www.collective2.com
My program is called 3DSNP - search for it - or I'll post a link here on another post.
For the unique and powerful 3-dimensional view of price, volume, and pricing which has given us so many successful trades so far.
You will be able to monitor the trades from there and you can have an account "auto-traded" based on the signals that I enter from my computer. All you do is set up your account and fund it, then subscribe to the signals.
It isn't cheap to subscribe, but then again the profits seem extraordinary.
So far today, the very BULLISH action in all the indicators has been challenging to catch. So far I've taken a couple of trades to catch the rally, but so far missed the move from 858 in the S&P futures up to 882. It required about 10 pts of risk down to 848 before it found traction and rallied.
Good fortune to you
Monday, November 17, 2008
Wednesday, November 12, 2008
AFTER - MARKET COMMENTARY
As we watch the World financial markets strain under the weight of unknown losses and the uncertainty with which the Federal Reserve and the US Gov't will stand behind whatever assets they choose to back - admitedly GM is NOT one of my highest choices of assets to save, but apparently Pelosi has decided it is worth saving. Well, it seems the financial markets have concluded that enough is enough. More market players decided to exit their short positions in the financially much stronger Japanese Yen - and they also exited their long positions in crude oil and gold. So, as a sideline comment to this crazy euphoria-for-change, well "WE'VE GOT CHANGE" happening.
I'll stop commenting on needless noise that the rest of the media handles so well ------
I keep a very close eye on the Yen because it alerts me to what is going on: If the Yen is up, I'm looking for what is being liquidated. Today that was gold and oil.
I saw a legitimate buy signal in the VIX-put-call but I failed to execute the stop and reverse strategy that I have employed successfully on three other occasions. So, after the first hour of heavy, heavy put buying, I waited 3 hours to execute a buy once momentum had turned to the upside - well - that momentum lasted all of about 15 minutes before the bombay doors opened some more to the downside.
So, since Mr. Obama was elected, the SP500 is down 15%. The rally INTO the election was 20%, which to my mind counts as a bull market just as a 20% decline counts as a bear market. So, we are almost back to a bear market again after only a couple of days at a 20% lift from the lows in October.
So, today was a losing day for the Vix-Put-Call Strategy. But I'm posting that here at the end of the day. A loss of 1.00 DIA pt.
4:15PM EST
I'll stop commenting on needless noise that the rest of the media handles so well ------
I keep a very close eye on the Yen because it alerts me to what is going on: If the Yen is up, I'm looking for what is being liquidated. Today that was gold and oil.
I saw a legitimate buy signal in the VIX-put-call but I failed to execute the stop and reverse strategy that I have employed successfully on three other occasions. So, after the first hour of heavy, heavy put buying, I waited 3 hours to execute a buy once momentum had turned to the upside - well - that momentum lasted all of about 15 minutes before the bombay doors opened some more to the downside.
So, since Mr. Obama was elected, the SP500 is down 15%. The rally INTO the election was 20%, which to my mind counts as a bull market just as a 20% decline counts as a bear market. So, we are almost back to a bear market again after only a couple of days at a 20% lift from the lows in October.
So, today was a losing day for the Vix-Put-Call Strategy. But I'm posting that here at the end of the day. A loss of 1.00 DIA pt.
4:15PM EST
SPY - NOT DIA
I am now quoting the SPY and not the DIA. I had to change it on my software (QCharts) when the powers that be moved the primary quoting to the NYSE from the AMEX for the DIA etf. The ETF's are very similar but it makes sense to be in the more liquid, more diversified SPY.
Tuesday, November 11, 2008
PUT BUYING = BUY SIGNAL FOR DIA
Heavy put buying from 9:30-10:00AM was, I think, a function of heavy European hedging and selling into our market.
We want to do a fade trade here and go long and then reverse and go short if the trade doesn't materialize.
What we are seeing here is a global hedging hot potato decline. Russia gets hammered, for example, and sells stocks in Europe. Europe buys, then tries to unload in the US by selling here when we open. If we don't find a home for this new selling, then it will be "OPEN THE BOMBAY DOORS" and let it fly (drop).
So, at this point, we want to be long. Let's pick 1PM for entry. Use a stop of 0.50 DIA pts instead of 1 pt.
If stopped out with a 0.50 pt loss, then go short and risk 0.75 pts so our total risk is 1.25 pts.
If that starts to work, then just cover at the close AFTER dropping your stop down to breakeven after it is up by 1.00 DIA pt. Sound complicated? Not really. Read it again and again if you have to.
12:52PM EST NOW
We want to do a fade trade here and go long and then reverse and go short if the trade doesn't materialize.
What we are seeing here is a global hedging hot potato decline. Russia gets hammered, for example, and sells stocks in Europe. Europe buys, then tries to unload in the US by selling here when we open. If we don't find a home for this new selling, then it will be "OPEN THE BOMBAY DOORS" and let it fly (drop).
So, at this point, we want to be long. Let's pick 1PM for entry. Use a stop of 0.50 DIA pts instead of 1 pt.
If stopped out with a 0.50 pt loss, then go short and risk 0.75 pts so our total risk is 1.25 pts.
If that starts to work, then just cover at the close AFTER dropping your stop down to breakeven after it is up by 1.00 DIA pt. Sound complicated? Not really. Read it again and again if you have to.
12:52PM EST NOW
Monday, November 10, 2008
CALL BUYING today was BEARISH (this morning)
I told all of my IM clients about this market setup today, which was positioned for a FALL due to several observations.
I simply can't continue to give away this information - it is extremely valuable and it is what I have taken years to learn and many losses along the way.
I am considering creating an account at Collective2 where you can follow the signals there and subscribe to the service and you can have an account auto-traded based on what I am seeing with the 3-D view of the market. www.collective2.com Once I get my log-in code I will alert you with a post here so you know how to find me.
Today's closing buy signal was more of a sign that the market had seen enough put-buying on Friday to warrant a strong base in place for today. However, if we test Friday's low tomorrow or later this week, then I will have to wonder how strong this current base is and then I may change my tune to suggest that we will violate the lows seen in the last month.
Let's take one day at a time with this strategy.
I am reading some great books lately - I imagine some of the pearls of wisdom will shine through to this blog.
Enjoy the day.
SIDE NOTE - One last thought - I am married to my wife, my kids, my family, my house, my responsibilities as a father, brother, son, and to God - so I don't have to be married to my investments. There are many ways to view the short-term nature of trading and its impact on the market itself and on ourselves as individuals, so I will assume that all of you are already aligned with short-term trading.
I simply can't continue to give away this information - it is extremely valuable and it is what I have taken years to learn and many losses along the way.
I am considering creating an account at Collective2 where you can follow the signals there and subscribe to the service and you can have an account auto-traded based on what I am seeing with the 3-D view of the market. www.collective2.com Once I get my log-in code I will alert you with a post here so you know how to find me.
Today's closing buy signal was more of a sign that the market had seen enough put-buying on Friday to warrant a strong base in place for today. However, if we test Friday's low tomorrow or later this week, then I will have to wonder how strong this current base is and then I may change my tune to suggest that we will violate the lows seen in the last month.
Let's take one day at a time with this strategy.
I am reading some great books lately - I imagine some of the pearls of wisdom will shine through to this blog.
Enjoy the day.
SIDE NOTE - One last thought - I am married to my wife, my kids, my family, my house, my responsibilities as a father, brother, son, and to God - so I don't have to be married to my investments. There are many ways to view the short-term nature of trading and its impact on the market itself and on ourselves as individuals, so I will assume that all of you are already aligned with short-term trading.
Sunday, November 9, 2008
This Is A Bull Market
The S&P500 has wiped out almost every financial firm that had leverage of greater than 10:1. Leverage in this case is the measurement of ROE/ROA. We don't have to delve deeply into financial statements to get these numbers, but it is fascinating that all of the firms in the S&P500 that were above that level are gone or merged or backed/bought by the US Gov't. SO, I COULD CONCLUDE that the leverage "in the system" has already been taken care of to a large extent.
The S&P500 is up 2% overnight here to get started for the week to confirm the "bull market".
Get ready for a busy day & week.
9:52PM Sunday Nov 9, 2008
The S&P500 is up 2% overnight here to get started for the week to confirm the "bull market".
Get ready for a busy day & week.
