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muck

Muck's Model

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Right now, the market is about break even for the week ... the last 15 minutes of trading will determine whether or not the signal made money this week or not.

 

In either event, the signal for next week is another "-1".

 

Good luck to you ---- here's to hoping that September is better than August. :puke:

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Right now, the market is about break even for the week ... the last 15 minutes of trading will determine whether or not the signal made money this week or not.

 

In either event, the signal for next week is another "-1".

 

Good luck to you ---- here's to hoping that September is better than August. :puke:

 

I heard that September is usually one of, or the, worst month of the year. Also heard the September the year before an election generally sucks too.

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For the record, four of the last five times the signal generated a rolling return over 1-3 month periods that was worse than -10% (and there were only five such periods over the last 25+ years), the market had a sizeable sell-off starting six months or less later. The last three months, the signal is down -19.9%.

 

Why?

 

The fundamental and technical factors that "usually work" don't ... and they don't because there are other issues going on that need resolution, and are generally only resolved via a sell-off. Sometimes the sell-off is short-lived, and sometimes not.

 

-12.6% for the three month period ending 9/30/1985 ... market never really had any sort of big pull back shortly after that

-10.0% for the one month period of 4/30/1987 ... the market sold off more than -30% from Sept 1, 1987 through Nov 30, 1987

-21.9% for the two month period ending 2/28/1990 ... the market sold off more than -15% from June 1, 1990 through Oct 30, 1990

-21.2% for the three month period ending 9/30/1999 ... the market sold off more than -45% from Apr 1, 2000 through Sept 30, 2002

-12.4% for the three month period ending 6/30/2008 ... the market sold off more than -50% from Oct 1, 2008 through Feb 28, 2009

-19.9% for the three month period ending 8/31/2011 ... the market ... ???

 

...caveat emptor...

Edited by muck

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At the close tomorrow, if the market is up on the week, we'll probably be staying short for next week.

 

At the close tomorrow, if the market is down on the week, we'll probably be going to cash for next week.

Edited by muck

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...revision...

 

Given today's action, under most every scenario for the remainder of the day, the short position will be maintained for next week. There is maybe a 1% chance that we'll cover the short position and be flat for next week. There is no scenario where we're buying for next week.

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We will probably be out of the market (i.e., in cash) for next week.

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Probably going to be "+1" for next week.

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Sorry ... it's a "+1" for this week.

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Heading to cash for next week.

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Probably cash again for the coming week.

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Probably cash again for the coming week.

Smart. Although I'm still long-term bearish I think the market will work higher in the coming weeks/months. However, I'd be shocked if we had another 5 days of straight buying like we've had the past week+. The S&P is bound to test that 1160-1190 range next week I presume.

Edited by Brentastic

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All we do is try to trade when the odds are in our favor one way or the other.

 

Some times we'll be wrong and sometimes we'll be out when it moves a large amount one way or another.

 

Other than a rough August, it's worked pretty good. That said, I'm toying with the idea of moving to a daily model that will be in the market for generally a few days to a few weeks; the big problem with August appears to have been that had the signal been viewed at a different periodicity than weekly the results would have been better. It'll probably be at least a few months before I can get those kinks worked out. So, in the interim, we'll stick with the weekly signals.

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Probably going to go long tomorrow at the close. Maybe long-on-leverage.

 

We'll see...

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Muck, does this model take political events into account such as the debt deal in Europe?

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Not explicitly.

 

................................

 

Probably, we're going to cash tomorrow afternoon...

 

BTW, we were long (but not long on leverage) this week.

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I shorted ES end of day today. Got in at 1281.25. I realize there's some upside left in this parabolic rally but I'd be shocked if we got any higher than 1307 before a decent pullback. The way this market has been acting (btw, I outlined this exact action of extreme declines followed by extreme rallies months ago) I would not be surprised to see a fairly quick 100 point retracement in the ES. It may be delayed for another week or so, however. Regardless of the short-term action, long-term I see a maximum upside of the S&P at no more than 1360 and I lay very low odds it will even get there. Whenever this bear rally ends - whether it be in a few weeks or a few months - the next leg down is going to be a furious site to see - I gurantee that. One for the record books. I would not want to be stuck long when the rug gets pulled out next time.

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I shorted ES end of day today. Got in at 1281.25. I realize there's some upside left in this parabolic rally but I'd be shocked if we got any higher than 1307 before a decent pullback. The way this market has been acting (btw, I outlined this exact action of extreme declines followed by extreme rallies months ago) I would not be surprised to see a fairly quick 100 point retracement in the ES. It may be delayed for another week or so, however. Regardless of the short-term action, long-term I see a maximum upside of the S&P at no more than 1360 and I lay very low odds it will even get there. Whenever this bear rally ends - whether it be in a few weeks or a few months - the next leg down is going to be a furious site to see - I gurantee that. One for the record books. I would not want to be stuck long when the rug gets pulled out next time.

ES retraced 81 points so far since it's high from last Thursday (3 trading days) using today's intraday low of 1208.50. I'm still short from 1281.25.

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Thanks for bumping this.

 

We did, in fact, sell our positions last Friday at the close and are currently in cash.

 

FYI --- better chance than not that we'll be going long on Friday, maybe long on leverage ...

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We're going long today; if the S&P500 closes above 1250, we'll be long on leverage (+3) ... if below, we'll be just plain 'ol long (+1).

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We're going long today; if the S&P500 closes above 1250, we'll be long on leverage (+3) ... if below, we'll be just plain 'ol long (+1).

There's limited upside to this market, imo, and I can't foresee any situation that would carry the S&P much higher than 1350 anytime in the next few years. The downside potential, however, is enormous. The downside risk is too great to take a chance on going long, imo. Best of luck in your trade.

 

All that being said I can see a scenario in which we climb in the coming weeks and it would not shock me at all if we got to the mid 1300s by the EOY. But like I said above, there's a limited ceiling of 100 points of upside max in the S&P but downside risk is virtually unlimited. And regardless of the short-term movement, the longer-term trend is DOWN. I'm still holding my short and will be ready to get out if we start heading north of 1260. The problem with going long, even with a stop, is that if the market tanks hard enough, your stop might not get activated since it's not really in a que until that prices gets traded. As we saw with the flash crash last year, anything is possible and having a stop is no guarantee that you'll get out of a long position safely.

 

Best of luck to you and everyone. The next 12-18 months will probably be the most volatile to date.

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... but downside risk is virtually unlimited.

 

No it's not. The downside is limited to about 1250 points. Its the upside that is unlimited.

 

:oldrazz:

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No it's not. The downside is limited to about 1250 points. Its the upside that is unlimited.

 

:oldrazz:

Ha ha - fair enough!

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