Market Update for Tuesday, May 31, 2011

Today E-mini reached overbought levels on both 1-hour and 4-hour time frames. After reaching overbought levels, it sold off and then it came back to higher prices, however, not reaching overbought levels this time. Some call this a divergence; however, MACD is positive on both time frames and it never turned negative on the 4-hour chart.

At the moment I continue in cash since I still don't see a good low risk/high reward opportunity in the markets.
I recommend you do the same and no matter how long it takes for this opportunity to appear, just sit tight and wait.

Market Update for Monday, May 30, 2011

The markets were closed today for Memorial Day. The futures, however, have been on the move. The E-mini has been moving higher (it's up 9 points as I write) almost reaching overbought on the 4-hour chart. The Dollar Index on the other hand, has been moving lower, and it has already reached oversold on the 4-hour chart. On the daily charts, none of them have reached any extremes and they could move either way. Since we are coming from oversold in the daily chart for the Dollar Index, I would feel that we could still move to overbought on this time-frame. My gut feeling is tomorrow we will see a temporary high on E-mini (a temporary low on the Dollar Index) and then E-mini will move lower to make a new low. This is my gut feeling, so don't take it as trading advise. We'll see what happens tomorrow and beyond.

Market Update for May 27th

Today was a typical trading day prior to a holiday: not much happening in the markets. Usually, it is not a good idea to trade on short days or prior to long weekends; it is better to take the day off and enjoy a day with the family or do something that is not market related, IMHO. I was hoping that today /ES (E-mini) would hit overbought on the hourly chart, and although it came close to doing so, /ES hasn't reached overbought on the hourly. I expect this will happen on Tuesday and depending on the volatility, Tuesday could be a good day to go short.
I am not recommending a short position though, we have to see how Tuesday behaves to determine which way to go. The 4h chart shows that /ES is coming from oversold and could go to overbought; however it doesn't mean that /ES cannot re-visit the oversold level again before going to overbought. This is why I am still in cash and waiting for a signal to go either direction. Have a good weekend and Happy Memorial Day.

Sold UPRO at 79.40 Today

I sold my UPRO position at 79.40 for a 2.9% gain. I am cash at the moment waiting for another opportunity to enter a trade. I believe we could still move higher because we haven't reached overbought conditions on /ES (E-mini) on the hourly chart. Once we reach the overbought condition, if we reach it, we'll check the market conditions again to see the trading opportunities. I'll post when this happens.

Holding Upro Still

It's been a busy day and I won't be able to follow the markets regularly until June 7 since I am out of town on medical leave with my family. I am still holding UPRO and looking briefly at the markets, it looks like the time to sell UPRO might be tomorrow if the markets continue higher; otherwise, I'll hold it until a more favorable day. It looks like UPRO closed around 78.75 for a 2.1% profit so far, although it traded as high as 79.72 today. Hopefully, it will come back to this level and I'll be able to sell; being away makes it more difficult to keep up with all the price movement. I hope someone else was able to buy it and get a nice profit on it.

I went long at the market open today

I went long right at the market open today and bought a few shares of UPRO at 77.10, this is a leveraged 3x SPY ETF, a lot more riskier than buying Spy, but I feel the market conditions are favorable for holding it for a few days and have some profits. As usual, stop loss order will be placed.

E-mini Acting as Expected

Tonight the E-mini is acting as expected. During the past hour it continued lower and RSI became more oversold on the 4-hour chart. MACD hasn't turned positive yet. Tomorrow will be a very interesting day and I might go long tomorrow and buy some shares of SPY. I believe we will revisit yesterday's lows and probably go lower. Even if we continue lower, I feel comfortable entering a long position tomorrow, I feel risk/reward, this won't be a bad trade.

E-mini Bounce from Oversold on 4-hour Chart

Yesterday, the E-mini touched the oversold condition on the 4-hour chart. This could lead me to believe that we are going up from here. However, there are a few conditions why I am not convinced: 1. On the 4-hour chart, we are coming from an extreme overbought condition; thus in theory, we should see and extreme oversold condition; this hasn't happened yet. 2. The MACD hans't turned to positive yet, this leaves room for more downside. Perhaps we won't see the bottom today and we'll have to wait a day or two to see it. We'll see.

Update for May 23rd - 2011

Today was a fairly volatile day, the market gapped down at the open and it seemed like it would continue lower, but it didn't. However, it doesn't mean we are out of the woods yet. I believe, today's lows will be revisited tomorrow probably creating an opportunity to buy the SPY. My recommendation is to buy the SPY tomorrow at 131.60 or anything lower if possible; definitely at any value below today's closing price of 132.06

E-mini S&P 500 Index Futures Dropping Tonight

E-mini S&P 500 Index Futures are dropping tonight, we could have a gap down at open tomorrow. E-mini crossed below the 50% line on the channel trending down since its high at 1373.5. RSI on the hourly chart is oversold, however, it is not yet oversold on the 4h chart and on the daily chart. The market may need to go to oversold levels on those time frames before it resumes its up-trend.

Signals at end of the trading day

I will post here signals at the end of the trading day each day if there are any, either to go long SPY or to short SPY. There can be times when there are no trading signals for a couple of days, while there may be times when there could be a signal to go long spy one day and sell it at the end of the day the following day.

