Trade Setups for May 1st

The S&P Model is short as of the close on April 27th. No open orders.

The NASDAQ model is long as of the close on April 29th. This model will sell the long and get flat at the close tomorrow May 1st if the VXN stays above 35.51 or if the VXN closes above 36.64 or if the VXN closes above the VXN open.

The VIX Model is long as of the close on April 30th. No open orders.

Ripe Trades

At left you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Friday with the entry price limits specified , good for the day only.
Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.
Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.
These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.
These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates
Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (AAPL,ADP,BBBY,CTAS,DTV,FISV,FLIR
FWLT,GOOG,LLTC,MCHP,NTAP,NVDA,ORCL,ORLY,PAYX,RIMM,SHLD,SPLS,STLD,
SYMC) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Trade setups for April 30th

The S&P Model is short as of the close on April 27th. No open orders.

The NASDAQ model is long as of the close on April 29th. This model will sell the long and get flat at the close tomorrow April 30th if the VXN stays above 35.93 or if the VXN closes above 36.96 or if the VXN closes above the VXN open.

The VIX Model is short as of the close on April 28th. This model will cover the short and get long at the close tomorrow April 30th if the VIX stays above 35.37 or if the VIX closes abov 36.08

Ripe Trades

At left you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Thursday with the entry price limits specified , good for the day only.

Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.

Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.

These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.

These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates

Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (AAPL,AKAM,AMAT,BBBY,CTAS,CTSH,
CTXS,DTV,ESRX,EXPD,FISV,FSLR,FWLT,GOOG,NTAP,NVDA,ORCL,ORLY,PAYX,RIMM
SHLD,SPLS,STLD,SYMC) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Trade setups for April 29th

The S&P Model is short as of the close on April 27th. No open orders.

The NASDAQ model is flat and in cash. This model will get long at the close tomorrow April 29th if the VXN stays below 39.91 or if the VXN closes below 38.53 or if the VXN closes below the VXN open.

The VIX Model is short as of the close on April 28th. This model will cover the short at 44.03

Ripe Trades

Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Wednesday with the entry price limits specified , good for the day only.
Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.
Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.
These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.
These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates
Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (AAPL,AKAM,AMAT,ATVI,BBBY,CTAS,
CTSH,CTXS,DTV,ESRX,EXPD,FISV,FSLR,GOOG,LLTC,NTAP,NVDA,ORLY,PAYX,RIMM,
ROST,SPLS,STLD,SYMC,URBN) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Trade setups April 28th

The S&P Model is short as of the close on April 27th. No open orders.



The NASDAQ model is flat and in cash.





The VIX Model is long as of the close on April 27th. This model will sell the long and get short at the close on April 28th if the VIX stays below 39.52 or if the VIX closes below 38.32 or if the VIX closes below the open.

Ripe Trade

Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Tuesday with the entry price limits specified , good for the day only.

Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.

Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.

These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.

These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates

Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (ADP,AKAM,AMAT,ATVI,BBBY,CTSH,
CTXS,ESRX,FISV,FLIR,FSLR,GOOG,MCHP,NVDA,ORLY,PAYX,RIMM,ROST,STLD,
URBN) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Trade setups April 27th

The S&P Model is flat and in cash. This model will get short the S&P at the close tomorrow April 27th if the VIX stays above 36.37





The NASDAQ model is long as of the close on April 21st. This model will stop out of the long trade @ 1321.5 And or the model will sell the long and get flat at the close tomorrow April 27th if the VXN stays above 36.79 or if the VXN closes above 36.8 or if the VXN closes above the open.



The VIX Model is short as of the close on April 21st. This model will cover the VIX short and get long at the close tomorrow April 27th if the VIX stays above 36.37 or if the VIX close above 36.82 or if the VIX closes above the VIX open.

Ripe Trades





Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Monday with the entry price limits specified , good for the day only.

Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.

Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.


These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.


These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.


