ETF Prophet

Internals are highly negative even though price has thus far found a floor near SPY $102 (10-DMA).  VWAPs are ruler flat and range is fairly narrow (same same with FXI).  On the other hand, so far all these intraday pullbacks have been bought into the close.  Clearly traders have to be wary of a break [...]

Continuing with my review of Qs non-correlated forecasting systems, here’s a look at the Qs KOP, or Qs Kit of Parts. The KOP is actually a composite of several systems and a review of the original post will help newcomers understand the code and the underlying logic. The KOP was the product of about 4 [...]

[Full Screen] [Part II of II] As an aside, did I mention that up to 780 pairs can be optimized at a time?! Warning, it may take a while depending on your hardware and software configuration.  Please also note Part II of II below the main video! Related Links: Introduction to Pairs Trading Cointegration Concepts [...]

(Click Image to Enlarge/ Glossary) US Equities spent the week going sideways with the S&P 500 (SPY) finishing higher by +0.4%. The largest gainer for the week was Agriculture (DBA +3.2%), while Liquid Fuels suffered a small decline (DBE -1.2%).  Speaking of which, DBA, DBP, XLK and IYR continue to look somewhat overbought in spite of [...]

Dear Subscriber,  We had a traditional Gap fill today that left only the NASDAQ up ever so slightly today.  Sector-wise, results were more mixed still.  For Monday, we again have a slight negative bias in short-term trend, although the end-of-month mark-up seasonality prospectively remains in place.  I am keeping commentary brief today to reserve time [...]

Professional traders are always asking their trade candidates “What have you done for me lately?” The same can be said of their prospective stock and ETF pairings (more background reading here). When it comes to trading pairs, inter-market relationships are often ephemeral according to current economic themes and collective trader focus. Therefore, it is important [...]

Apparently too many successive days higher and other short-term overbought oscillator indications became too tempting not to sell into on the morning gap higher. All internals look fairly negative and cumulative down volume is now joining in the party. I’m not looking for anything too severe, but at the mid-day I would have to conjecture [...]

The market is up strongly on this morning's economic reports.  Also recall that we are within the month-end mark-up period. Dear Subscriber,  I have the post going out a little late tonight having taken the kids to Harry Potter.  The obvious transition being that the markets performed a bit of magic of their own today, [...]

Here’s a version of the Happy Trails system applied to IWM for the original backtest period of 5-1-03 to 9-12-08. I call this the “Lite” version as I’ve removed the stop loss and breakeven stop floor conditions that created so many false starts . . . but which also created an exceptionally low intraday drawdown [...]

I would like to synthesize some of the previous work to present a valuable indicator —the CVI—that helps project whether trend following systems or mean reversion systems will perform better on the S&P500. The CVI stands for “Composite Volatility Indicator.”In this post we will look at how CVI helps to moderate daily follow-through. As a primer [...]

OK, I’m just kidding — but that opening dip did get bought fairly quickly and we have recouped half of the a.m. losses. From an internals perspective, the V-recovery was confirmed with precision. Note the confirmed turn in the AD, VIX and Cumulative Tick lines at 8:30 a.m. on my charts. While it looks bullish [...]

This is a follow-up to Monday’s post on the Qs Happy Trails system and the use of the TradeStation “breakeven stop floor” (BSF). Monday’s system parameters set the BSF at $4, which admittedly seems unrealistically tight at first glance. The spreadsheet above identifies all the metrics of using a $ 4-20 BSF range and demonstrates [...]

Dear Subscriber, Today was truly mixed in nearly all aspects from both a leadership and internals standpoint.  In the chatroom, we coincidentally made a nice range-day call, which helped significantly in day-trade confidence even though range was small.  For tomorrow, the stats are again leaning just slightly bearish.  Also, the rise in the VIX together with [...]

Third day in a row. Cumulative Tick, Down Volume and the AD line all suggest a lower close as price pauses beneath the VWAP. On the other hand, certainly no one is running for the exits like the days of yore. Just need to watch how those internals evolve over the course of the day. [...]

Behold the power of the hairy bottom! This is GE on 1 minute bars and a picture perfect hairy bottom setup dead on the PP pivot at 10 minutes into the market.The hairy bottom resolved above the PP at 9:43, accompanied by a parabolic BUY signal.The trade got some additional confirmation from a VXN cross [...]

Dear Subscriber, In-spite of some positive economic and other news catalysts throughout the day, equities struggled towards the close for the second day in a row.  Our signals lean ever so sightly towards the bearish side tomorrow.  News-flow-wise, markets face Durable Orders, New Home Sales and Oil Inventory reports tomorrow.  On one hand we have the [...]