173 replies to this topic

[diogenes227]

Sold second half of TNA on the close for a 4 percent gain.

The buy signal which began with the low above a low on the NYMO on the close of Oct. 10th ended in a sell signal with the high below a high on the NYMO on the close today. It was a seven trading-day swing, yielding the aforementioned 4 percent overall on TNA from close to close. Not a great swing but given it's a bear market any profits on the long side are to my mind just fine. The fifty stocks I follow, my "nifty-fifty", were down .6 percent (again, a sign of the bear).

For fun, and for what it's worth, let's mention a few other 3X ETFs on this swing: UPRO netted 3.3 percent; TQQQ, 4.5 percent; DRN 2.7 percent; FAS, 2.0; and to prove once again Linda Raschke's suggestion that if you always take the signal sometimes you just get lucky -- ERX netted 14 percent in these seven days!

It should be noted that the sell signal that is now in place has to deal with the cross current of a rising NYSI. In other words, stops on shorts as per one's individual risk tolerance are, as always, a must.

Good luck and good trading.

http://stockcharts.c...1656&r=9683.png

[diogenes227]

Again, lows above lows on the NYMO are buys, highs below highs are sells (chart updated). Good luck and good trading.

Edited by diogenes227, 27 October 2011 - 02:04 AM.

[edamat]

hi, Diogenes: would NYMO makes a low above low today that would be a buy signal for aggressive trade? thanks

[diogenes227]

hi, Diogenes:

would NYMO makes a low above low today that would be a buy signal for aggressive trade?

thanks

Assuming there is no blistering sell off into the close, yes.

[diogenes227]

Just did a back test as an annual review and evaluation of the NYMO system I've been posting and writing about all year. My mantra in these posts over the years has been for long trades to look for a low above a low on the NYMO at a cycle bottom (which is usually clued by a deep sell off on the oscillator), followed by a NYSI upturn to confirm the reversal. That is still the context but as everyone knows the NYSI lags so one has to look to lows above lows on the NYMO to anticipate the NYSI's up turn (the aggressive trader's buy) and highs below highs on the NYMO as a warning of the NYSI eventual down turn (or an aggressive trader's sell). In a bull market it often takes several high below highs to turn down a rally; in a bear market sometimes only one. All of these are evident on any McClellan chart. That is not what is tested here. This review and evaluation is merely a simple test in Trade Station to see how it performed mechanically without emotion and without stops. And without compounding -- that is to say trading a static amount on each trade (for example, putting $1m on each trade regardless of the previous trade's net). Again, a high below a high on the NYMO is a sell or a short, a low above a low on the NYMO is a buy as noted on the chart below: There were 15 buys this calendar year and 14 sells (nice and tidy to end on the day of a signal). On TNA only 52 percent of the trades were profitable but trading TNA long netted about 21.5 percent, short netted 35.6 percent; stopping and reversing would net approximately 57.1 percent on the capital used (about $570,000 per million). It should be noted that this is a test of purely mechanical signals without stops and after the market break and first big plunge in August there as been a significant draw down during the sideways chop since then. With a prudent use of stops (a must, always, ALWAYS!) that draw down was eliminated and the system on a stop and reverse netted 63.4 percent on signals that were 66 percent profitable overall (73 percent profitable on longs), but a definition of the term "prudent use of stops" at the beginning of this sentence is another story. It also be noted this year's return was the least return for this system in any of the last three years. Happy New Year! And may everyone this coming year have good luck and good trading.

[diogenes227]

I kind of think I've said this before but I'll say it again anyway -- look for a low above a low on the NYMO (after a deep sell off, the aggressive trader's buy) and then look for an upturn in the NYSI soon after to confirm the rally. If I may rewrite an old maxim -- the breadth is your friend. McClellan signals are simple and precise -- there is either a low above a low on the NYMO or there isn't, the NYSI is either going up or it isn't. Not a lot of room for interpretation. And sometimes that combination of signals falls apart (mostly in bearish times) and sometimes they lead to a strong rally, like the one going on now.

On the current NYSI rally it so happens both of those events happened to happen on the same day, Dec 20th of last year. But given that the NYSI lags on up turns and down turns, there come times when starting to clear the table on strength before the feast is finished avoids overeating, heart attacks, and might just let one live longer. Today might be as good a day as any to start cleaning up.

Some examples of what can a happen with a strong NYMO/NYSI rally:

Among the leveraged ETFs on this rally (at the moment): TNA is up approximately 23 percent; TQQQ up 25 percent; UPRO up 17 percent; FAS up 28 percent; DRN up 24 percent; UYM up 23 percent; and a leader, SOXL up 46 percent; and a laggard, ERX, up 11 percent.