Breakout candidates
Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (AAPL,ADP,AKAM,AMAT,BBBY,BIDU,CHKP,CTSH,CTXS,ESRX,FISV,FLIR,FSLR,GOOG,
MCHP,NVDA,ORLY,PAYX,QCOM,RIMM,ROST,STLD,URBN,VRTX,XRAY,YHOO) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Trade setups April 24th

The S&P Model is flat and in cash.

The NASDAQ model is long as of the close on April 21st. This model will sell the long and get flat at the close tomorrow April 24th if the VXN stays above 37.84 or if the VXN closes above 37.95 or if the VXN closes above the open.

The VIX Model is short as of the close on April 21st. This model will cover the VIX short and get long at the close tomorrow April 24th if the VIX stays above 37.01 or if the VIX close above 37.15 or if the VIX closes above the VIX open.

Ripe Trades

Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Friday with the entry price limits specified , good for the day only.
Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.
Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.
These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.
These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates

Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (AAPL,ADBE,ADP,AKAM,AMAT,AMZN,
BBBY,BIDU,CHKP,,CSCO,CTAS,CTSH,,CTXS,FISV,FLIR,FSLR,FWLT,GOOG,GRMN,JBHT
NVDA,ORCL,ORLY,PAYX,QCOM,RIMM,ROST,SPLS,STLD,URBN,VRTX,XRAY) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Trade Setups for April 23rd

The S&P Model is short as of the close on April 6th. This model will cover the short at the open tomorrow April 23rd.

The NASDAQ model is long as of the close on April 21st. No open orders.

The VIX Model is short as of the close on April 21st. No open orders.

Ripe Trades

Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Thursday with the entry price limits specified , good for the day only.

Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.

Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.

These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.

These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
Breakout candidates
Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (AAPL,ADBE,ADP,AKAM,AMZN,
BBBY,BIDU,CMCSA,CSCO,CTSH,CTXS,EBAY,FISV,FLIR,FSLR,GRMN,HANS,
MCHP,NVDA,ORCL,ORLY,PAYX,QCOM,RIMM,ROST,VRTX) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Trade Setups April 22nd

The S&P Model is short as of the close on April 6th. No open orders.

The NASDAQ model is long as of the close on April 21st. No open orders.

The VIX Model is short as of the close on April 21st. No open orders.

The road map image at left shows the current long and short term influences on the S&P and real time out of sample performance results on the models mentioned above, for a longer term model performance history click on the links above.

Ripe Trades

Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Tuesday with the entry price limits specified , good for the day only.Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates

Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (ADP,AKAM,ALTR,AMZN,CEPH,CMCSA,
CTSH,FISV,FSLR,GENZ,GRMN,HANS,LIFE,NVDA,ORCL,QCOM,VRTX) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Trade Setups April 21st

The S&P Model is short as of the close on April 6th. This model will cover the short and get long at the close tomorrow April 21st if the VIX stays less than 39.58

The NASDAQ model is flat and in cash. This model will get long the NDX at the close tomorrow April 21st if the VXN stays less than 39.89 or if the VXN closes below 39.71 or if the VXN closes below the VXN open.

The VIX Model is Long as of the close on April 6th. This model will sell the long and get short the VIX at the close tomorrow April 21st if the VIX stays less than 39.58 or if the VIX closes below 39.18 or if the VIX closes below the VIX open

Ripe Trades


Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Tuesday with the entry price limits specified , good for the day only.
Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.
Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.
These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.
These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
Breakout candidates
Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (ADP,AKAM,ALTR,AMZN,CEPH,CMCSA,CTSH,FISV,GENZ,GRMN,HANS,LIFE,NVDA,ORCL,
PPDI,QCOM,VRTX) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Bearish S&P pattern April 20th

I guess we’ll keep probing until the short term model gets short. The current bearish conditions of overbought price and oversold VIX still exist. Below are the results of the current pattern. This pattern has occurred 35 times since 1982 and 34 trades have been wins when using the entry and exit criteria below. FYI our intermediate term S&P model is short and the VIX model long from much lower levels. This setup could prove to be a good opportunity to short while the intermediate term S&P model is in a drawdown.

