year.

Now we are within IPM bottom window (cannot give exact date when it will expire). Following logic goes into the trade at IPM bottom window.

First is to identify the trend. Trend is clearly up in sp500 djia and global Dow. Small caps are in a downtrend, but majority is not.

Secondly, since the trend is up one must take long trade in an IPM bottom window. We are in a bottom window, so long trade is logical. Now the market has to bottom within the window I.e. It might bottom on the last day (which is a low prob right now). This identification of bottom and long trade is followed by Long trade trigger knowledge.

There are essentially two triggers. One in the 1st 4 days and 2nd during last 4 days. If trigger in the first 4 days is triggered, partial long entry takes place because if higher risk of pull back. Full long takes place in the last 4 days when the risk is minimized due to time and price bounds.

Once trigger takes place and trade is entered, stops r identified based on Elliott wave critical levels and other props. Right now, the stop would be around 1870 in Sp500.

This is all about the trade and there is a potential for adding longs till IPM window expiry. If a new low is made below the low made within IPM turn window, all trades will be exited and we will be on sidelines.
Now subscribers already know that there is another IPM turn window close by. This window has acted differently in different scenarios. In a downtrend, it would have marked a lower high followed by a sharp de:clime. Whereas, in prior uptrends, it has marked continuos rise with high beyond IPM turn window. In any case, we will cross that bridge when we will reach there.

In summary, purpose if this post is to clarify IPM trade matrix's current logic. And how trade is taken based on thorough analysis, rayher than whim. Will keep twitter updated with additional longs.
 

Tuesday, May 13, 2014

IPM Trade Matrix - Trade 10 (Part 2)

Today's market action was more of a consolidation. Trend is up & looks like the market is ripe for another rally. At least till IPM turn window. According to latest compilation of the lessons learned, IPM trade matrix can now adapt to following situations:

  1. Weekly IPM Influence Window
  2. Handling of situation if market rallies or declines below IPM turn window inflection level.
  3. Handling of situation when two IPM turn windows are close to each other. This situation was seen in Nov 2013, Aug 2012, April 2013 etc.
  4. Enhanced trailing stops.
Next few trades will be interesting.


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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%
TRADE - 9: (Short - 4/30/14 to 5/12/14) +0.3%

TRADE - 10: 
Bought TNA at 68.5. 

TRADE CONDITIONS
When: IPM Model Bottom window - Date info e-mailed to subscribers
Next IPM Turn Window: Top
Trigger: SP500 = 1879
Supporting Indicators: 8/4 Test negated. Uptrend reinstated.  

PROFIT TARGETS
Profit Target 1: 1930
Profit Target 2: -

RISK 
Stop: SP500 = 1867, DJIA = 16500 and GDOW = 2513.
Trailing Stops: - 
Typical IPM Trade Matrix Risk: -
Actual IPM Trade Matrix Risk: - (Entry = 1879 , Exit = 1867 , Risk = 0.6% )
Risk Reason: Risk is high because we are outside of the IPM turn window. This makes it difficult to time the turn exactly.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  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.



For Blog updates on Google+ add: Understand Survive Thrive 
For Blog updates on Twitter, add: @survive_thrive
For E-mail updates: 

Monday, May 12, 2014

IPM Trade Matrix - Trade 9 (Part 7) & IPM Trade Matrix - Trade 10 (Part 1)

I have a strange dilemma. I cannot share the actual IPM Model turn dates because they are sent to subscribers, but want to share the trades as they happen. For example, today's rally came at a time which subscribers already knew about. This time frame was supposed to mark a market bottom. 

With today's rally buy signal was generated and downtrend was negated. Therefore, we are now again in an uptrend and will be taking the long trade. IPM trade matrix entered a partial long trade, as soon as shorts were exited. 

Current market action suggests that the uptrend remains intact, at least till next IPM turn window. This turn window has already been emailed to subscribers. 

Lessons Learned from Last 2 Months:

  1. In an re-entry trade (whether upside or downside) always exit half at pre-determined profit objective
  2. If a market makes a higher high or lower low in certain prop indices (outside of IPM turn window), no trade in the opposite direction. This rule would be applicable Aug 2012, Nov 2013, April 2012, April 2013, April 2014.
  3. No Re-entry trade during WIIW (Weekly IPM Influence Window).

In short, we have learned very valuable lessons over the last 2 months, which will help us throughout our trading voyage. Best part is that IPM trade matrix is evolving and is becoming all-encompassing with time. This will be a great asset in future. 