One Year Return on Investment

Using this trading model, in one year a $10,000.00 account would have grown to $12,051.00 if you had started trading at the beginning of 2010; that's a 20.5% return on invesment.

Date	Signal	Spy Price	Gain	% Gain	# Shares	Ammount	Gain	Account Balance
31/12/2009	Buy	$111.44			89.00	$9,918.16		$10,000.00
04/01/2010	Sell Long	$113.33	$1.89	1.70%		$10,086.37	$168.21	$10,168.21
08/01/2010	Short	$114.57	$0.68	0.60%	88.00	$10,082.16	$59.84	$10,228.05
20/01/2010	Cover Short	$113.89				$10,022.32
21/01/2010	Buy	$111.70			91.00	$10,164.70
02/02/2010	Sell Long	$110.38	$-1.32	-1.18%		$10,044.58	$-120.12	$10,107.93
04/02/2010	Buy	$106.44			94.00	$10,005.36
11/02/2010	Sell Long	$108.13	$1.69	1.59%		$10,164.22	$158.86	$10,266.79
05/03/2010	Short	$114.25	$-2.59	-2.22%	89.00	$10,168.25	$-230.51	$10,036.28
24/03/2010	Cover Short	$116.84				$10,398.76
25/03/2010	Buy	$116.65			86.00	$10,031.90
30/03/2010	Sell Long	$117.40	$0.75	0.64%		$10,096.40	$64.50	$10,100.78
12/04/2010	Short	$119.74	$0.38	0.32%	84.00	$10,058.16	$31.92	$10,132.70
16/04/2010	Cover Short	$119.36				$10,026.24
16/04/2010	Buy	$119.36			84.00	$10,026.24
20/04/2010	Sell Long	$120.88	$1.52	1.27%		$10,153.92	$127.68	$10,260.38
27/04/2010	Buy	$118.48			86.00	$10,189.28
12/05/2010	Sell Long	$117.45	$-1.03	-0.87%		$10,100.70	$-88.58	$10,171.80
20/05/2010	Buy	$107.54			94.00	$10,108.76
27/05/2010	Sell Long	$110.76	$3.22	2.99%		$10,411.44	$302.68	$10,474.48
15/06/2010	Short	$112.00	$4.58	4.26%	94.00	$10,528.00	$430.52	$10,905.00
24/06/2010	Cover Short	$107.42				$10,097.48
29/06/2010	Buy	$104.21			104.00	$10,837.84
07/07/2010	Sell Long	$106.11	$1.90	1.82%		$11,035.44	$197.60	$11,102.60
23/07/2010	Short	$110.41	$1.11	1.02%	100.00	$11,041.00	$111.00	$11,213.60
11/08/2010	Cover Short	$109.30				$10,930.00
11/08/2010	Buy	$109.30			102.00	$11,148.60
27/08/2010	Sell Long	$106.86	$-2.44	-2.23%		$10,899.72	$-248.88	$10,964.72
30/08/2010	Buy	$105.31			104.00	$10,952.24
01/09/2010	Sell Long	$108.46	$3.15	2.99%		$11,279.84	$327.60	$11,292.32
02/09/2010	Short	$109.47	$-4.51	-3.96%	103.00	$11,275.41	$-464.53	$10,827.79
21/09/2010	Cover Short	$113.98				$11,739.94
23/09/2010	Buy	$112.50			96.00	$10,800.00
24/09/2010	Sell Long	$114.82	$2.32	2.06%		$11,022.72	$222.72	$11,050.51
29/09/2010	Buy	$114.47			96.00	$10,989.12
01/10/2010	Sell Long	$114.61	$0.14	0.12%		$11,002.56	$13.44	$11,063.95
04/10/2010	Buy	$113.18			97.00	$10,978.46
05/10/2010	Sell Long	$116.04	$2.86	2.53%		$11,255.88	$277.42	$11,341.37
11/10/2010	Short	$116.65	$-0.08	-0.07%	97.00	$11,315.05	$-7.76	$11,333.61
19/10/2010	Cover Short	$116.73				$11,322.81
26/10/2010	Buy	$118.72			95.00	$11,278.40
05/11/2010	Sell Long	$119.95	$1.23	1.04%		$11,395.25	$116.85	$11,450.46
16/11/2010	Buy	$118.16			97.00	$11,461.52
18/11/2010	Sell Long	$119.96	$1.80	1.52%		$11,636.12	$174.60	$11,625.06
26/11/2010	Buy	$118.80			98.00	$11,642.40
02/12/2010	Sell Long	$122.56	$3.76	3.16%		$12,010.88	$368.48	$11,993.54
17/12/2010	Short	$124.30	$-1.35	-1.07%	96.00	$11,932.80	$-129.60	$11,863.94
27/12/2010	Cover Short	$125.65				$12,062.40
26/11/2010	Buy	$125.65			94.00	$11,811.10
05/01/2010	Sell Long	$127.64	$1.99	1.58%		$11,998.16	$187.06	$12,051.00
							$2,051.00
						Aprox ROI	20.51%
Initial Investment	$10,000.00