Green Swing Trade

There's still positive energy left in the market's momentum account (R2). We're at a point right here where that status could change with a big down day or two. RSquared is at levels where changes of trend have occurred before (see 10/05/09). What I look for with this and other indicators is a relatively safe entry point for a multi-day swing trade. We've discussed here many times before the advantage traders have in trading with the trend. Where the slope (positive or negative) of a 200 day s.m.a. is an excellent guide for longer-term investor/traders...RSquared is helpful in spotting strength of trend turning points for those of us who like to trade a shorter to intermediate-term timeframe. It helps me spot where to look for the initial swing in a swing trade.

Breadth did a nice uptick yesterday and gave a buy signal on one of my breadth indicators, Binary Waves. DE/AD Q's close to a buy. My fearless forecast is for a rally for a few more days to new highs then a tradeable shorting opportunity. I'm flat the market right now and don't see a favorable risk/reward in opening a new long position at this late stage of the current green swing set-up. IMHO, the next, best op. will be a red swing trade. I'll be looking.....Best. (2 charts)

U.F.O.

UFO,
Thanks for sharing the chart. But I was wondering if you can explain how you use this R-square in more details? So it's the R-square of a regression of what? And how do you read strength? I noticed that the line changed the direction in the middle of a trend, like between Oct 5-19 and between Oct 19-Nov 2. What does that mean? Sorry I have so many questions. I just want to understand your charts. I'm more of a person of common indicators but would love to learn new things.

Thanks again!

SuperSwing

There's still positive energy left in the market's momentum account (R2). We're at a point right here where that status could change with a big down day or two. RSquared is at levels where changes of trend have occurred before (see 10/05/09). What I look for with this and other indicators is a relatively safe entry point for a multi-day swing trade. We've discussed here many times before the advantage traders have in trading with the trend. Where the slope (positive or negative) of a 200 day s.m.a. is an excellent guide for longer-term investor/traders...RSquared is helpful in spotting strength of trend turning points for those of us who like to trade a shorter to intermediate-term timeframe. It helps me spot where to look for the initial swing in a swing trade.

Breadth did a nice uptick yesterday and gave a buy signal on one of my breadth indicators, Binary Waves. DE/AD Q's close to a buy. My fearless forecast is for a rally for a few more days to new highs then a tradeable shorting opportunity. I'm flat the market right now and don't see a favorable risk/reward in opening a new long position at this late stage of the current green swing set-up. IMHO, the next, best op. will be a red swing trade. I'll be looking.....Best. (2 charts)

U.F.O.

Hi SS. Think of it this way...the peaks are points of transferred energy. As the indicator rises towards the peak the existing trend is weakening in strength. Not long-term trend, the IT trend that may only be a few days in duration. Right at the peak a new trend is developing and as the indicator falls from the peak this new trend has taken over and is at the beginning of it's swing trade value to traders. You'd have to Google it to get a textbook def. of the linear regression characteristics of this indicator. I can read it but couldn't tell you for the life of me how they calculate it. It comes with MetaStock as a canned indicator, I didn't program it. U.F.O.

I've been lurking for about 2 years and all this time I thought your R-squared indicator was a proprietary method you had worked out. LOL. I like the way you interpret it U.F.O. I will definitely try to add it to my own trading system. Thanks.

gotcha.

Hi SS. Think of it this way...the peaks are points of transferred energy. As the indicator rises towards the peak the existing trend is weakening in strength. Not long-term trend, the IT trend that may only be a few days in duration. Right at the peak a new trend is developing and as the indicator falls from the peak this new trend has taken over and is at the beginning of it's swing trade value to traders. You'd have to Google it to get a textbook def. of the linear regression characteristics of this indicator. I can read it but couldn't tell you for the life of me how they calculate it. It comes with MetaStock as a canned indicator, I didn't program it.

U.F.O.

Ticker..hahahahaha! That's great. Welcome to the board as a poster my friend. Naw, I've posted several times here that R2 was available on MetaStock as a part of the total package. The scarcity value of RSquared is that MetaStock is the only place I've ever seen it. In a trending market it can be an incredibly powerful tool. Choppy markets...difficult. Best...

U.F.O.

I'm using Prophet charts which has the indicator. The default is 14 periods. Is that what you are using?

I found the indicator in my software too. Trying to duplicate it. Doesn't look like 14.

Yeah, mine is 14-period, closing prices. U.F.O.