Odds Czar: Simple Biases in the Futures Markets 2006

I made a technical mistake in my last posting. Monday is not the day when the recently established short month-of-year signal will overlap the short day-of-month signal for the first time. The day-of-month signal doesn't kick in until the first trading day AFTER the trading day which is a 7th or higher date. (Friday was the 5th). My apologies, but no harm could have been done off that statement. I'm just revising it to say that Tuesday would be the ideal overlapping day I'm looking for.

Which is not to say it won't come a day early (or a day or two late). As there are no definitive czar chart signals for Monday, I'll probably attempt to jump the short-side gun in the indexes, but only if they demonstrate weakness. I look short the Russell, (weakest of the complex) on the opening price minus 33 percent of the previous three day average range on a stop. If it doesn't trade there, I'll probably go on a bike ride.
 
Art's futures biases for May 9.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias.
 

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As I've been saying, Tuesday is the ideal day for a market retreat based on a convergence of the calendar indicators. The month-of-year signal turned bearish on the second trading day of May. On Tuesday, the day-of-month indicator also throws its support to the bearish side. Considering an overbought market combined with the start of seasonal selling pressure and even the other czar signals being neutral-to bearish...
To put it bluntly, I'm expecting a down move Tuesday in the indexes. I'll start shorting on the open and add if the markets slide off the opening range. If at least 15 minutes pass and buying pressure has not emerged, I'll continue to hold positions until if and when the daily highs are decisively taken out.
 
Art's futures biases for May 10.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias

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I remain convinced that a bearish move is imminent. Tread carefully on Wednesday though. There is a Fed announcement.
 

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Art's futures biases for May 11.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias
 

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Art's futures biases for May 12.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias
 

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Art's futures biases for May 15.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias

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You can take my thinking out loud here with a grain of salt. What I'm about to say isn't based strictly on mechanical research (my forte). Years ago, though, i was fortunate enough to come in short on Black Monday. Despite it being my biggest windfall to date, I spent an untold amount of time thereafter flogging myself. The reason: after taking a $20,000 windfall profit right on the open, I instructed my trade handler not to take any new signals that day. The volatility was unprecedented. That decision cost me $50,000 in unrealized profits. It might not have been stupid when not figuring in hindsight--my stops on the second trade would have been ridiculously wide and my existing windfall was nothing to sneeze at. Still, it was a system violation in the strict sense of the word, and it ate away at me for months after.
Friday's action was very reminiscent of the Friday before Black Monday. The days leading into Friday were also similar in both eras. As you can see, the czar charts are in disagreement. I'd be inclined to follow the calendar side (third box, unanimously urging sells). This a definite seasonal short-friendly time-frame and the markets have been overbought.
If you do decide to trade the indexes, be aware that the countertrend moves are going to be huge. Don't trade anything if you can't weather significant heat.
For the brave (or determined) among us, the market should tip it's hand by 9:00. If it's trading near its lows at that time, you can enter using the existing highs as your stop point. (Again, that may represent some huge territory).
 

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Art's futures biases for May 16.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias
 

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Art's futures biases for May 17.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias
 

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Art's futures biases for May 18.

A "1" means bullish bias. A "-1" means bearish bias. The total is the sum of biases. A positive sum will be long bias. A negative sum will be a short bias. A sum of zero will be a neutral bias
 

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