Hedgpoint and the current SSO short trade

I am currently long a hedge, the system issued a secondary buy signal today on the open short position, capturing an extra 1.2 points or an additional $28,000 on the close of the primary short for the trade we did. That's over 50% increase in the profit on that trade. We are now long for free and will hold the hedge till the next short or expiration.

SSO Hedgepoint and EOD trigger (less than 2 seconds before close)

all the new modules working perfectly

SSO Daily Swing Covers

SSO Daily Swing Goes Short

System Position Update

Below are the results of the swing system trades. Currently, this exit represents a hedge-point for the newest release of RVS and portfolios are hedged to limit the risk for the current trade. The trend following enhancements to the RVS model are now holding the short position till its deemed to be expired. Then the position will be closed. This means that the trade could extend for quite some time. I would like to add that though I have been using this blog to communicate with clients I will not be publishing all the trades or the latest model triggers via a public blog. It has been a very good mechanism to confirm, communicate and reference live and funded trades. We allocated around $50,000,000 on the ES trade, while the TF trade which took 35 points on this run, had around $20,000,000 allocated. I do think we were effective during very challenging markets.

This weekend I am releasing the updates to RVS and additionally, I am releasing some amazingly powerful forex systems with outstanding risk and targeting controls. We will be allocating a large amount of our assets to the forex markets, which I am excited about, but has also been very demanding from a development perspective. 

Regarding my take on the markets, I see a possibility for a bounce and the new RVS method sees this as a hedge-point, however, I reiterate my comments regarding the dollar and the markets as a whole, therefore, I expect to be much much lower over the near-term. And as I pointed out on Wednesday, the market cycle is a very large hurdle to overcome. If prices were to over come that cycle in the 1100 area in the ES I would view that as a significant achievement. 

In so far as I can be helpful, I will try to keep updates on my blog regarding the major inflection points in the markets - as I have done recently. However, there is reason for me to potentially a private (though not charged) blog where I can ensure a constructive and positive interaction on a proprietary basis. 

Today, i found the following chart on THEMAXFACTOR blog: 

Max has used my charts in the past and apparently possesses, at the young age of 15 in Switzerland (where apparently you don't have to go to school and you can spend all day trading the markets), the capability to produce high quality trades. Max made some very good comments regarding draw downs and risks and I appreciate that he has consistently reference my charts on his blog. This goes back to my previous posts regarding allocation amounts. However, what Max may have achieved in confidence/arrogance has not been matched by analytical ability. 

I would like to point out that one of the nice characteristics of these systems, especially the dailys is that they take the smallest positions early and the largest late. In the ES system we built a 20 contract position in the model (which trades live) with an initial 2 contract entry. This ensures in fact the the drawdown risk is significantly reduced and enabled an average price in the 1070's, which will look like a great fill when looked at several months from now. Therefore, the point regarding being deep in the red is curious and misguided. The market situation has been in a highly dangerous posture and may or may not have made it to ideal levels to short, this is why an initial position is initiated and the positions are built in the manner that they are. Additionally, there is a self assessed performance analysis and risk analysis basis for these systems to self-manage their trading risks, probabilities and allocation sizes based on their performance in the markets that they trade. This has been a considerable effort for me to build but is very exciting and has opened tremendous opportunities in markets that make the TF and ES look calm, Forex and commodities for instance. I do recommend that Max demonstrate more of what his most intriguing post and concept are as he seems to follow them very well as can be easily seen via the portfolio shown below. 

As most market participants know, trading and arrogance are not bedfellows though they are common occurrences and it seems even in Switzerland. For an example of "garbage in and garbage out", I highly recommend looking at Max's trades and his portfolio which has taken quite a few 50% draw downs lately and did not fare welll today...(included below) It is easy to know what to do when you don't have to do it. Its also easy to back date posts or post trades in posterity, As I have real money trading and real clients, I am keen to share the good and the bad and I have an interest in presenting thing in a way that builds a understanding and integrity, therefore, I make a deliberate effort to leave my posts unchanged and also post information as I it develops with no filter. I do hope that this effort is obvious. 

So, shorting the ES in the 1070's certainly was reasonable and trade risks within reasonable tolerances. The advantage of trading a daily system like this is that you are not likely to get into situations, like BP, where you catch the knife for 50% haircuts. This is also the reason, that I like to allocate 10 to 30% of the equity in an account to risk positions rather than more and also why I focus on index trading for equity style investments.

I have been overwhelmed with the recent development efforts and enhancements fto the RVS/HLA and Cycle models and risk management systems - which have been a mind numbing process of refactoring, rewriting and re-architecting and finally reimplementing the derived model functionality, trade controller and risk management infrastructure - a few times. Usually just about when I thought I was nearly totally done. This combined with fairly substantial capital allocation/management decisions has left me practically no time and mostly no energy to follow through on personal and exploratory opportunities (Vimal among a few others please accept my apologies)

SSO Swing System Triggers Short Addition

SSO Swing System Triggers Short

As expected...

RVS ES Daily Income begins a short position and SP500 system overview

Whether or not the markets require more work to resolve the dynamic of the last weeks...any upside follow through on monday will likely lead to some pullback. If that pullback were to become something more extreme it would not surprise me. However, as I indicated, and counter to many bearish views, until the swing systems take shorts, I am not looking for a major inflection point on the upside just yet. I have stated before that it would be uncharacteristic for the SP500 swing systems not to catch a big short if one were setting up. I stand by that view.

Below are the charts of what is happening with some primary systems I trust for market moving triggers. I've also included the trade for trade equity curves. The ES swing system dates back to the inception of the futures contracts and is capitalized with around 20,000$ per trade. Please understand that to trade this system $20,000 represents an allocation amount and therefore represents a portion of an account.

RVS ES Daily Income

Dufus of dufuses...I have this model programmed to trade reversals but had the capability turned off. That has been updated on the trade servers and is in the latest release - so we WILL get reversal trades in live trading starting Monday. Below is the chart with reversal trades enabled. Obviously, we missed a trade. Also, below is a P&L for this Income system since inception of the ES e-mini futures (1999) with 10% of the profits reinvested. Starting risk capital is around $25,000.

RVS ES Daily Swing

Below is the same system with 10% of the profits reinvested. Starting weighted risk capital is around $25,000 for both PL's. All trades end of day market-on-close.

RVS SSO Daily Swing

SP500 still setup for a short

The S&P500 trading systems are currently looking short. If we get to levels much above here the systems will likely trigger short. I will make sure to post if any of the major index systems do setup and trigger. How it looks to me is that the jobs number on Friday will be a high probability for a short entry. Sell when people are happy and promoting trumped up numbers sounds like a reasonable trade to me.

Below is the chart that I posted last week for easy reference.

SP500 system setup for a short

Despite the exits from the longs yesterday...many of the long-term models are not yet short...however, they are setting up for that likelyhood and this presents a likely huge opportunity. I would like to state for the record that IF these systems trigger short...its most likely the end of this grand-puff-job perpetrated by the fed and their cronies. In case you need a little sunlight on that read below:

The U.S. Federal Reserve is also active in currency markets, German Economics Minister Rainer Bruederle said Friday.

His comments come on the heels of remarks made by his Swiss counterpart who said that the Swiss National Bank purchased euros to buttress the single currency.

"It is a regular procedure of central banks," to intervene in currency markets, Bruederle said. "It is not a secret," that central banks have a foreign exchange rate target, he added.

Bruederle said "eruptive" movements have to be avoided. He previously said that China holds 25 percent of its foreign exchange reserves in euros. 

If the fed feels that they need to participate in the currency markets...treasury markets, bond markets, derivative markets - why not stock markets - stock market futures no less? Where will they stop? In any case, the one thing that is clear is that the Fed will lose...the main question is when? Everything in my system work is saying its pretty soon - if not now. A rally is possible, not necessary.

While it is unlikely for these systems to miss a big short...the fact that the market fundementals are so poor and the units that are used to price these markets (ie currencies) so flawed...we can not under-estimate the risks of there being relatively little follow through to the upside. Which ever way the winds decide to blow, I will try to keep some general market triggers available through my blog. It is just too much work for me to publish every signal, but it is important for me that there is some reasonable information available regarding this potentailly dangerous setup in the markets.

Currently, the only systems still with a view that this may be a dip are the Small Cap systems. That could change in a jiffy however and I take the recent exits from long positions VERY seriously.

Strategies Update

Looking to sell long positions at the close...this is not confirmed but looks probably at this point.

Systems Update

TF and SSO Gone, Gone...Sold

Huge Trades

End of day sells look good...

I will post an update with confirmation nearer to the close...

Yesterday's Yellow Arrows for TF and SSO did not result in sales at the close

The systems are still currently long and will likely sell today. Please keep in mind that the long-term systems are still long biased while some shorter-term systems are looking short. This is a mixed picture. But as I indicated in my previous posts, I believe that the markets can be driven higher by the same computer programs that took them down.

UWM Daily Swing did sell yesterday at the close as expected.