9:52PM Sunday Nov 9, 2008
Friday, November 7, 2008
BEARS ARE GETTING SQUEEZED (BUY SIGNAL)
This is a "squeeze the bears" day in the market.
Those who have overpaid for very expensive put protection are selling out their bets on lower prices and effectively putting a floor under stock prices today. I think what is happening is people who owned the puts are liquidating them and turning around with the proceeds and putting that money to work in the market. The successful pricing of the WFC 2ndary today at 27 is another positive sign for the market. Anything is interpreted as bullish news in a bull market. We can call this a bull market by some definitions. #1 reason - we have rallied 20% from the low. #2 reason - VIX peaked over 80. That will happen once a decade and it happens at bottoms. #3 reason - very low interest rates. #4 reason - very low investor sentiment implies that people have sold stocks down to their comfort level. #5 reason - massive mutual fund redemptions mean that the little investor is already OUT of the market now. #6 reason - all the markets of the world went down together, this was NOT a US-only decline. #7 reason - I'll think of another 50 reasons and put them on this blog - perhaps - stocks are cheap, very cheap and so-called "experts" fear now that the #'s reported by companies are not accurate.
Let's stop this line of thinking to explain this bull market and just get on with it.
Buy 88.72 last. 89.72 target. 87.72 stop.
Raise stop to breakeven after 1 hour (after 30 minutes raise to 88.22)
12:53PM
Those who have overpaid for very expensive put protection are selling out their bets on lower prices and effectively putting a floor under stock prices today. I think what is happening is people who owned the puts are liquidating them and turning around with the proceeds and putting that money to work in the market. The successful pricing of the WFC 2ndary today at 27 is another positive sign for the market. Anything is interpreted as bullish news in a bull market. We can call this a bull market by some definitions. #1 reason - we have rallied 20% from the low. #2 reason - VIX peaked over 80. That will happen once a decade and it happens at bottoms. #3 reason - very low interest rates. #4 reason - very low investor sentiment implies that people have sold stocks down to their comfort level. #5 reason - massive mutual fund redemptions mean that the little investor is already OUT of the market now. #6 reason - all the markets of the world went down together, this was NOT a US-only decline. #7 reason - I'll think of another 50 reasons and put them on this blog - perhaps - stocks are cheap, very cheap and so-called "experts" fear now that the #'s reported by companies are not accurate.
Let's stop this line of thinking to explain this bull market and just get on with it.
Buy 88.72 last. 89.72 target. 87.72 stop.
Raise stop to breakeven after 1 hour (after 30 minutes raise to 88.22)
12:53PM
Thursday, November 6, 2008
MORE BULLS AT THE OPENING
Call buyers showed up in the first 30 minutes of trading today to pay UP for Call options just in time for the stocks underlying their calls to plunge in value.
Well, I can presume that this is the perversity of the markets and the better question to ask yourself is "HOW DO I MAKE MONEY FROM THIS PATTERN?"
Due to other duties outside of posting to this blog, I missed posting a sell signal at this morning's opening 10AM trading window. Remember, we watch the first 30 minutes (9:30-10:00) to watch and wait for a trading setup.
Either way, at 10AM a very clear sell signal was in place and it worked for well over 1 pt down in the DIA.
As of 12:21PM now - we are inching towards a very low risk buy signal, much like yesterday's buy signal which was really just a resting period before the next leg down.
Either way, we can take a shot at this trade because it will work some of the time and enough of the time to warrant the risk taken.
Pay close attention to the next entry.
Be well.
12:23PM DIA 88.47 last
Well, I can presume that this is the perversity of the markets and the better question to ask yourself is "HOW DO I MAKE MONEY FROM THIS PATTERN?"
Due to other duties outside of posting to this blog, I missed posting a sell signal at this morning's opening 10AM trading window. Remember, we watch the first 30 minutes (9:30-10:00) to watch and wait for a trading setup.
Either way, at 10AM a very clear sell signal was in place and it worked for well over 1 pt down in the DIA.
As of 12:21PM now - we are inching towards a very low risk buy signal, much like yesterday's buy signal which was really just a resting period before the next leg down.
Either way, we can take a shot at this trade because it will work some of the time and enough of the time to warrant the risk taken.
Pay close attention to the next entry.
