IPM Trade Matrix Update - Trade 6 (Part 7)

Overview:

Still Long market. Market is in a trending mode at this point in time. And we could see another rally phase starting very soon.

• 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

So far, IPM trade matrix has kept us on the right side of the market. And has allowed us to make significant profit. It seems like the pendulum has started to swing in the negative direction, and we might see a sell signal with IPM Turn Window (that will be amazing!!)

Also, we have started experimenting IPM Trade Matrix with options trading. If successful, this will be a big step forward for us. However, this testing is still in infant stages and therefore, will not be shared on the blog for next few weeks. As soon as we get some hard data, we will share it with readers.

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)

Original trade 6 longs were initiated on 2/7/14 based on IPM Trade Matrix Trigger. More longs were added on 2/24/14 and 2/26/14.  

TRADE CONDITIONS
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. Secondary long trigger was triggered on Monday with Ukraine's sell-off.
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 TARGETS
Profit Target 1 (SP500): 1908
Profit Target 2 (SP500): No target # 2 on 2nd trade

*TNA profit objectives have been hit. Agressive trailing stop scenario has been activated to preserve profits.


RISK
Stop: Break below SP500 = 1810, DJIA = 16000, GDOW =  2440
Trailing Stops: With TNA profit objectives being met, aggressive trailing stop scenario is now active. Close below SP500 = 1867 , DJIA = 16330, GDOW = 2485

Typical IPM Trade Matrix Risk: 1.5%
Actual IPM Trade Matrix Risk: 0% (Entry = 1850, Exit = 1867, Risk = 0% )
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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