As for trade 10, one of the market rules is that in an uptrend, IPM trade matrix trades long. As a result, IPM trade matrix has gone long. This trade will be exited at either pre-determined profit objective or stop level, which is below yesterday's low. Since we are in uptrend, market would have to trigger a sell signal before a short trade is triggered in the next IPM turn window (already sent to subscribers)



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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%

TRADE - 9:
Bought TZA at 17.35. This is an aggressive short position. Shorts were added on 4/30 and 5/2. Exited at 17.40. Profit =  +0.3%

TRADE CONDITIONS
When: Outside of IPM turn window in a downtrend - Date info e-mailed to subscribers
Next IPM Turn Window: Bottom 
Trigger: SP500 = 1881 (Aggressive), DJIA = 16520 (Aggressive), GDOW = 2519 (Aggressive)
Supporting Indicators: 8/4 Test completed to the downside. Downtrend in effect.  

PROFIT TARGETS
Profit Target 1: 1830
Profit Target 2: 1770

RISK 
Stop: SP500, DJIA and GDOW = Above early April high ==> A rally above early April highs in all 3 indices will negate 8/4 test to the downside i.e. trend will change to UP again.
Trailing Stops: - 
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: 0.2% (Entry = 1881 , Exit =1885 , Risk = 0.2% )
Risk Reason: Risk is high because we are outside of the IPM turn window. This makes it difficult to time the turn exactly.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  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.



For Blog updates on Google+ add: Understand Survive Thrive 
For Blog updates on Twitter, add: @survive_thrive
For E-mail updates: 

Thursday, May 8, 2014

IPM Trade Matrix - Trade 9 (Part 6)

Market Overview

Today's market action was yet another confusing day. However, it brought the ending diagonal pattern to the forefront again. The best part with the ending diagonal pattern is  that it has its limits for prices. As long as the price limits are not violated, pattern remains valid. However, as soon as the price limits are violated, pattern is invalid.

A similar situation arose this morning, market rallied sharply. And around 11:43 AM, following tweet was published. DJIA topped at 12:41 @ 16,622. This is pretty amazing for an Elliott Wave analysis call.


Ending diagonal pattern in DJIA is shown below. One of the characteristics of an ending diagonal pattern is that once it breaks, prices retrace in an impulsive manner to the area of the origin. Earlier this week, market did not breakdown in an impulsive pattern and also did not make a lower low. This market action suggested that the pattern is still not complete. And that is why, a stop level was not published for DJIA in yesterday's update.



In the above chart, one can clearly see an overlapping wave structure, making waves a,b,c,d,e. Furthermore, each sub-wave is divided into 3-waves (a characteristics of the ending diagonal). This level is also occupied by a long-term resistance line, which makes it even more interesting. Finally, one can see an overlapping ending diagonal within wave e. In short, this is a very critical juncture for the market. If the market breaks down from this long-term ending diagonal, we should expect much lower prices. Otherwise, if this pattern is invalidated, we will see higher prices and will position accordingly.

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 - 2/11/14 to 2/22/14) = +9.8%
TRADE - 6: (Long - 2/22/14 to 3/07/14) = +11.7%
TRADE - 7: (Long - 3/18/14 to 4/11/14) = -18.1%
TRADE - 8: (Short - 4/23/14 to 4/28/14) +11%

TRADE - 9:
Bought TZA at 17.35. This is an aggressive short position. Shorts were added on 4/30 and 5/2. 

TRADE CONDITIONS
When: Outside of IPM turn window in a downtrend - Date info e-mailed to subscribers
Next IPM Turn Window: Bottom 
Trigger: SP500 = 1881 (Aggressive), DJIA = 16520 (Aggressive), GDOW = 2519 (Aggressive)
Supporting Indicators: 8/4 Test completed to the downside. Downtrend in effect.  

PROFIT TARGETS
Profit Target 1: 1830
Profit Target 2: 1770

RISK 
Stop: SP500, DJIA and GDOW = Above early April high ==> A rally above early April highs in all 3 indices will negate 8/4 test to the downside i.e. trend will change to UP again.
Trailing Stops: - 
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: 0.2% (Entry = 1881 , Exit =1885 , Risk = 0.2% )
Risk Reason: Risk is high because we are outside of the IPM turn window. This makes it difficult to time the turn exactly.

Applicable Rule: 
  1. Sell (1/2) at profit objective 1 to minimize draw-down
  2. No Trade in opposite direction
  3. Do not go long or short without trigger to prevent losses by market moving against you.  
  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.



For Blog updates on Google+ add: Understand Survive Thrive 
For Blog updates on Twitter, add: @survive_thrive
For E-mail updates: