128 replies to this topic

[diogenes227]

Following up on yesterday's Nasdaq Summation Sell. The New York Summation, which was dead flat yesterday, gave its sell signal today.

What a great rally this was! The leveraged ETFs on the NYSI sell signal finished as follows: UWM up 42 percent, SSO up 36 percent, QLD up 30 percent, and TNA up 59 percent.

Until further notice, it's now be flat, or net short, or shorting the bounces...

Good trading to all.

http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=5&dy=0&i=p93444397935&a=163053782&r=6459.png

[SilentOne]

Nice work diogenes227. What a great board! cheers, john

[mdszj]

Diogenes I just joined traders talk and have been looking around a bit, looks like some very smart people on here. But your strategy is really awesome. I just finished reading this thread and will re-read it again to absorb it better when I get a little more time. Great job! I am sure I will have some questions for you soon, thx.

[kssmibotm]

Diogenes, Looks like the NYMO has crossed above the zero line and NYSI has ticked up. Is'nt that a buy signal? KMB

[diogenes227]

Diogenes,

Looks like the NYMO has crossed above the zero line and NYSI has ticked up. Is'nt that a buy signal?

KMB

Yes.

[diogenes227]

Diogenes,

Looks like the NYMO has crossed above the zero line and NYSI has ticked up. Is'nt that a buy signal?

KMB

Yes.

For the record, a combination of leveraged short ETFs (SDS, QID, TWM) was stopped out for a loss of 5.33 percent on the Summation buy signal Friday. The combination of leveraged long ETFs (SDS, QLD, UWM), that replaced them on the buy signal were up more than 5.5 percent today.

Good trading to everyone.

http://stockcharts.c...3862&r=4093.png

[Scott-stock]

Diogenes Do you have the formulas for both the Trader and Investors summations, etc in EXcel Thanks

[mdszj]

Diogenes Was wondering what you base your stop loss points on, for example, a few cents below previous day low, or a certain S/L level, etc? Also - I missed the buy signal frmo last night/this morning, am wondering if it is generally not a good idea to jump in a day late. Any thoughts? thx for any info on this.

[diogenes227]

Diogenes

Do you have the formulas for both the Trader and Investors summations, etc in EXcel

Thanks

I use Trade Station, which calculates the Oscillator and Summation Index in real time.

For the Excel formula, try:

http://www.mcoscilla...Oscillator.html

If you're interested in studying this in detail, you probably ought to subscribe to the McClellan site, at least for a time. By the way, the use of "trader" and "investor" at the top of this thread is my designation for trading time frames. Most traders can use the Oscillator and trade in context with the rising or falling Summation index -- be long when it's rising, flat or short when it's falling.

If I was running a hedge fund with a bunch of billions, I might use the Summation as if it was the Oscillator itself and plant a few billion here and uproot a few billion there on divergences in the Summation.

Good trading to you. Hope that helps.

[diogenes227]

Diogenes

Was wondering what you base your stop loss points on, for example, a few cents below previous day low, or a certain S/L level, etc?

Also - I missed the buy signal frmo last night/this morning, am wondering if it is generally not a good idea to jump in a day late. Any thoughts?

thx for any info on this.

For the purpose of this thread, I've been using the Summation simply as a stop and reverse point. Be long when it's rising, short when it's falling. But in reality, there is much to be said for selling into strength and buying weakness (using the lows-above-lows and high-below-high divergences in the McClellan Oscillator itself, especially late in a move) since the Summation often lags the turns.

Other than that, stops, of course, are a very personal with traders, primarily based on risk tolerance. How much can you stand it going against you? For instance, I can hardly stand any draw down. I want a trade to go my way from minute one. So in day trading, stops are extremely tight -- like if I buy something above the open, the low of that day is likely the stop, and I will move the stop to open itself just as soon as I have the room to do it. Below the open leads to a red candle on the daily and red candles on the long side are never good.

As to your "a day late" question, Linda Bradford Raschke, a great trader, once said the quick and easy way to enter on on-going move after you missed its beginning is to wait for a down day (or days), and buy the next up day. That's as good a method to get over what is truly a psychological hurdle as any. I've sort of marked those points during the last rally on the SPX chart above. In that case, I'd suggest using the low of the day you enter or the low of the previous down day as the stop. Using the SPX chart, it looks as if you might be stopped twice using the previous down day stop, but by jumping back in on the next up day, would capture a considerable portion of the move on that rally.

Ms. Raschke also once said: "Never take a loser to bed." That's a great stop too, to say nothing of the fact it's a great lesson in life.