If open is greater than 872 then sell short @ Open - 3pts
Exit 1st profitable open or 2% stop loss

Entry criteria is based on the S&P futures price 9:30 EST time open. You can get quotes here.

Out of the 6 short term trades that have hit since we started this blog, we made 45.2 points on the long from April 1st , plus a 12pt win on the Feb 24th long entry, 15pts on the Jan 15th long entry, lost 17.3 pts from Jan 13th long entry, lost 17 pts on November 18th, and made 52 pts on the win from October 28th Net, the short term system is up 89.9 pts in 6 trades.

The performance results are based on 1 large contract trades since 1982

F^(% It

No changes to the intermediate term timing models, still short S&P and long VIX.

Ripe Trades



Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Monday with the entry price limits specified , good for the day only.
Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.
Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.





Breakout candidates




Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (ADP,ADSK,AKAM,ALTR,AMGN,AMZN,BIIB,CA,CEPH,CMCSA,CTSH,FISV,GENZ,GRMN,HANS,INTC,LIFE,LLTC,MICC,NVDA,ORCL,PPDI,QCOM,VRSN,VRTX,WCRX) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.
Lets monkey around, the girls are back.
Fuck it, after several requests and official poll we have decided to put the Ripe Trade girls back on display, we may even curse from time to time. We gave the PG version a try and noticed a drop in traffic, it didn’t work. I guess there is a reason marketers use sexy women to sell just about everything. Sorry father for I have sinned. If you think having the girls back is a good thing, show us the love and click on the advertisements, we get paid per click, you know.
Mgmt, enjoy.

Another bearish S&P pattern

Lets give this one another try. Yesterdays short setup didn’t hit the 840 stop but the current bearish conditions of overbought price and oversold VIX still exist. Below are the results of the current pattern. This pattern has occurred 26 times since 1982 and all 26 trades have been wins when using the entry and exit criteria below. FYI our intermediate term S&P model is short and the VIX model long from much lower levels. This setup could prove to be a good opportunity to short while the intermediate term S&P model is in a drawdown. Also option expiration is on Friday and you may remember from our prior post here options expiration has historically been bearish for the markets.

If open is greater than 867 then sell short @ Open - 3pts
Exit 1st profitable open or 2% stop loss

Entry criteria is based on the S&P futures price.

Out of the 6 short term trades that have hit since we started this blog, we made 45.2 points on the long from April 1st , plus a 12pt win on the Feb 24th long entry, 15pts on the Jan 15th long entry, lost 17.3 pts from Jan 13th long entry, lost 17 pts on November 18th, and made 52 pts on the win from October 28th Net, the short term system is up 89.9 pts in 6 trades.The performance results are based on 1 large contract trades since 1982

Trade Setups for April 17th

The S&P Model is short as of the close on April 6th. No open orders.

The NASDAQ model is flat and in cash. No open orders.

The VIX Model is Long as of the close on April 6th. No open orders.

The road map image at left shows the current long and short term influences on the S&P and real time out of sample performance results on the models mentioned above, for a longer term model performance history click on the links above.After a spectacular rally from the lows seen last month, the S&P appears to be running into overhead resistance.Is this the pause that refreshes, or is this the pause that reverses the market back towards the lows? Check out this video.

Ripe Trades

Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Friday with the entry price limits specified , good for the day only.
Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.
Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.
These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.
These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.
Breakout candidates
Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (ADP,ALTR,AMGN,AMZN,BIIB,CA,CMCSA,
CTSH,FISV,GENZ,GRMN,HANS,ILMN,INTC,LIFE,LLTC,MCHP,MICC,NVDA,ORCL,ORLY,PPDI
QCOM,SBUX,VRSN,XRAY,) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Bearish short term trade for S&P

The current price pattern in the S&P and low relative VIX is bearish for the S&P if tomorrows open, April 16th is above or equal to 840.3. This pattern has occurred 40 times since 1982 and 39 trades have been wins when using the entry and exit criteria below. FYI our intermediate term S&P model is short and the VIX model long from much lower levels. This setup for Monday could prove to be a good opportunity to short while the intermediate term S&P model is in a drawdown. Also option expiration is on Friday and you may remember from our prior post here options expiration has historically been bearish for the markets.

