Commentary

Signal for 6/9 Now xCF, Needs More OOMPH for xFF

I look at the last 2 lines of the data below to figure out the next signal:

The 13 day averages are summarized as the third hex character in the xEM column. Today all 4 hex characters were C at the moment this was produced. That makes the current signal for tomorrow xCF because the third character of xEM from the current row (6/8) is C and the third character of the row above that (6/5) is F. I have a habit of reading spreadsheets up to down so tend to flip those around if I’m not concentrating.

I might buy on xCF if there is a reasonable pullback, but probably not if it just hangs around here. Even if xFF appears, I’d be thinking about staying out. Feels a little creepy up here.

SPY with 13 Day Averages

The red line is the simple moving average and the blue is the exponential. There has to be a move down to 306 to take out the higher simple moving average to get a different signal than xCF or xFF. When that move happens, the move will probably be sharp (over 1% on SPY), you don’t want to be long.

For a swing trader, a relatively quiet pullback to say 308 is a good entry point. My guess is that (or worse) happens this week or next. That’s just a guess, but some prudence is called for if you are aggressively playing momentum.

I had some UDOW over the weekend that I sold in the preopen because I bought it by mistake and these levels are creepy like I said.

The timeline graphic in my Theory to Practice article was important because it showed short term action:

Note xFC is playing the rally well, look at the May and June numbers. The environment sort of overrides the signals at this point as long as they don’t get worse than xCC.

There is no simple (or complicated) way of deciding how to weight short term versus long term numbers. I was encouraged by the positive xFC performance recently, so making the mistake of buying on Friday wasn’t all that terrible. Good to know that stuff before you do it though instead of after.

I appreciate the new interest in the site (glad I renewed it) and hope everyone is doing well.

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