Thursday, December 16, 2010

Where are we now?

These days are very busy to me, therefore no charts today, sorry.
However I felt to write a quick post to my readers just to clarify where are we now.
As I told you we had an end of 60 mins bull cycle on tuesday. Next day was red.
If you followed the 60-mins RUA chart you could see bear exhaustion.

What happened? Very simple. Best buyer is a short seller at cover. We could clearly see a heavy manipulation on USD again, Ben started its printing presses as a solution for everything.

Market responded accordingly: assets turned back to positive and gold started to stabilize.
As I follow and trade futures mainly, I can report dollar started a decline and gold started to stabilize, later rise, of course after-market, so masses will be left out from this business again. (This forecast valid max 6-8 hours, then needs review again, now it's 01:44 ET)

So a new manipulation again. I am not buying it now here in this blog (my trades are totally different, in different time frame, also I ride the bear side).
It worked for half year, we made huge profit, and it's all.
In my opinion smarts will not jump in to the market at VIX 17. Savvy traders start to build up cheap short positions and wait. Look, FED does not let market down. However, bear side is more efficient now than bull, it was tested on Wednesday. It just a matter of time when algos turn their directions. If FED stays alone, and smarts dont buy a potential of a bull rally, simply FED needs to let market down, and let smarts to buy cheap.
It's all. Till FED does not realize it's more effective to go together with smart money, the only solution is for smarts to wait. Let giants play the game now.

Vali, Staffan, please find my SPX 500 setup :

histo: 6,22
Osc: 6,1
SBV : 6,33
MVO: 6,18,2
Momentum AD osc: 10,20
AD sentiment: 7

I still say, the most reliable is RUA. While selling volume on SBV is flat zero, on 1-day it's pretty safe. You will not catch the top, so some loss on you bull stakes imaginable, but you will easily identify a possible serious downturn.

Vali, the ansewer for your question:
Steffan posed similar question recently, my was:

'How to find parameters is the key in MV I feel. After the parameters found using them is an another story.
Parameters depend on the time frame, underlying instrument, volume, volatility and general market conditions.
Yes, you can use a totally manual approach, when you try that and try, and backtest, and your volume charts start to predict the price change.
Personally I use a different method: AI. That makes me the majority of the job, then I fine tune the initial suggestion of my system.
As you can see, most of my parameters divert from the MV recommendations. However they work. 1 day needs to be reviewed on monthly basis, 2 day every third months, 60-day every second weeks. Thes are not big changes, sometimes a proper fakeout analysis is totally enough instead of changing parameters.

So I encourage you to work out your own ways. The setup I gave for RUA is good below VIX 26-28.'

Good luck!

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