The IBD Experiment: Trade $100k into $1M In (4) Years

Status
Not open for further replies.
After 13.2 months of trade, my EOD long-term futures system (see profile for details) has an annual return (compounded) return of 18.1% having just come out of a 15.77% (max) drawdown.

With 100% keep after worst-case slippage trading on average about (1) time a month - <i>we are back</i> on the C2 HOT FUTURES SYSTEMS list.

Thanks for following <b>The IBD Experiment!</b>

PS Also see ETF trading system.
 
The Technical Indicator: Battle lines drawn at major resistance

CINCINNATI (MarketWatch) — Technically speaking, the bull/bear battle lines have been drawn.

http://www.marketwatch.com/story/battle-lines-drawn-at-major-resistance-2011-11-15

Specifically, the Standard & Poor’s 500 Index and the Nasdaq Composite have both drawn sellers at the 200-day moving average, and the response to these areas should set the near-term technical tone.

The S&P 500’s hourly chart details the past three weeks.

The S&P has stalled again just under its 200-day moving average, currently 1,271.

This area remains initial resistance, while the S&P’s first significant support spans from 1,220 to 1,230.

Meanwhile, the Dow industrials’ near-term backdrop is slightly stronger.

From current levels, notable resistance holds at the November peak of 12,187.

Conversely, first support rests at its 200-day moving average, currently 11,977.

And the Nasdaq Composite’s near-term backdrop remains volatile.

Consider that the index has recently topped at 2,684, just under its 200-day moving average, currently 2,687.

Looking ahead, initial support holds around 2,650, and is followed by a major floor around the 2,600 mark.

Widening the view to six months adds perspective.

Two inflection points stand out:

* Nasdaq support at the 2,600 mark. The index bottomed last week at 2,601.
* Nasdaq resistance at the 200-day moving average, currently 2,687. The topped Friday at 2,684.

Its recovery attempt remains jagged, but intact, barring a violation of the 2,600 support.

Moving to the Dow, its six-month backdrop is slightly stronger.

Notice that the 200-day moving average, currently 11,977, now marks a center of gravity.

And the 200-day effectively defines the mid-point between two key technical levels. Specifically:

* Major support at 11,650, roughly matching its breakout point.
* Resistance at 12,284, matching the October peak.

Price action within this band marks the “expected” consolidation following the October breakout. Garden-variety consolidation.

And the S&P 500’s six-month view rounds out the benchmarks.

Consider that the S&P bottomed last week at 1,226, matching major support spanning from 1,220 to 1,230.

Conversely, the index has been capped by the 200-day moving average, and trendline resistance.

The bigger picture

As detailed above, the market price action remains volatile, though relatively technical.

Quickly consider the inflection points detailed in Monday’s review.
Major support vs. the 200-day moving average

Starting with the Nasdaq, two technical areas stand out:

* Major support at 2,600. The Nasdaq bottomed last week at 2,601.
* Resistance at the 200-day moving average, currently 2,687. The Nasdaq has topped at 2,684 on the recent upturn.

Meanwhile, the S&P 500’s backdrop is similar.

Again, two technical areas stand out:

* Major support spanning from 1,220 to 1,230. The S&P bottomed last week at 1,226.
* Resistance at the 200-day moving average currently 1,271. The S&P has topped at 1,267 on the recent upturn.

So very simply, the S&P and the Nasdaq are compressing between major support and the 200-day moving average.

Small- and mid-caps lagging behind

Against this backdrop, price action elsewhere leaves room for a bull/bear debate.

Starting with the small-caps, the Russell 2000 Index hasn’t retested its 200-day moving average.

In fact, it’s vacillating at the breakout point, also known as the “crash” range top.

Meanwhile, the mid-caps’ backdrop is almost identical.

Here again, the group is holding tightly to its breakout point, lagging behind the major U.S. benchmarks.

In a nutshell, small- and mid-caps have lagged the market recovery, and a violation of the 50-day moving average (in black) would raise a caution flag.

Summing up the backdrop

All told, the market backdrop remains technical, though highly prone to headline risk. It’s volatile.

Nonetheless, price action trumps other indicators, and the market recovery attempt is intact barring a violation of major support — S&P 1,220, Nasdaq 2,600 and Dow 11,650.
 
Just in case you were wondering how we've done since going "live" at C2 (since Oct 2010) in relation to our "back-test" up through our last closed trade...

3_yrnqtimer.jpg


- G
 
An IBD subscription is required, but I hope this helps...

Quote from pepdegree:

PS,where do you get the Investor's Business Daily information about general market conditions?

Thanks
More...

<b>Use Big Picture, Tools To Gauge Market</b>

http://news.investors.com/Article/508284/200910071731/Use-Big-Picture-Tools-To-Gauge-Market.htm

By JOANNE VON ALROTH, INVESTOR'S BUSINESS DAILY Posted 10/07/2009 05:31 PM ET

View Enlarged Image

If you want to catch the big winners, you have to bait your hook with research and watch your stocks like a bear ready to snag a salmon.

But make sure you keep a vigilant eye on the broader market, too.

Where it goes, so go most stocks; research shows that three out of four growth stocks follow the general market direction. If you're wrong about its current condition, the market will punish you — and all the big ones will get away.

Awareness of market direction is so important, it's the M in IBD's CAN SLIM investment method.

"The key to staying on top of the stock market is not predicting or knowing what the market is going to do," IBD's founder and chairman, William J. O'Neil, wrote in "How to Make Money in Stocks."

"It's knowing and understanding what the market has actually done in the past several weeks and what it is currently doing now."

One of the easiest ways to get a quick and clear picture of market action is to read The Big Picture, a column that appears on IBD's front page each day.

The Big Picture analyzes the major indexes' levels and volume, which are the principal gauges of the market's health. Those factors alone tell you a lot about just how much conviction institutional investors really have in their buying or selling.

The column also clues you in to leading stocks' action. If top-rated stocks move against the general market, it can signal a shift in the market.

With each Big Picture is the Market Pulse, which summarizes the day's action. The Pulse's current outlook gives an assessment of the market based on the most recent action. It flashes one of three possible signals: confirmed uptrend, uptrend under pressure or market in correction.

In addition to the market outlook, the Pulse gives investors the number of recent distribution days, if there have been any. Distribution days are higher-volume declines in the market. If they start adding up over a few weeks, it can signal a market top.

To fully understand the market's behavior, though, you should study the general market indexes every day.

IBD's General Market and Sectors page displays charts showing the daily action of the NYSE composite, the Nasdaq and the S&P 500. The page also includes IBD's New America index.

The daily moves can give clues about the market. For example, indexes often open strong and close weak in a bear market, while they usually open weak and close strong when the bull is running.

The page also provides other gauges, such as a list of index percentage gains over the past three months.

Investors.com publishes an hourly pulse-check of the market, found on the home page. In addition to giving you a feel for the market's activity, IBD market writers outline the action of the market's leaders. For example, these updates could be the first place where you learn about a top-rated stock breaking out of a base.

A check of the online Stocks On The Move column also helps you figure out market movement. A sell-off in a leading stock or more, for instance, could be a bad omen.

Once you have a solid feel for the market's direction, you'll know whether it's time to jump in or high-tail it out of the market. Just avoid swimming against the market current — that will only end with you getting all wet.
 

Attachments

A friend of mine uses ibd for market timing confirmation and stock selection as well. He made the comment one time that they are typically 1 or 2 days behind the curve. Do you see this as well?
 
<u>Yes, 1-2 days - during my 13 years of IBD experience has been the norm.</u>

Quote from mastacoli71:

A friend of mine uses ibd for market timing confirmation and stock selection as well. He made the comment one time that they are typically 1 or 2 days behind the curve. Do you see this as well?
More...

Absolutely...exact market timing is virtually impossible, however as a <b><i>trend-</i></b>following system (The IBD Experiment) -- getting the majority of trend gains, both up and down, will profit best in the long-haul.

This hasn't been optimal market conditions, as most know - so I suppose better gains lie down the road and for now keeping loss periods contained is of key importance.