Among notable stocks: AAPL, up 14 percent; IBM up 22 percent; BAC up 37 percent; GS up 22 percent, FSLR (one of my favorites for philosophical reasons), up 28 percent; and a leader, NFLX, up 66 percent; and a laggard, AMZN, up less than one percent.

Among the stocks that happen to be in my "nifty-fifty": CF, up 27 percent; TPX up 29 percent; WTW up 31 percent; and because nothings perfect, there are also losers: CRR down 23 percent, QCOR down 21 percent. And if one happened to own GGC in the window of this NYSI rise, it's up 90 percent on a buyout -- as Linda Raschke says...(see the sayings below ).

I'm posting these examples just for a perspective on the magic that sometimes happens in the context of the McClellan Oscillator.

Good luck and good trading.

P.S. Posted this on Fearless Forecasters yesterday and today, linking it here for the record:

28 DAYS LATER

Good luck and good trading.

Edited by diogenes227, 31 January 2012 - 02:10 PM.

[diogenes227]

I kind of think I've said this before but I'll say it again anyway -- look for a low above a low on the NYMO (after a deep sell off, the aggressive trader's buy) and then look for an upturn in the NYSI soon after to confirm the rally. If I may rewrite an old maxim -- the breadth is your friend. McClellan signals are simple and precise -- there is either a low above a low on the NYMO or there isn't, the NYSI is either going up or it isn't. Not a lot of room for interpretation. And sometimes that combination of signals falls apart (mostly in bearish times) and sometimes they lead to a strong rally, like the one going on now.

On the current NYSI rally it so happens both of those events happened to happen on the same day, Dec 20th of last year. But given that the NYSI lags on up turns and down turns, there come times when starting to clear the table on strength before the feast is finished avoids overeating, heart attacks, and might just let one live longer. Today might be as good a day as any to start cleaning up.

Some examples of what can a happen with a strong NYMO/NYSI rally:

Among the leveraged ETFs on this rally (at the moment): TNA is up approximately 23 percent; TQQQ up 25 percent; UPRO up 17 percent; FAS up 28 percent; DRN up 24 percent; UYM up 23 percent; and a leader, SOXL up 46 percent; and a laggard, ERX, up 11 percent.

Among notable stocks: AAPL, up 14 percent; IBM up 22 percent; BAC up 37 percent; GS up 22 percent, FSLR (one of my favorites for philosophical reasons), up 28 percent; and a leader, NFLX, up 66 percent; and a laggard, AMZN, up less than one percent.

Among the stocks that happen to be in my "nifty-fifty": CF, up 27 percent; TPX up 29 percent; WTW up 31 percent; and because nothings perfect, there are also losers: CRR down 23 percent, QCOR down 21 percent. And if one happened to own GGC in the window of this NYSI rise, it's up 90 percent on a buyout -- as Linda Raschke says...(see the sayings below ).

I'm posting these examples just for a perspective on the magic that sometimes happens in the context of the McClellan Oscillator.

Good luck and good trading.

P.S. Posted this on Fearless Forecasters yesterday and today, linking it here for the record:

28 DAYS LATER

Good luck and good trading.

What a difference a week makes! Now, from the close of Dec. 20th when the NYSI turned up, TNA is now up 40 percent, TQQQ 35 percent, UPRO, 26 percent, FAS 45 percent, DRN 33 percent, UYM 31 percent, SOXL 59 percent, and ERX which was lagging last week is now up 24 percent. Notable moves in the above mentioned stocks included BAC moving up to 54 percent, FSLR to 41 percent, NFLX to 80 percent.

As monitored by the McClellan Oscillator and Summation index, this is breadth -- the mass psychology of the market -- driving these prices, this time spectacularly.

Good luck and good trading.

[CLK]

On your yearly wrap up chart, if you were to use the next signal as an exit of the previous signal the gains were mostly a wash, there is nothing in that system to tell you when the right time to take profit is. I guess if you just picked 5% conservatively you could bank that on every signal.

[diogenes227]

On your yearly wrap up chart, if you were to use the next signal as an exit of the previous signal
the gains were mostly a wash, there is nothing in that system to tell you when the right time to take profit is.
I guess if you just picked 5% conservatively you could bank that on every signal.

What is demonstrated on the wrap-up chart is a stop and reverse system for the calendar year 2011. The right time (and only time) to take profits (or losses) in a stop-and-reverse system is when the signal reverses.

