Thursday, February 6, 2014

Market Analysis, Employment Data and Trade

Today's market rally came as expected. Although today's rally took many by surprise, others got even more bearish on stock market's future direction. This can be a good or bad assumption. There is no way to know for sure if the market is going to go up or down, ahead of time. However, one thing that we do know is that the market is setting up to follow scenario 2 (as defined in last nights update).

We will continue to monitor market's structural developments in conjunction with the IPM Turn Date and Market Matrix.

Tomorrow morning will bring non-farm payroll data. Although this report will give clarity on job creation activity in the U.S., structurally markets are getting ready for a rally tomorrow. Following chart shows scenario 2 in close-up.

Based on this structural interpretation, market (SP500) could rally up to mid-1780s. This rally will give way to a sharper decline.Although one can use alternative counts to talk about other possibilities like new lows into high 1600s, we will keep it simple and let the market show us its hand. This means that we will use IPM Trade Matrix to trade during the next IPM Turn Window.

As far as the IPM Trade Matrix is concerned, today's rally validated Trade Matrix's yesterday's exits based on statistical analysis and proprietary exit criteria. With yesterday's exits, we are now all cash and waiting for next IPM Trade Matrix signal.

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/Short?

Condition: Within IPM Turn Window (Bottom/Top) - Info already sent to subscribers
Trigger: - 
Supporting Indicators: Up Trend OR Absence of decline intensity + Next IPM Turn window is 3+ weeks away

Profit Target 1: -
Profit Target 2: - 

Stop: After trade is triggered
Trailing Stops: - 
Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: N/A (Entry = - , Exit = - , Risk = - )
Risk Reason: -

Applicable Rule: 
  1. Do not go long or short without trigger to prevent losses by market moving against you.  
  2. Will be shared over the next week

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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  1. hi, do u mean the rally could be up to 1780s, instead of 1980s?

  2. yes. I have fixed it in the blog. Thanks for the catch.


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