Adventures in the garden of good and evil

Today is yet again another Connors-Hayward ESU8 sell day [from 'Investment Secrets of a Hedge Fund Manager']. 3 of the last 4 days have been sells but as they say in their excellent book, the method as described by them isn't perfect but can be improved to about 80% accuracy. Basically it is $NDX leads $SPX, up and down and thus buy/sell the ESU8 future as indicated. There is a 'null' play which must be taken into account.

IMO, these are a couple of smart guys who published a useful book.

lj
 
The abysmal performance (60% by my estimate for the last 6 days) of the C-H indicator discussed above can be improved by changing the action sequence from $ close to $ open or $ intraday turn. Things get messier though, especially with the latter manoeuver. Too bad that something so simple rapidly becomes more complicated just because it's being used by people other than C-H. So to keep the edge the indicator must be retooled but evntually an Occam's razor develops and then what does one do?
G. D. Taylor had an observation for dealing with stuff like this and that was he made about 40% of his money when things didn't go as 'expected'.
So he left the indicator intact but decided on a reversal point. Much better I think than 'holding and hoping'.

lj
 
Hmmm. Discordant V's on the 15, 30 and 60 min ES. DF/DM. EW 'popgun' sequence. SOM (start of month) rally is a bust. YM fails to penetrate 6-26 gap. ES falls away from prior high and 6-26 gap. The boys are back. Employment numbers on Friday. So when will the move down happen and will it be a big one or do we have to do the October thing (but it's an election year)?

lj
 
The 15 min, 30 min, and if PRV holds true, the 60 min ES discordant V sigals have been neutralized BUT both the 30 min and 60 min are generating a new set. As always, this suggests further movement down OR a huge, volume validated up move and again, as always, I can't predict which will occur. One can get other info which probabilistically indicate a direction but it is best to let the market lead you in the direction of resolution.

lj
 
As of moments ago, flat - no signals. For anyone who might be finding this stuff useful, all descriptions apply ONLY to price and volume for the YM and ES between 9:30 AM and 4:00 PM. This is commonly referred to as RTH (regular trading hours), the time period when the index cash and index futures markets are in simultaneous play.

lj
 
Apologies.

A correction to the post above. I should have said equities RTH not just RTH because futures RTH run from 9:30 AM till 4:15 PM ET, the point being that between 4:00 and 4:15 futures are unfettered by cash and in fact will remain so until 9:30 the following AM. This may or may not be of consequence to you depending on how you think about things. Many traders in fact do include the 4:00 to 4:15 P/V data in their deliberations. I am on hold with respect to this decision because I don't know what the smart money is doing from 4:00 till 4:15 and how it relates to what is going to happen, acts of God aside, the following AM at 9:30.

It seems to me that if you don't have a point 3 but thought you did, then when you find out that you didn't, you just keep doing what you were doing before you thought you had a point 3 (HOLD). If after you've made a point 3 you see a signal for change but then it doesn't change then you keep doing one of the things that you were doing before you saw the signal for change (HOLD) and stop doing the other (looking for a change signal) because now you're looking not for a change signal but rather a point 2 (or possibly a point 3 if things were faster than your ability to know).

lj
 
It's the old down Friday/down Monday thingy and thus a high probability dump within 1-3 days. Long and strong - yes! and better yet, an overnight hold or two. Non-binaries suck but whatcha gonna du. With half a trillion crisp, Fed dollars pumped into this shitbag, prior to the big deal, a further cut could breach the event horizon.

lj
 
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