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Seven Sentinels Sell Signal


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#1 IYB

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Posted 12 May 2009 - 05:35 PM

I'm short NQ's at 1392.25. Will buy DXD, SDS, QID, TZA at opening tomorrow, and will post fills. Good trading, D

Reference Post 4-11-09

The rules:

1. When all seven are in buy mode simultaneously following positive divergency patterns (higher reading in the 6 day EMA's of NAMO, NYMO, NAHL, and NYHL--vs. new lows hit in SPX) -- This constitutes a Seven Sentinels Buy Signal. {This occured Weds 11-26, for example. Please notice the massive positive divergence between the October 9 lows and the November 20 lower lows on SPX- where virtually every momentum measure on Earth registered a positive divergence on the "retest"}

2. When all seven are in sell mode simultaneously following negative divergency patterns (lower reading in the 6 day EMA's of NAMO, NYMO, NAHL, and NYHL vs. new highs hit in SPX) -- This constitutes a Seven Sentinels Sell Signal. {This occurred many times in 2008}

3. A signal defines the CONTEXT of the market for my trading purposes, and stays in effect until the opposite signal is given. Occassionally signals only last a few days before being reversed, but more often they last weeks or even months- as the market tends to trend in the direction indicated. While the market is in SSBS mode, I may for example, buy and hold, or trade long positions using weakness to take on positions and strength to exit, or a combination of both, or any other appropriate bullish trading strategies. What I do NOT do during an SSBS period is try to countertrend by shorting strength or any other such counter trend strategy. And while in SSSS mode, I may for example, short and hold, or trade short positions using strength to take on positions and weakness to exit, or a combination of both, or any other appropriate bearish trading strategies. What I do NOT do during an SSSS period is try to countertrend by buying weakness or any other such counter trend strategy.

4. The seven sentinels each have, individually, a buy mode and a sell mode- and as explained above, it is the allignment of all seven under specific conditions that constitutes a signal and defines for me the context or prevailing trend of the market. Here are the individual buy/sell triggers:

TRINQ and TRIN: Daily reading below 13 Day EMA is buy mode, reading above 13 Day EMA is sell mode.

For NAMO, NYMO, NAHL, NYHL, daily reading above 6 Day EMA is buy mode, and reading below same is sell mode.

For BPCOMPQ, reading within the Bolinger Band following reading below constitutes buy mode, as do readings above and outside of BB following reading within the band. Put another way, either positive crossing constitutes buy mode. Reading within the Bolinger Band following reading above constitutes sell mode, as do readings below and outside of BB following reading within the band. Put another way, either negative crossing constitutes sell mode. It stays in buy mode or in sell mode until it recrosses in the opposite direction.


http://stockcharts.com/c-sc/sc?s=$NAMO&p=D&yr=0&mn=6&dy=0&i=p71281787216&.png
http://stockcharts.com/c-sc/sc?s=$NYMO&p=D&yr=0&mn=6&dy=0&i=p88893451391&a=132240665&r=4087.png
http://stockcharts.com/c-sc/sc?s=$NAHL&p=D&yr=0&mn=6&dy=0&i=p10831498101&a=132242597&r=5564.png
http://stockcharts.com/c-sc/sc?s=$NYHL&p=D&yr=0&mn=6&dy=0&i=p09668266403&a=132243114&r=6886.png
http://stockcharts.com/c-sc/sc?s=$BPCOMPQ&p=D&yr=0&mn=6&dy=0&i=p96303392716&a=132243312&r=1286.png
http://stockcharts.com/c-sc/sc?s=$TRIN&p=D&yr=0&mn=6&dy=0&i=p81980886219&a=132242143&r=6353.png
http://stockcharts.com/c-sc/sc?s=$TRINQ&p=D&yr=0&mn=6&dy=0&i=p91351991372&a=132242060&r=2644.png
http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=6&dy=0&i=p24356331235&a=163230813&r=4766.png
http://stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=6&dy=0&i=t86844597946&a=114816676&r=9930.png
http://stockcharts.c...3840&r=4879.png
http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=11&dy=0&i=p20175862770&a=161831573&r=9099.png


“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

#2 rkd80

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Posted 12 May 2009 - 05:55 PM

This makes me one happy bear! Bless you Don.
“be right and sit tight”

#3 IYB

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Posted 12 May 2009 - 06:01 PM

I'm short NQ's at 1392.25. Will buy DXD, SDS, QID, TZA at opening tomorrow, and will post fills. Good trading, D

Ooops. NQ's at 1382.25 per signature below. Sorry. Trying to do too many things at once....D
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

#4 klono

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Posted 12 May 2009 - 06:07 PM

IYB Thanks for the rules as well as the signal. Today I attended an annual investment advisor presentation. It was in an exclusive center city club. We had filet mignon and fish, wine, etc prior to the presentation. Two of the top fund managers spoke as did the heads of the investment advisors group. They stressed the importance of not trying to time the market, blah blah blah. My clients had dropped about 3.5 mill but have regained about 1 mill since 3/10. How do I explain their advisors are wrong and we should be following IYB and MSS from Traders Talk? k

#5 CHAx

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Posted 12 May 2009 - 06:10 PM

IYB just a thought: I got a buy on 65 min on both Qs and SPX. Now if you are right, and I expect you are, my signal should fail in the first opening 65 minute candle, followed by a confirming failure candle. Now my daily stuff is all hanging by a thread, so I pretty much expect to get blown out of my position, but I couldn't exactly ignore whats been working so well for the last 8 weeks. Anyway, sounds like you will get some money from me :). Any action tomorrow that you would consider a failure of your signal? Say a test of the highs (If my 65 minute signal is right, that is what I expect to happen)? News related, tomorrow is retail sales number before the open, that should get us ripping with a gap up/down.

#6 snorkels4

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Posted 12 May 2009 - 06:12 PM

have you had any fake-bad signals since rconfiguring
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#7 inamosa

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Posted 12 May 2009 - 06:24 PM

Thanks Don for the FYI I'm also seeing a shift in the IT trend and am about 60% sure we're turning right now Initial shorts have been entered (already been holding one set since Monday's close last week)
"Our job is not to predict where the market will go, but to interpret daily price and volume action to ascertain the facts of the current environment and make decisions based on that interpretation."
-Scott O'Neil (son of William O'Neil), Portfolio Manager at O’Neil Data Systems, when asked where the Dow would go in the coming months

#8 IYB

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Posted 12 May 2009 - 06:32 PM

They stressed the importance of not trying to time the market, blah blah blah.

I've been hearing that for 40 years now. Better not let Z and IT and a few others here know that "it can't be done" -- they'll all be out of work. :lol: :lol:
“Men, it has been well said, think in herds; it will be seen that they go mad in herds, while they only recover their senses slowly, one by one.” Charles Mackay, Extraordinary Popular Delusions and the Madness of Crowds

#9 OEXCHAOS

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Posted 12 May 2009 - 06:37 PM

"can't time the market..." It's intellectual dishonesty. EVERY active manager times the market. It's just a matter of degree. Hey, Don, thanks for posting that. It's good stuff. M
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#10 tuffy88

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Posted 12 May 2009 - 06:40 PM

Thanks for the report Don. The Nasdaq had its 4th distribution day today, and the Dow Industrials already had 4 distribution days. The S&P500 has 3. With the Investors Business Daily system 1 more distribution day for the Dow Industrials or the Nasdaq and that will be a sell for the system. Charles