There were 15 buys this calendar year and 14 sells (nice and tidy to end on the day of a signal). On TNA only 52 percent of the trades were profitable but trading TNA long netted about 21.5 percent, short netted 35.6 percent; stopping and reversing would net approximately 57.1 percent on the capital used (about $570,000 per million).

That was not a wash. I can't imagine how you can even think it is was. Each entry and reversal is marked on the chart.

You might be well served to consider the possibilities. Nothing is foolproof. Market character changes. Sometimes it's a bear, more often it's a bull. It always takes persistence, discipline and experience to trade the market successfully. Playing defense is never out of the question, it a function of discipline. Knowing, for instance, that shorting the current NYSI rise is generally a loser's game and possibly suicidal is a function of experience. Leaning how and when to get back in when you get knocked out is a function of persistence. But...but the possibilities with these McClellan tools, when you learn to use them to help you trade, are evident in my last two posts above. Sometimes the possible is spectacular.

I trade ETFs and stocks and don't pay much attention to anything else, but what were the possibilities for buying calls or selling puts during the NYSI rally since Dec. 20th?

Good luck and good trading.

Edited by diogenes227, 08 February 2012 - 01:27 AM.

[diogenes227]

I kind of think I've said this before but I'll say it again anyway -- look for a low above a low on the NYMO (after a deep sell off, the aggressive trader's buy) and then look for an upturn in the NYSI soon after to confirm the rally. If I may rewrite an old maxim -- the breadth is your friend. McClellan signals are simple and precise -- there is either a low above a low on the NYMO or there isn't, the NYSI is either going up or it isn't. Not a lot of room for interpretation. And sometimes that combination of signals falls apart (mostly in bearish times) and sometimes they lead to a strong rally, like the one going on now.

On the current NYSI rally it so happens both of those events happened to happen on the same day, Dec 20th of last year. But given that the NYSI lags on up turns and down turns, there come times when starting to clear the table on strength before the feast is finished avoids overeating, heart attacks, and might just let one live longer. Today might be as good a day as any to start cleaning up.

Some examples of what can a happen with a strong NYMO/NYSI rally:

Among the leveraged ETFs on this rally (at the moment): TNA is up approximately 23 percent; TQQQ up 25 percent; UPRO up 17 percent; FAS up 28 percent; DRN up 24 percent; UYM up 23 percent; and a leader, SOXL up 46 percent; and a laggard, ERX, up 11 percent.

Among notable stocks: AAPL, up 14 percent; IBM up 22 percent; BAC up 37 percent; GS up 22 percent, FSLR (one of my favorites for philosophical reasons), up 28 percent; and a leader, NFLX, up 66 percent; and a laggard, AMZN, up less than one percent.

Among the stocks that happen to be in my "nifty-fifty": CF, up 27 percent; TPX up 29 percent; WTW up 31 percent; and because nothings perfect, there are also losers: CRR down 23 percent, QCOR down 21 percent. And if one happened to own GGC in the window of this NYSI rise, it's up 90 percent on a buyout -- as Linda Raschke says...(see the sayings below ).

I'm posting these examples just for a perspective on the magic that sometimes happens in the context of the McClellan Oscillator.

Good luck and good trading.

P.S. Posted this on Fearless Forecasters yesterday and today, linking it here for the record:

28 DAYS LATER

Good luck and good trading.

What a difference a week makes! Now, from the close of Dec. 20th when the NYSI turned up, TNA is now up 40 percent, TQQQ 35 percent, UPRO, 26 percent, FAS 45 percent, DRN 33 percent, UYM 31 percent, SOXL 59 percent, and ERX which was lagging last week is now up 24 percent. Notable moves in the above mentioned stocks included BAC moving up to 54 percent, FSLR to 41 percent, NFLX to 80 percent.

As monitored by the McClellan Oscillator and Summation index, this is breadth -- the mass psychology of the market -- driving these prices, this time spectacularly.

Good luck and good trading.

NYSI sell today. Finally.

No more need to worry about selling too soon.

This great NYSI run is done for now and some of the final results from the buy on the close of Dec. 20th: TNA up 33 percent; TQQQ up 38 percent, UPRO up 26 percent; FAS up 43 percent; DRN up 27 percent; UYM up 25 percent; SOXL up 57 percent; and ERX up 21 percent. AAPL finished this long swing up 24 percent, BAC up 54 percent, and NFLX up 73 percent.

Have a good weekend.

Good luck and good trading.