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Thanks so much for the updates.
Beautiful example of this method in action.
Now looking for SD20EMA to move above it’s own 5 day MA and then above zero for bullish momentum to continue.
Look at the previous two SD20EMA bullish cross overs in Feb of this year and end of June last year and then look what happened to price. The same type of moves repeat themselves within the supply and demand numbers.
Holding position until SD20EMA moves back below it’s 5 Day MA after being above it and being above zero.
That was one big turn around within the markets.
Markets ended the day up but with SUPPLY at 1141 within that up-day there was also a lot of selling and fear.
If the markets had closed down for the day SUPPLY would of been way above 1300 again but for some reason the BIG boy / Manipulators didn’t want to see that much panic in the markets. That’s good for us.
With SD20EMA moving lower after the BUY signal on Monday we could see a 20 point move lower within the next 2 days before the markets take off again. Will have to see what happens.
I was biting a few nails on Tuesday because a lot of work has gone in to these trading methods and I didn’t want to see the signals start to break down. It looks like the signals are fine and I can start to relax a little again.
It’s fine to get emotional about things but don’t ever let emotions control your trades. When in a trade you have to always stick to the plan.
Lets see what Wednesday brings us
Looks like this could be a bit of a down day.
Buy signals usually come one day before the low, on day of low, or one day after a low.
If today is the low we should see markets rally from tomorrow but nothing is for sure in this game and that’s why we never trade more than 10% in any one signal.
We’ve had two signals within the last week so we are 20% invested.
This bull market at some point will turn into a bear market.
We will have a good idea if we are heading into a bear market within the next 5 trading days.
If we do enter a bear market we will trade using SPY PUTS from DEMAND spikes above 1300.
If SPY doesn’t show to be up within the next 5 trading days I believe that the markets are setting themselves up for a lot more downside. And by downside I mean “BEAR MARKET AHEAD”
So… if SPY is showing a profit between now and next Tuesday all will be well within the markets and you can expect to see new all time highs again.
Keep an eye on 5, 7 and 10 day tabs in this spreadsheet snapshot of my supply and demand numbers. Right now SPY is down -2.16 points from the BUY signal last Tuesday.
We have another SUPPLY Spike above 1300 so “GET READY” because when SUPPLY moves back below 1300 we will BUY again.
Buying again at a lower price will bring our total average price down for the SPY Options which of course is brilliant.
SD20EMA is now at a good level to be buying… It’ll probably fall a little bit further on Monday which will of course be brilliant.
Everything is lining up for a good 2nd trade.
FEAR has entered the markets and we of course “BUY THAT FEAR”
Have a great Weekend
Big down day in the markets today but SUPPLY wasn’t really that high for such a down day. That tells me that there wasn’t a lot of selling going on behind the scenes.
But….. If we see another down day tomorrow we will probably see another SUPPLY Spike above 1300. Which is of course great news.
I said yesterday that with the “SD20EMA moving higher on the day of the buy signal we have a 33% chance that the market will move lower by around 40 points within an average of the next 7 days”. I didn’t expect to see it happen in one day.
This is the main reason why I trade SPY Options. If the markets moves lower after my purchase I can hold through it. I’m not holding on to my options in the HOPE that they come back, I’m holding them because that’s the risk I’m willing to take.
If I’d made a purchase using my old trading vehicle the eminis I would of been stopped out right now because the 20 point stop would of been hit.
Holding the SPY Options is no different than the eminis in regards to risk @ 10% but with the options I’m still at-least holding a position.
The SPY options will have to go to zero at expiration before I lose my position and my full 10% risk. And that isn’t going to happen.
Nothing new within the plan has shown itself yet so all we can do is stick to it.
So to recap :
All is good. Trade Well
Nice up-day today in the markets which is always good after you get a buy signal.
With the SD20EMA moving higher today we have a 33% chance that the market will move lower by around 40 points within an average of the next 7 days. Just something to be aware of.
Now looking for SD20EMA to move above zero and it’s own 5 DAY MA because that will be the start of a new demand cycle.
We will hold our position until SD20EMA moves back below its own 5DAY MA when above zero.
It’s interesting to note that the $BPCOMPQ (Bullish Percent NASDAQ Composite) is now at same level as $BPSPX and $BPNYA was when we had our last SUPPLY Spikes above 1300 in early February.
Today the $BPSPX and $BPNYA are lagging a bit this time around.
Bullish Percent = Amount of stocks (%) that are on a buy signal using traditional point and figure charts.
In this case we have
If the SUPPLY Spike above 1300 and the BUY signal today is to be a good one we are looking for all Bullish Percents to move higher from here.
At the moment I have 11 people and I’m willing to bump that up to around 20.
The live updates will allow you to get in to the trade before the market closes on the day of the buy signal like today.
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We have a “BUY” signal with SUPPLY moving back below 1300
SELL when SD20EMA moves below it’s own 5DAY MA when above zero
Could see some downside but will have to wait and see what happens tomorrow.
I’m also looking to see if SPY is up from today’s close within the next 5 to 10 days because that’s an important benchmark. Failing that the markets could be heading south. By south I mean “BEAR MARKET” ahead.