Kudos to MMs

"'Emperors With No Clothes’ Driving S&P to 700 – Bear"

http://www.cnbc.com/id/45104927

I too am beginning to see these patterns, and I seem to be a year too early. It happened in 2007 ish when I was certain the market would implode, only for it to take a full year and half to play out.

The pattern is beginning to emerge. Markets begin to stink. Governments do everything imaginable to instill confidence in markets for as long as they can, especially to an unsuspecting public. Markets stink some more, governments push back, the child that is the market is appeased again with the lolipop. Eventually, the force is so great that nothing can stop the demise. But this back and forth takes time to play out.

The hard part is the waiting for the disaster, which appears to only happen at least a year after it becomes obvious that nothing can stop it. So you have to anticipate all the QEs, and ESFS, and all the other nonsense that is trying to cure the symptoms and not the disease, because markets are easily tricked.

So, it is glaringly obvious this is a disaster that cannot be avoided, and ultimately must resolve itself to the chagrin of governments. Therefore, we are probably a year away from the actual catastrophe. The best shorts only hope they get to sell from much higher, turning 201Ks into 101Ks.
 
support ... hell
resistance .... highs

: 0 )

=============================

pretty close already.
Quote from elovemer:
...still

Quote from elovemer:
sorry.... should have said 200 day.
 
"China October Official PMI Falls Unexpectedly"

http://www.cnbc.com/id/45112009

Hard to tell. Given that it is from China and therefore hard to believe the number, but if it is accurate, there is no question that there is worldwide contraction (China is the pulse of the world right now). This is not the first number to indicate so from the region.
 
I am going to change the way I trade the third unit. Instead of treating trading the third unit in the way I trade the other two, based strictly on S/R levels in the direction of FV, I am going to trade the third unit strictly by whether SPX is above or below OFV. So unit 1&2 are controlled by FV, and unit three by OFV.

That will mean more trades, but it would have been magic in this environment.
 
OFV went above SPX almost right out of the open. Out unit 3 at 1222.

This is a bit complicated because unit three was entered on slightly different logic and exited on new logic, but I have to use the same PnL logic to keep things straight.

Even though this is unit three against unit three, I have to mark-to-market the way my statements do. So even though systemically this is paring the exit at 1221 against the entry at 1220 or -2, in the real world it is matched against the entry at 1142.

So, in my mind, I see it as -2, but in the real world that is -80.
 
It is very likely that I will not be able to keep up with posting unit three trades, since it could easily go back and forth several times several times a day, and unless I automate the posting to ET these entries and exits, I have no desire to do this all day long.

I may post all third unit trades at the EOD. This third unit trades postings is strictly for me and my journal, since no one believes "posts representing trades" that are not in something resembling realtime.

There are many ways to trade the third unit. For example, I could only have a position in OFV if it coincides with FV. Or, I could use OFV to be it's own system, but only if FV has two units on, etc etc etc. Right now, I am doing exactly this, only if there are two units on, does the third unit logic kick in (hence its name :) ), but it can go long or short regardless of what FV says, only its own internal logic of OFV vs SPX. So if third unit kicks in, I am long or short either 3 or 1 unit, never 2. So unit 3 logic is entering and exiting two units at a time, either pealing off 2 units of an existing FV position, or going back to full position with FV. This logic will start as of tomorrow.

If this logic had started today, OFV would have gone long 2 units at 1222 as stated in the post above (leaving short 1 unit).
 
Quote from nitro:

It is very likely that I will not be able to keep up with posting unit three trades, since it could easily go back and forth several times several times a day, and unless I automate the posting to ET these entries and exits, I have no desire to do this all day long.

I may post all third unit trades at the EOD. This third unit trades postings is strictly for me and my journal, since no one believes "posts representing trades" that are not in something resembling realtime.

There are many ways to trade the third unit. For example, I could only have a position in OFV if it coincides with FV. Or, I could use OFV to be it's own system, but only if FV has two units on, etc etc etc. Right now, I am doing exactly this, only if there are two units on, does the third unit logic kick in (hence its name :) ), but it can go long or short regardless of what FV says, only its own internal logic of OFV vs SPX. So if third unit kicks in, I am long or short either 3 or 1 unit, never 2. So unit 3 logic is entering and exiting two units at a time, either pealing off 2 units of an existing FV position, or going back to full position with FV. This logic will start as of tomorrow.

If this logic had started today, OFV would have gone long 2 units at 1222 as stated in the post above (leaving short 1 unit).
More...

One last clarification. Note that the logic to enter the initial unit 1,2 and 3 are based on FV which is 100% quantitative, and S/R levels which are based on simple technical levels. The S/R level entries are disciplined, but discretionary. But after the initial 1,2 and 3 units are on, the 3rd unit is controlled by automated logic as described above, which by definition is 100% quantitative.

The idea is I control the macro (initial unit 1,2,3), but then algorithms take over and defend me from myself, and what I call "lollipop markets". Because three units are on, the market must be so out of kilt and reality, that I am confident that OFV captures its dynamics.
 
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