Seven Sentinels Sell Signal, At Today's Close Options

[IYB]

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.

[tommyt]

tommy, i actually see some people using today's vix down as a bullish reason to go long!!

I'm only commenting on the 3 things doing what they did today collectively, not VIX and up or down.

[zoropb]

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.

Shhhhhh you can't time them and TA does not work. Only buy and hold buy and hold buy and hold. Everyone knows that!

First thanks sir Don for the update.

sorry could not answer you today rk

Been a busy day got whipsawed a little in the am -3.25 dumped them went in dumped and finally bought them at 895.50... put cover GTC's on them for 811. +15.50 because had to leave for flight to Miami Beach and could not monitor it. I just shorted them 910.50 stop 911. I think we need to print lower tomorrow say around 892ish+- on cash then back up for a good pop back to maybe 916 area. Hey lucky guess today on 915.

Z

[maxter267]

thanks for the update IYB!

[darnelds]

IYB
I missed the top. Dang day job. Any chance we get a bounce into Friday?
Thanks

[thespookyone]

Nice call.

[skott]

IYB, is the stop on your SSSS trades a SSBS?