Be well.
12:23PM DIA 88.47 last
Wednesday, November 5, 2008
BUY SIGNAL
Price is down to key support at 93.37 here @ 12:47PM
Put-call volumes suggest heavy put buying.
VIX surge to 51.6 from 48 suggests near panic.
So, if we can panic while we fell to support, then we should buy.
RISK = 1.00 pt in DIA.
EXIT: 1.00 pt profit.
Raise stop 1.00 pt after 30 minutes.
12:48PM NOW
93.37bid-93.38 ask
Put-call volumes suggest heavy put buying.
VIX surge to 51.6 from 48 suggests near panic.
So, if we can panic while we fell to support, then we should buy.
RISK = 1.00 pt in DIA.
EXIT: 1.00 pt profit.
Raise stop 1.00 pt after 30 minutes.
12:48PM NOW
93.37bid-93.38 ask
Market Is Extremely Weak
I am glad we have NOT gone long here.
Will await a signal to go long or short.
The DIA is off nearly 3 pts from yesterday's high, which is quite a drop.
Something may set up here shortly.
12:32PM DIA 93.69 last
Will await a signal to go long or short.
The DIA is off nearly 3 pts from yesterday's high, which is quite a drop.
Something may set up here shortly.
12:32PM DIA 93.69 last
BEARISH SIGNS SHOWING IN FIRST HOUR
10:40AM right now.
The first 30 minutes of action revealed heavy call buying, which when coupled with the drop in the DIA in that time window = is extremely bearish.
The next 30 minutes has shown heavy put selling, which when couple with the fact that we are still DOWN on the day, is even MORE BEARISH THAN EXTREMELY BEARISH.
The question I have here is exactly how to put this info to work:
This could take 3 hours to set-up or this could be a sell signal right here- I'm tempted to just put the sell signal right on, right here and take the risk that it is wrong because I don't want to miss the decline.
OVERALL - VIX is 47.5 now, which shows tremendous illiquidity is still present in the market = THEREFORE, I'm aware that this signal could be wrong or early.
It is what it is - we never know.
I definately don't like the signs that I see here.
SELL DIA 95.34 bid here now at 10:44AM EST.
RISK: 1.00 PT.
STOP LOWERS TO BREAKEVEN after 1 hour (11:44AM).
It is possible that we don't break until the close, then fall dramatically overnight - that is the likely scenario as I see it from here (intuition) to keep our "intra-day strategy" from capturing the profit.
95.45 bid now.
95.35 bid....
95.27 bid...
95.35 bid...
10:47AM
The first 30 minutes of action revealed heavy call buying, which when coupled with the drop in the DIA in that time window = is extremely bearish.
The next 30 minutes has shown heavy put selling, which when couple with the fact that we are still DOWN on the day, is even MORE BEARISH THAN EXTREMELY BEARISH.
The question I have here is exactly how to put this info to work:
This could take 3 hours to set-up or this could be a sell signal right here- I'm tempted to just put the sell signal right on, right here and take the risk that it is wrong because I don't want to miss the decline.
OVERALL - VIX is 47.5 now, which shows tremendous illiquidity is still present in the market = THEREFORE, I'm aware that this signal could be wrong or early.
It is what it is - we never know.
I definately don't like the signs that I see here.
SELL DIA 95.34 bid here now at 10:44AM EST.
RISK: 1.00 PT.
STOP LOWERS TO BREAKEVEN after 1 hour (11:44AM).
It is possible that we don't break until the close, then fall dramatically overnight - that is the likely scenario as I see it from here (intuition) to keep our "intra-day strategy" from capturing the profit.
95.45 bid now.
95.35 bid....
95.27 bid...
95.35 bid...
10:47AM
Tuesday, November 4, 2008
VIX HAS FALLEN TOO FAR = SELL SIGNAL
[11:16:43 AM] Tim West says: I am very close to a "VIX HAS FALLEN TOO FAR" signal to go the opposite way
[11:16:59 AM] Tim West says: VIX is down o 45 from 50 at 10am...vs 55 yesrday
[11:18:50 AM] Tim West says: 10 point moves in VIX are pretty rare = a sign of extreme changes of opinion
[11:19:44 AM] Tim West says: and a 15 point move from yesterday's high of 60 in VIX = even more extreme
[11:20:11 AM] Tim West says: extreme changes in opinion can leave a vacuum under price action
DIA @ 96, now 95.84 over this time frame....
