Commentary

SPY, Green and Hanging Around

Daily

Pretty chart, riding the rising 18 day moving average. Notice how the 18 day line bends when the blue candles move below in early and late March, and then rises again on the breakout. If the market is about to crash, the right thing to do is to get out no later than the first blue candle, however in a continuing uptrend they will be excellent buy points.

The best advice seems to be sell long swing positions if a blue candle forms and closes lower than the open. If you decide to hold when a white candle forms, then it is probably best to ride out the cycle.

The long white down candle on March 22 is interesting. The algorithm takes a small loss there on long a position it entered at 279.49 on March 12, it stays flat for the next week until entering long at the close of 282.48 on March 29. A human probably plays that sequence with a profit, either by exiting before the white candle or by simply holding through the brief downturn.

Notice how the algorithm missed out on the Tuesday rally. I think the white up candle on March 22 was a good buy signal, unfortunately I wasn’t that perceptive on March 22. A point count system could be developed for analysis like there is in bridge and chess. A candle that closes above its open is worth something.

I was annoyed at missing that little pop on Tuesday but there has been no progress since then. DIA and XLI turned white today, DIA had stayed green for 8 days. It seems that things are still modestly bullish.

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