If open is greater than 840.3 then sell short @ 840.3
Exit 1st profitable open or 2% stop loss

Entry criteria is based on the S&P futures price.

Out of the 6 short term trades that have hit since we started this blog, we made 45.2 points on the long from April 1st , plus a 12pt win on the Feb 24th long entry, 15pts on the Jan 15th long entry, lost 17.3 pts from Jan 13th long entry, lost 17 pts on November 18th, and made 52 pts on the win from October 28th Net, the short term system is up 89.9 pts in 6 trades.

The performance results are based on 1 large contract trades since 1982

Meeting lines and Morning Doji Star candlestick

Today we test both the Meeting lines and Morning Doji Star candlestick patterns. This is part of a series of tests we are conducting to measure the efficacy of candlestick patterns.

This is the description as per the Lit Wick website:

Meeting Lines - How to Identify it:
The first day is a long black day, and has a body that is lower than the previous trend
The second day is a long white day, and has a body that is also lower than the previous trend.
Both days have identical closes

Morning Doji Star - How to Identify it:
First day is a long black day
Second day is a doji that gaps in the direction of the previous trend
The third day is a white day

As always when the term “Long” is used in the description, we will define “long” as a range that is greater than the 20 day moving average of range.

We tested this pattern on every one of the S&P 500 stocks since 1990 and compared the performance results to the average 5 day move in all the S&P 500 stocks. The entry was at the open on the day after the Meeting lines and Morning Doji Star pattern setup and the exit was at the open 5 trading days after entry.
This is what the Meeting lines and Morning Doji Star candlestick patterns look like.

Below are the results of the Meeting lines and Morning Doji Star candlestick patterns, also as a comparison the average 5 day holding period of all the S&P 500 stocks and all the other candlestick patterns that we have tested to date.

The meeting lines pattern is another poor performing pattern. The average 5 day return after the meeting lines candlestick setup is -.07% which is significantly less than the average +.38% 5 day return for stocks in a downtrend.

Trading setups April 16th

The S&P Model is short as of the close on April 6th. No open orders.

The NASDAQ model is flat and in cash. No open orders.

The VIX Model is Long as of the close on April 6th. No open orders.

The road map image at left shows the current long and short term influences on the S&P and real time out of sample performance results on the models mentioned above, for a longer term model performance history click on the links above.

After a spectacular rally from the lows seen last month, the S&P appears to be running into overhead resistance.
Is this the pause that refreshes, or is this the pause that reverses the market back towards the lows? Check out this video.


Ripe Trades

Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Wednesday with the entry price limits specified , good for the day only.

Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.

Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.

These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.

These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates

Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (ADP,ALTR,AMGN,AMZN,BIIB,CA,CMCSA,
DTV,FISV,GENZ,GRMN,HANS,HSIC,ILMN,LIFE,LLTC,ORCL,ORLY,PPDI,QCOM,XRAY) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Mat Hold candlestick pattern

Today we test both the Mat Hold bullish candlestick patterns. This is part of a series of tests we are conducting to measure the efficacy of candlestick patterns.

This is the description as per the Lit Wick website:

Mat Hold bullish - How to Identify it:
The first day is a long white day
The second day gaps up and is a black day
The second, third, and fourth days have small real bodies and follow a brief downtrend pattern, but stay within the range of the first day
The fifth day is a long white day that closes above the close of the first day

As always when the term “Long” is used in the description, we will define “long” as a range that is greater than the 20 day moving average of range. The term Small is also used as criteria for the real bodies for the 2nd 3rd and 4th days. For the purpose of this study we quantified “small” as less than 50% of that days range. FYI when we tried a more restrictive definition of small being less than 25% of range we only got 67 trade occurrences. We loosened the definition of small to less than 50% of range to increase the trade sample size.

