4 replies to this topic

[viccarter]

Also long some VXX and a little long SLV.  Short initial positon RUT @ close 3/9, based off very high distribution on Fri 3/9 NFP day, using RUT TRIN (Arms INDX using RUT breadth).  Really enjoyed the Richard Arms, RIP thread on here the other day.  We go to Santa Fe often and it crossed my mind several times over the years if I would have a chance to meet him once as I think he lived in Albuquerque.  Anyway distribution constant and all day long 3/9; bulls wanting the breakout; double top also in play - was nice spot for the short to set up on 3/12 small gap up.  Notice also distribution high on 3/6, but didn't like it there in that spot and based off the pattern the RUT was in - shorts needed to hurt more, and then they got some more body blows, and they were even MORE bullish on 3/9 hehe.  Why they call it discretionary trading.  We are in the opposite position now, longs need to hurt more.  Didn't like the way RUT went down y'day at all and was very close to covering it, but I held it and today is exactly what I was looking for to add short.

Edited by viccarter, 16 March 2018 - 04:03 PM.

[q4wer]

the only strong animal today is iwm

[Waver]

What is the basis for a day to be considered distribution as opposed to accumulation? Why were the days posted above considered distribution days?

TIA

[viccarter]

Hello, Waver.  I have posted on this in the past.  I use RUSSELL 2000 index as my main vehicle, and of course, since the correlation is >92% with SPX, it is valuable for SPX traders as well.  My TRIN theory is that on days where you have very HI TRIN using RUSSELL breadth rather than using NYSE breadth, you can assign a counting system kind of like blackjack to the subsequent action.  I view it as a very hi quality leading indicator, HOWEVER, it's use is discretionary, as there are many times when a HI RUSSELL TRIN is useless.  So I assign values: +2 long, +1 long, 0 or I cannot glean any useful information at this time, -1 short and -2 short.  I consider HI TRIN after a heavy downturn for a couple of weeks a +2 bullish.  One favorite pattern is HI TRIN on the first up day after a nice downtrend.  After that, when you get a reading during the middle of an uptrend, its a 0 usually - I don't know.  A neutral.  When I'm looking to short, its after an up move of a week or 2.  HI TRIN on a blowoff up day after a nice move up -- a short -1.  Don't look for too much, take your profits quick.  Prime example was last FRI 3/9 close.  A two week up move, I'm looking to get short, we top, we consolidate sideways, I get a HI TRIN reading on an up day - probably one of the best short signals known to man.

 

I use other things too, but my point is, the 3/9 close short was based exclusively on the distribution TRIN on 3/9 (RUSSELL breadth data), and it worked well.  I decided not to cover and keep the short into the 3/16 move up and hold it based on other factors.

 

Good luck in your trading, lets see how this works out.

[viccarter]

I will also point out that JUNE 2017-JAN 2018 was some of the worst performance for this indicator in my years of using it.  Probably this was do to the absolute lack of volitality and it was a blow off top on these indices, esp. that POS garbage known as the Dow Jones Industrial Average.  It will take years to digest the retarded moves in some of these names.  And you can guarentee they will have every excuse in the book as to why.