Commentary

6/25/20 xX0 Signals

SPY Daily

The support at the 52 week moving average (297) appears brittle. The 295 low on this move will most likely be broken.

A simple method of forecasting involves assuming that the next low will be equal in size to the move from 322 to 295. The current move down started from about 315. 315 – 27 = 288. My guess (FWIW) is that will happen in the relatively near future.

The are four possibilities for the xEM signals today.

x00 is playable, x30 is quite negative. I may take a position overnight if x00 happens.

The 13em list is an aggregation of DIA, IWM, QQQ, SMH, SPY and XLF.

I’ve been looking at risk for the 3x Bulls and even the 1x ETFs. Even with the spectacular returns, the drawdowns playing these strategies seem to be a lot of stress for a human to put with. It gets psychologically difficult to put up with losses, especially when positive returns are going to flat states.

It is important for a trader or investor to be able to visualize how they will react when things start going one way or the other. This is the realm of abstraction, imagination and fantasy. It is important to be able to feel unpleasant emotions before they happen, to truly understand how one will react.

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