SELL SHORT DIA, 96.40 stop, vs 95.90 last
TARGET 95.00 (gain of 0.90 pt)
11:24AM NOW
[11:16:59 AM] Tim West says: VIX is down o 45 from 50 at 10am...vs 55 yesrday
[11:18:50 AM] Tim West says: 10 point moves in VIX are pretty rare = a sign of extreme changes of opinion
[11:19:44 AM] Tim West says: and a 15 point move from yesterday's high of 60 in VIX = even more extreme
[11:20:11 AM] Tim West says: extreme changes in opinion can leave a vacuum under price action
DIA @ 96, now 95.84 over this time frame....
SELL SHORT DIA, 96.40 stop, vs 95.90 last
TARGET 95.00 (gain of 0.90 pt)
11:24AM NOW
10AM (post-dating a signal here)
From my Instant-Messaging today:
BUY SIGNAL: 10AM:
Target: 1 DIA pt.
Stop: 1 DIA pt.
Target reached already:
Awaiting new signal setup.
11:09AM now as I type.
CODE: CV,VD
BUY SIGNAL: 10AM:
Target: 1 DIA pt.
Stop: 1 DIA pt.
Target reached already:
Awaiting new signal setup.
11:09AM now as I type.
CODE: CV,VD
SEP-OCT RESULTS = GAIN OF 26%
The profitability of this analysis is so strong that I am losing interest FAST in giving it away - so I will be working on how to design and charge for this advice.
September and October produced gains beyond my expectations and given the very high volatility in the market averages, it is logical to assume that returns are higher than normal.
However, the gain of 27 pts in the DIA when the average DIA trade price is 101 implies a gain of 26% for those two months. The largest drawdown was 2%. The profits were 18 pts on BUYS and 9 pts on SELLS, which is even more interesting given that the DIA dropped over 25% over the time period of this analysis - from DIA level 114 to a low of 85.
This is perhaps the largest reward to drawdown that I have ever seen with the exception to the Equity Market Neutral Fund that I managed in 2003-2004 which had a 1% max drawdown on a 13% return over the time window of that fund.
The INTRA-DAY ONLY time frame of this strategy is also extremely interesting in that it removes the higher risk, although higher potential of the overnight movements of markets. Lately the measurement of first 30 minute movement in the market is EXTREMELY HIGH.
On average, this method is signalling approximately 2-3 times per day and I am doing the analysis starting at 10AM and then in 30 or 60 minute increments. It is challenging to build the blog on every hour to update any changes and there are certainly enough distractions, but the overall performance is still extremely strong given this reality = that all signals were not taken.
I chose to stop publishing last week due to my interest in building the plan to charge for this lucrative advice.
Tuesday, November 4th 2008 11:00AM
The
September and October produced gains beyond my expectations and given the very high volatility in the market averages, it is logical to assume that returns are higher than normal.
However, the gain of 27 pts in the DIA when the average DIA trade price is 101 implies a gain of 26% for those two months. The largest drawdown was 2%. The profits were 18 pts on BUYS and 9 pts on SELLS, which is even more interesting given that the DIA dropped over 25% over the time period of this analysis - from DIA level 114 to a low of 85.
This is perhaps the largest reward to drawdown that I have ever seen with the exception to the Equity Market Neutral Fund that I managed in 2003-2004 which had a 1% max drawdown on a 13% return over the time window of that fund.
The INTRA-DAY ONLY time frame of this strategy is also extremely interesting in that it removes the higher risk, although higher potential of the overnight movements of markets. Lately the measurement of first 30 minute movement in the market is EXTREMELY HIGH.
On average, this method is signalling approximately 2-3 times per day and I am doing the analysis starting at 10AM and then in 30 or 60 minute increments. It is challenging to build the blog on every hour to update any changes and there are certainly enough distractions, but the overall performance is still extremely strong given this reality = that all signals were not taken.
I chose to stop publishing last week due to my interest in building the plan to charge for this lucrative advice.
Tuesday, November 4th 2008 11:00AM
The
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