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Friday, April 20, 2012

WRITERS BLOCK




I am having a hard time finding things to write about with the markets as dead as they are. It is a good thing we have the Blind Man's Bonds system to talk about. You can see in the above chart the system is short still from 141'25 and I added to the short position yesterday at 142'06 where the arrow indicates. This was a discretionary call of course, but it is my blog and I can do what I want to, LOL! It was just my judgement for better or worse, that it was getting more and more stretched and I thought we were going to come back down some. The trade is not closed out yet so it remains to be seen whether or not this move was the correct one.

In the old days of using this system, I used to do this type of thing often since I knew the system was spitting out 90% wins. I felt that if I could get in better once already in a trade, that the odds were good it would work out. It did not always play out favorably. Often the good trades just roll right from the beginning, and you never have a chance to get on them this way. If and or when this is ever released as a service, it will be up to subscribers how they manage the trades. It will be my suggestion that it be done by the rules strictly and not to do this, but this web site features full disclosure, so that is why I showed this.

The stock market is controlling everything from the world economy to the presidential election, to the dollar. You read that correctly. Stocks are controlling the dollar it is not the other way around as so many people are writing. Just watch the intra day charts and see which moves first and which follows. I can't for the life of me see why so many people get this wrong. As a result, it will be necessary for stocks to stay strong for this short to work. Keep in mind that if the DOW was at 7000 now instead of where it is, people would be jumping off the nearest cliff they could find, and this knowledge is not lost with the FED.

Even though I am looking for a bounce in stocks into month end, if the market were to close right where it is as I type this, I would have a short term sell signal in the ES for Monday below today's low. The day is young so anything can happen.

I am now working on a short term mechanical S&P system that I hope to have done soon. We will also watch that live in here for a bit once it is ready, and see how it does. I have plenty of things that work but it needs more trades than what I currently have constructed. I have no time table on this one.

I wish I had more but I can't find a trade right now, perhaps the ES on Monday. There is one outside shot at something in the Aussie for today. If it were to get above yesterdays high I think it is a possible long up there.

Good Trading

6 comments:

Michael Tredr said...

i've been shorting the ES for the last week or so - it's been painful. I'd really like to see it come in some but your point on the FED and the market in general articulated for me what I've been feeling for some time now. I do certainly hope that we end up at least towards the LOD when the session ends.

John M said...

Michael, I hope you did better on Friday. I was doing well on the ES short but didn't think that rally was going to go as high as it did. Friday righted the ship pretty nicely.

Chris, what time frame are you looking at in this bond short? I have been looking at bonds to hold up, maybe head a little higher into month end and ES to dip further into at least the end of this coming week. Is this totally at odds with what you're saying? Thanks.

Chris Johnston said...

John the mechanical system just exits first profitable opening so pretty short time frame. There is no logic, it is follow the rules like a drone if you are system trading.

COT wise I think Bonds are setup for a decline which would be much larger in magnitude and longer in duration.

John M said...

OK, Chris, thanks. I can see that longer, larger Bonds decline happening, should be a good one.

Michael Tredr said...

@John M : Thanks John, I did marginally better as my hopes for the ES ending lower got results. Today is a little reassuring but i can already see the traces of big paper anticipation back to the long side. even if it were to break the "critical" 52 handle - It'd have to step down to the 12's in order for me to even consider popping the champagne bottle. hope your day will be hugely profitable!

tamanna said...

Hey thanks for informing about ES.i'll be watching this to get a good possibility to trade either towards up or down.
BSE