Courtesy of Allan
SPX Hourly Trend Model————–>LONG (hourly charts are specifically for day-trading)
TJX Daily Trend Model——————>SHORT
GS Weekly Trend Model—————–>LONG
Weekend Market Analysis
Is there any reason to not trade this model, or for that matter, to trade only this model?
[click on charts to enlarge]
Boredom would be one reason. In over three months, there has only been a single trade. The success of this model is especially satisfying because it represents a refusal to heard, to graze in the crowd of the nasayers who complain that volatility (VIX, VXX, XIV) is a rigged game, only useful as a hedge, or a very short-term trade. What our algorithm says is a trend is a trend, whether it be in volatility, stocks, precious metals or entrails. Trend following is a just too simple minded approach to trading to garner much respect from most market technicians.
For me, the less lines and noise on the chart, the better I see what is really happening.
Silver and Gold are quickly becoming my second favorite trend models. As I suggested so many times, precious metals are some of the best trending commodities and both SLV and GLD have provided excellent trends to participate in this summer. Going into fall, they are both still Long, but look at all of that air between price and the trend line. That space may need to get filled before another leg up.
As for the indices, let’s take a look at the performance of the Dow over the summer:
What strikes me most about this chart are the two excellent trend signals. But also note how well the trend line provided support and/or entry points all of the way up. That also suggests that should that trend/support line ever get broken, we could be looking at a sizable decline. As always, the system will have us Short just after that decline gets going.
The summer rally in stocks is mirrored by summer rallies in commodities, particularly DBC and USO. As is apparent in the their respective charts below, the times they may be a-changin’.
The trend models highlighted in this issue constitute a core portfolio, well diversified and still manageable on a day-to-day basis. VXX/XIV for volatility and simply just stellar results, DJIA for stock market direction, GLD/SLV for precious metals (and global financial uncertainties), DBC for a basket of hard assets and USO because crude oil is such an integral part of world economies. Not that the other trend models should be dismissed, but if I were starting this service now, I would be very tempted to go with just these models and of course, up the subscription price to compensate me for the simplification. There is some logic in there……somewhere.
Weekend Trends Table
Sep 22, 2012
Allan Trends provides trading ideas based on Technical Analysis and signals that follow the trends. Allan covers about 30 stocks, indexes and ETF’s, including Hourly Models in SPX and QQQQ for shorter-term analysis. Most trades last for weeks to months. Learn more here.