- G
 
Current SHORT play (IBD "market in correction" call 18-Nov-2011) is bringing us out of drawdown...

NASDAQ-100 futures system -
Age: 14 months
Gain: 15.5%
S&P 500 gain:2.3%

NASDAQ-100 2X ETFs system -
Age: 13 months
Gain: 5.0%
S&P 500 loss: 1.0%

- G
 
So you're using signals from IBD and charging people money on C2? Why wouldn't they just use the signals themselves? Why pay a middleman to read a newspaper for them every day?
 
The Technical Indicator: Market bears back on offense

CINCINNATI (MarketWatch) — With this week’s downturn, the U.S. markets have violated several key support points.

http://www.marketwatch.com/story/market-bears-back-on-offense-2011-11-22-1210420

Each benchmark is now traversing less-charted territory, placing market bears back on offense.

The S&P 500’s hourly chart details the past three weeks.

The S&P has plunged to one-month lows.

From current levels, initial resistance holds at its 50-day moving average, currently 1,208 (not illustrated), and is followed by firmer overhead around 1,215.

A sustained break atop the 1,215 area is needed to neutralize this week’s breakdown.

Meanwhile, the Dow industrials’ near-term backdrop is similar.

In its case, significant resistance now holds at its breakdown point, around 11,650.

Conversely, modest support rests at this week’s low, just above 11,450.

And not surprisingly, the Nasdaq Composite has also broken down.

Looking ahead, initial resistance holds at 2,540, and is followed by the top of this week’s gap, at 2,567.

Conversely, notable support rests at the 2,500 mark, matching this week’s low.

Widening the view to six months adds perspective.

Even at first glance, the Nasdaq’s wider backdrop has turned for the worse.

Consider that this week’s breakdown follows a failed test of the 200-day moving average, confirming its longer-term downtrend.

Technically speaking, a sustained break atop the 2,600 mark is needed to place the brakes on bearish momentum.

Moving to the Dow, its six-month backdrop remains slightly stronger.

Nonetheless, the blue-chip benchmark has edged back into crash territory, and is challenging its 50-day moving average, currently 11,542.

Looking ahead, stabilization atop the 11,650 area would neutralize this week’s downdraft.

And the S&P 500 has also turned sharply lower.

In the process, it’s violated its breakout point — the 1,215-to-1,230 area — and its 50-day moving average, currently 1,208.

Market bears are technically on the offensive barring a break back to its former range.

The bigger picture

As detailed above, the U.S. markets have broken down technically.

Granted, the breakdown wasn’t spectacular, but it nonetheless places market bears on the offensive.

Moving to the SPDR Trust S&P 500’s (SPY) backdrop furthers the point.

Consider that as a slight positive, this week’s downdraft has been driven by light relative volume.

Still, November’s two strongest-volume sessions have been downturns, and Monday’s breakdown was driven by solidly negative breadth. Specifically, down volume surpassed up volume by nearly 15 to 1 on the NYSE.

Bearish price action.

And widening the view much further — to 11 years — highlights another issue.

Namely, the S&P has violated two longer-term inflection points.

To start, the S&P’s 20-month moving average, currently 1,214, has been a useful marker for the longer-term trend.

The index is trading comfortably under this level, signaling a longer-term downtrend.

Separately, the S&P has also broken back to a former 15-month trading range — it’s violated the 1,227 support.

And consider that this cap — the 1,215-to-1,230 area — has been punctuated by two mini crashes. The peak immediately before the May 2010 flash crash held at S&P 1,220, and the August crash was capped by the 1,230 mark for two months.

More plainly, the S&P is now traversing less-charted, and less stable, technical territory.

So all told, the U.S. markets’ longer-term downtrend has been confirmed. The S&P 500 and the Nasdaq Composite have failed tests of the 200-day moving average, plunging to a “lower low.”

And looking ahead, a reversal back atop the S&P 1,215-to-1,230 resistance is technically needed to place the brakes on bearish momentum.
 
Status
Not open for further replies.
Back
Top