We tested this pattern on every one of the S&P 500 stocks since 1990 and compared the performance results to the average 5 day move in all the S&P 500 stocks. The entry was at the open on the day after the Mat Hold pattern setup and the exit was at the open 5 trading days after entry.
This is what the Mat Hold candlestick pattern setup looks like.

Below are the results of the Mat Hold candlestick pattern and Mat Hold pattern while in an uptrend, also as a comparison the average 5 day holding period of all the S&P 500 stocks , all the other candlestick patterns that we have tested to date and the average 5 day performance of all the S&P 500 stocks while in an up trend. We quantified uptrend as a close above the 50 day moving average and an upward slopping 50 day moving average.

This is the 1st continuation pattern tested to date and the results are quite disappointing. As per the Lit Wick website the reliability of this pattern is high, Id love to know how they came to that conclusion because based on the performance results it makes a better short setup.

Trade setups April 15th

The S&P Model is short as of the close on April 6th. No open orders.

The NASDAQ model is flat and in cash. No open orders.

The VIX Model is Long as of the close on April 6th. No open orders.

The road map image at left shows the current long and short term influences on the S&P and real time out of sample performance results on the models mentioned above, for a longer term model performance history click on the links above.

Ripe Trades

Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Tuesday with the entry price limits specified , good for the day only.
Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.
Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.
These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.
These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates
Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (ALTR,BIIB,CA,FISV,FSLR,HANS,HSIC,
LIFE,LLTC,PPDI,XRAY) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Ladder bottom and Matching low candlestick patterns

Today we test both the Ladder bottom and Matching low candlestick patterns. This is part of a series of tests we are conducting to measure the efficacy of candlestick patterns.

This is the description as per the Lit Wick website:

Ladder Bottom- How to Identify it:
Three black days occur with consecutively lower opens and closes
The fourth day is black with some upper shadow
The fifth day is a white day that opens above the body of the fourth day

Matching Low - How to Identify it:
The first day is a long black day
The second day is a black day with a close equivalent to the first day’s close

Notice that in the lit wick description for a ladder bottom they mention “ some upper shadow”, but don’t define the term “some” . For the purpose of todays study and all other patterns going forward that call for “some” of anything we quantify the term as more than 20% of that days range.
In the matching low pattern, Lit Wick uses the term “Long”, we define long as a range that is greater than the 20 day moving average of range.

We tested this pattern on every one of the S&P 500 stocks since 1990 and compared the performance results to the average 5 day move in all the S&P 500 stocks. The entry was at the open on the day after the Ladder bottom/ Matching low pattern setup and the exit was at the open 5 trading days after entry.
This is what the Ladder bottom and Matching low candlestick pattern setup looks like.

Below are the results of the Ladder bottom and Matching low candlestick patterns, also as a comparison the average 5 day holding period of all the S&P 500 stocks and all the other candlestick patterns that we have tested to date.

Trading updates April 14th

The S&P Model is short as of the close on April 6th. No open orders.

The NASDAQ model is flat and in cash. No open orders.

The VIX Model is Long as of the close on April 6th. No open orders.

The road map image at left shows the current long and short term influences on the S&P and real time out of sample performance results on the models mentioned above, for a longer term model performance history click on the links above.

Ripe Trades

Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Tuesday with the entry price limits specified , good for the day only.
Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.
Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.
These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.
These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates
Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (ALTR,BIIB,FISV,FSLR,HANS,HSIC,LIFE,
LLTC,PPDI,XRAY) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

Bearish short term pattern for the S&P

The current price pattern in the S&P and low relative VIX is bearish for the S&P if tomorrows open, April 13th is above Thursdays high 854.5. This pattern has occurred 27 times since 1982 and all 27 trades have been wins with the entry and exit criteria below. FYI our intermediate term S&P model is short and the VIX model long from much lower levels. This setup for Monday could prove to be a good opportunity to short while the intermediate term S&P model is in a drawdown.

