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
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.
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:
- Sell (1/2) at profit objective 1 to minimize draw-down
- No Trade in opposite direction
- Do not go long or short without trigger to prevent losses by market moving against you.
- Observe stop-losses to minimize draw-downs
- If stops are hit ==> Wait on the sidelines for new opportunity near IPM Turn window
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We are at point of recognition. If today's gap up holds, people will start adding long, cover shorts and realize that the trend is up. This will add a lot of fuel to the fire. This rally will lead to a near term market top which will result in 1-2 weeks of decline. Unlike the majority, IPM Trade Matrix added longs on & around May 19 by the grace of God. Around May 19, market declined by 140 points and people panicked out of their positions but IPM trade matrix kept us long.
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