Trading the SPI

[wayneL]

I've been bearish on the banks since before last week; am long puts in two. MBL is the next to go IMO. I think the selloff on some of the banks has been overdone, so might see a bit of a rally, but I think it'll be a down week overall for them.

Same with the XJO, and especially if the Dow gets done, which I'm anticipating.

Lets say everybody comes to their senses and get all bearish on industrials/banks etc, but metals and oil rally.

What then for XJO? e.g. pull up a chart of gold and XJO and see the correlation.

??

 

[Porper]

Lets say everybody comes to their senses and get all bearish on industrials/banks etc, but metals and oil rally.

What then for XJO? e.g. pull up a chart of gold and XJO and see the correlation.

??

If the DOW retraces, which it needs to do before the next leg up to all time highs i.m.o., can the XJO isolate itself from this ? No chance is my bet.

I think I have been brainwashed by you lot I am short two stocks and am not long anything at the moment.

Just on oil and Gold, if we have a fairly swift downturn on the XJO, even if oil and gold rise, it doesn't mean oil and gold stocks will rise.They will be the ones to jump on when the markets fire up to all time highs again.

 

[BudFox]

The link to the report is

http://www.spitraders.com/spi 25th SEP.pdf

they seem to be very accurate, I think you guys are correct, if the DOW tanks, SPI will goto 4900.

I am buying SPI at 4951 today and selling up near 5022 to 35

 

[iSPI]

For those who think the DOW is going to tank ( and I tend to agree)
and buying the SPI.

Can I ask why are you buying it?

Are you
1: Trying to get a quick trade in because the SPI looks oversold
2: Working on some sort of time based system and believe that
the DOW won't tank until xxth of XXX
3: Like to take the contrarian approach
4 Some other reason?

The Dow

 

[BudFox]

Trading is not complex. Mondays has a 75% upward Bias , After a down week, Mondays usually pushes lower before moving up. There is support at 4950. 15 point stops is what I will use.. After that its 4930 and 4912 as per Index Selects report. This is a short term trade. I wil short higher at 5022 - 35

Average true range for Day SPI is around 46 pointson my charts, I want to trade the rotation, hard to see 6 down days in a row and Friday was not as weak as some expected, I am hoping for a bounce.

 

[Nick Radge]

The SPI has a 45% chance of closing above its open on a Monday.

If it opens below Fridays close it has a 46% chance of closing higher.

If it opens above Fridays close then comes back to test the close price it only has a 40% chance of closing higher.

If it opens above Fridays close it has a 48% chance of going on with it and closing higher.



Where do you get a 75% bias from?

 

[Bronte]

Good morning.
This is fantastic guys
Opposing views & discussion on 'Trading the SPI'
We have a Gann Fibonacci 50% level at 4964
Welcome Nick.

 

[BudFox]

Hi Nick,

I said upward bias .. not a solid statistic. You have probably done many studies on this, so pardon my loose figures. Monday naturally has a intraday upward bias after 10.30am in my opinion... any chart will present this pattern, however the odds are probably in reality, 50 50 on a clsoing basis, i am talking intraday bias though. If Mondays price action is negative on the open, I have seen many setups for long entries if the previous day was down. Most studies I have done with open close relationships have been around 40 to 60 % , any strategy I have looked at using daily bars is quite sporadic, any strategies you may have with day session SPI would be interesting to see.

Cheers

Bud

 

[Bronte]

'Trading the SPI'
Sycom closed at 4966
If we open around here on Monday
Then we will be looking to Buy the SPI

Opened at 4964
Now 4980 High

 

[BudFox]

Bronte, pleas explain how you got that buy level?

 

[BudFox]

Nick, thats the exact set up i was trying to explain, upward bias *GAP FILL*

 

[Bronte]

Opened at 4964
Now 4980 High

SPI story so far:

 

[sails]

Bronte, pleas explain how you got that buy level?

Bud, before this causes another row I think Bronte has already stated it in post #1608 where she states:

We have a Gann Fibonacci 50% level at 4964

From the basic Gann I learned, 50% is the most important - so this statement of Bronte's tells me that not only is the 50% in play, but with the adjective of "Gann" before the word "Fibonacci" also tells me there most likely a confluence other Gann numbers such as squaring of time and price, etc, etc making this 50% a stronger level.

To press for the exact formula is probably akin to asking Colonel Sanders for his recipe . I am grateful for what Bronte is willing to share for free - same with Yogi and others who do the same.

BTW I couldn't find a price on Index Select - are they free?

 

[Bronte]

Good morning.
This is fantastic guys
Opposing views & discussion on 'Trading the SPI'
We have a Gann Fibonacci 50% level at 4964
Welcome Nick.

This should be enough to answer your question Bud.
There is also a lot of great information
in this 'Trading the SPI' thread.

Just seen your post thanks Margaret

 

[swingstar]

Some (probably useless) trivia for the day... this is the first day since May 03 that the XJO has opened below the 200 day MA.

Lets say everybody comes to their senses and get all bearish on industrials/banks etc, but metals and oil rally.

What then for XJO? e.g. pull up a chart of gold and XJO and see the correlation.

??

Same reasoning as Porper here. I can't see XJO holding up against falls in the Dow AND banks (what I'm both bearish on short-term).

 

[Euler]

Opened at 4964
Now 4980 High

great call .... if you don't mind can you explain how you worked 4964 as the resistance?

 

[sails]

great call .... if you don't mind can you explain how you worked 4964 as the resistance?

Euler - I see this is your first post - welcome to ASF! I expect Bronte is busy with her trading ATM, so I will give you my thoughts.

I understand these levels are calcuclated using Gann methods and whole text books and courses have been written on the subject of Gann. Certainly not something that Bronte can give a simple answer to in a post.

This is so much like options where someone brand new to options asks "which option should I buy" - just wants a simple answer. Options, like Gann and other analytical methods take time and study to learn and comprehend.

Would suggest you have a look at "How to Make Profits in Commodities" by WD Gann - that might help you get some of the basics so that you can interpret Bronte's posts.

Hope this helps!

 

[Euler]

Thanks sails for your comments ... very intriguing and a lot of learning to do.
Will follow the posts with interest after having read and absorbed as much as I could in one session. Cheers

 

[Bronte]

Thank you Margaret

 

[Bronte]

Todays SPI chart: