12/05/2011 Trading Signals


Cobra's Market View Private Messaging System shows:


THE SHORT-TERM MODEL BELIEVES THE TREND IS UP HOLDING NO POSITION OVERNIGHT

The bottom line, as I said, we tested the Friday’s high and rolled over, so everything went as planned (insert evil laugh here, hai hai hai hai, how did that Sith Lord laugh? Well, just like that). However, again, in my daily report, I have to guess the top or bottom, but in the reality trading, to trade against the current trend which obviously is up, is always a dangerous thing, so unless you know what you’re doing otherwise my suggestion to you is to let the market go first, don’t ever try to be smarter than it.

Still lots of people are asking what happened the next day when both VIX and SPX are up on the same day, well, not much bearish edge on SPY and just a little bit edge on SPX, see chart below.

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Those who follow the Cobra Impulse System, a long position was initiated today.

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  • Anonymous

    thx,ding

  • Anonymous

    ding star wars fan

  • Anonymous

    Looks like the impulse system is buying kind of late in the rally. But maybe in the long run it could win. Short run it looks poised to lose unless profits are taking literally the next day.

    • Anonymous

      Mechanical systems have the huge advantage of being unemotional and consistent.  Good ones may not get in at market tops or bottoms, but, they do, over time, generate profits.  There are, of course, excellent discretionary traders out there, many of them on this board, but the average discretionary trader is by swayed by his emotions and, over time, tends to lose money.

    • If you look at the chart carefully, so far this robot made only one bad trade this year, all the others were winners. Given it’s 81% winning rate, I won’t be surprised it’s going to have another loser before the year end.

    • uempel

      I’ve been over this again and again with a guy who finished best in class at MIT (and now works at UBS). He’s much better in math than I and that’s why I’m referring to him: Fact is that all mechnanical systems only work for a limited length of time – a few hours, days, months, years: suddenly some disregarded cycle will break the steady rhythm/pattern of any system. Like some rogue asteroid breaking into a planetary system and changing the equilibrium of it all.

      This problem is inherent in all mechanical systems and cannot be undone.   

      • Anonymous

        That’s very interesting.  However, I wonder if it depends on what kinds of systems your friend was studying.  Most systems that fail are based on indicators (moving averages, stochastic readings, etc.).  But mechanical systems can be based on other criteria.  
        Cobras Impulse system has been backtested over many market cycles (over ten years, if I remember).  Surely, in ten years, most kinds of patterns have emerged.  There are, of course, “asteroids,” but, by definition, they would be short lived aberrations that would, in addition to nullifying mechanical systems, also wreak havoc with technical analysis in general.  

        I’m well aware that systems that have been optimized for a short period of time will invariably fail.  But if a system has been backtested for over a decade, through an array of market cycles, shouldn’t it be more robust than that?

  • uempel

    BPNYA up 3.13%, BPCOMPQ up 2.61%, BPOEX up 3.17% BPNDX up 1.67%, BPSPX up 2.72%, BPINDU is flat. BPSPX chart shows that there might be a bit more upside.

    • Anonymous

      Very nice call with your charting over the weekend.  I believe today’s high hit the point of confluence that you charted.  Great work.

      • uempel

        Thanks dhdware, but I think there might be a bit more upside. I’m expecting BPSPX to rise a bit further and SPX to show a false break above SPX resistance at 1264. An SPX top at the DMA 200 would be too obvious…

  • Anonymous

    Sith Lord laughs like this: ho ho HO HO HO HO HOOO!

    • Sounds like Santa. 🙂

      • Anonymous

        HAHAHAHA! That was just a joke.
        Impulse initiated a long position huh. Interesting.

        • Remember the trade you’re afraid the most usually is the best trade. I see no one believes this trade (including me), so it might be a winner? Who knows. 🙂

          • Anonymous

            If SPY testing $125.5 and holding there then it could be a good continuation up move.

          • Anonymous

            Wow! Impulse is working today.

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