Thanks love-to bike, Christopher, Steadygain and everyone else I may have missed for your kind comments. Merry Christmas to all! I like technical challenges, and am getting better at technical analysis (TA). Next year I should have some good calls, as we go along.
But what is happening now? Remember sometime back I said I was working on 2 trading systems, that are distinguished from each other by levels of risk? For simplicity, lets just called them the "Quick Bite System" or "Jaws", and the "Seven Course Meal System". The signals on my signature line are the Seven Course Meal System. Both systems have nearly the same buy in points (normally), but the Quick Bite as you may have guessed, exits sooner, while the Seven Course Meal System waits for dessert.
My personal style has become more risk adverse, so I am following the Quick Bite for my trading. If you watch my moves going forward on the TSP Tracker, they represent the Quick Bite System. Reminds me of a restuarant sign that said "Squat and Gobble"; that is similar to the way it works - get in - gobble, but leave food on the table- and then get out quickly. The TA tonight (12/22) suggests that the Quick Bite is about ready to sell in the next day or two (to G). I will know before the IFT deadline tomorrow if a trigger occurs, as it will be important to see how the first 90 minutes of trading affects the signal. If you have been noticing, the first 1.5 -2 hours of trading have been setting the course, for the last several trading sessions (gap up retrace a litle, and then drift sideways or slowly higher on real light volume).
Now what is up whith the markets anyway? We had really high volume last Thursday (SPX) and Friday (Nasdaq) and the market traded down to sideways. This week we have really low volume, and the markets float higher! (Sure, you can point out OPEX, exchange rebalancing, selling C and then buying C etc. for some of the high volume last week) Low volume is ripe for market manipulation, so true colors will not show until next week or January 2010 when the boyz return. Quick Bite system sees the opportunity to gobble and then go to sell mode before the boyz return. Such an idea. Why not put the risk/reward in your favor? Is your risk tolerance persona made of steel or is it like a canvas tent that rattles with every little breeze? The two systems give you choices.
We see that the bollinger bands (BB) are tight on the indices. This means that the standard deviation between the lows and highs is narrowing. Yeah, the market has been trading in a box, with a 35 point spread on the SPX for 7 weeks! This also means that the probability is increasing that a BIG directional move is coming, up or down. The narrow width BB will act like a venturi. This term applies to fluids; as a large volume of water narrows in a flume or pipe, the velocity increases. In much the same way, the tight BB will initiate a quick and euphoric or boo hoo move. Be ready!
Merry Christmas to You and Yours!!