If open is greater than 854.5 then sell short @ open – 1 pt
Exit 1st profitable open or 2% stop loss

Out of the 6 short term trades that have hit since we started this blog, we made 45.2 points on the long from April 1st , plus a 12pt win on the Feb 24th long entry, 15pts on the Jan 15th long entry, lost 17.3 pts from Jan 13th long entry, lost 17 pts on November 18th, and made 52 pts on the win from October 28th Net, the short term system is up 89.9 pts in 6 trades.

The performance results are based on 1 large contract trades since 1982

Trading Setups

The S&P Model is short as of the close on April 6th. No open orders.

The NASDAQ model is flat and in cash. No open orders.

The VIX Model is Long as of the close on April 6th. No open orders.

The road map image at left shows the current long and short term influences on the S&P and real time out of sample performance results on the models mentioned above, for a longer term model performance history click on the links above.

Ripe Trades

Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Monday with the entry price limits specified , good for the day only.

Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.

Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.

These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.

These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates

Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (ALTR,BIDU,BIIB,FISV,FSLR,HANS,HSIC,
INTU,LIFE,LLTC,PPDI,YHOO) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are hereOne thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.

VIX and uptick rule

Yesterday Jon Najarian was on CNBC talking about how he thought the VIX would drop 10-15pts if the uptick rule is reinstated. We respect Najarians work but think this theory is false for the following reasons.

1) The VIX didn’t spike immediately after the July 6th 2007 elimination of the uptick rule. See chart below.
2) As one might expect the VIX has been increasing and decreasing with an increase and decrease in volatility in the S&P. See the chart below which overlays S&P over VIX and also shows the 30 day average of true range for the S&P as a measure of volatility. Note how the VIX closely tracks the 30 day average true range In S&P
3) The VIX made near record readings after suspension of uptick rule because of the 2nd worst bear market on record and extreme volatility in S&P ala average true range and not simply because the uptick rule was suspended.

Subscribe to RipeTrade, details here!

We think the VIX may drop another 10 -15 points only if the new bull market continues and average true range in the S&P narrows, not simply because the uptick rule has been re instated. One could even argue that the VIX may actually increase with the uptick rule back in place as traders will resort to buying puts if they cant get short because of no uptick and thus increasing option premiums and VIX values.

It doesn’t look like any changes to the uptick rule will happen soon as earlier today the SEC commissioners voted unanimously to propose 5 short sale restrictions for a 60 day comment period.

Subscribe to RipeTrade, details here!

Do Candlesticks work?

Today we test both the Homing pigeon and Kicking candlestick pattern. This is part of a series of tests we are conducting to measure the efficacy of candlestick patterns.

This is the description as per the Lit Wick website:

How to Identify it- Homing Pigeon
The first day is a long black day
The second day is a smaller black day that is within the body of the first day

How to Identify it- Kicking
The first day is a Black Marubuzo day
The second day is a White Marubuzo day that gaps upward

Notice that in the lit wick description for a homing pigeon they mention a “Long black day”, but don’t define the term long. For the purpose of todays study and all other patterns going forward that call for a “long day “ we quantified long as range greater than a 20 day moving average of range. In the kicking pattern the definition of a Marubuzo day was loosened to include days that have a tiny shadow less than 5% of range on the upper and or lower wick. Note we used the same definition for the concealing baby swallow pattern and if we used the most strict definition to have no shadow the pattern only shows up a handful of times.

We tested this pattern on every one of the S&P 500 stocks since 1990 and compared the performance results to the average 5 day move in all the S&P 500 stocks. The entry was at the open on the day after the Homing / Kicking pattern setup and the exit was at the open 5 trading days after entry.
This is what the Homing and Kicking setup looks like.
Below are the results of the Homing and Kicking candlestick patterns, also as a comparison the average 5 day holding period of all the S&P 500 stocks and all the other candlestick patterns that we have tested to date.

Trading updates for April 9th

The S&P Model is short as of the close on April 6th. No open orders.

The NASDAQ model is flat and in cash. No open orders.


The VIX Model is Long as of the close on April 6th. No open orders.

The road map image at left shows the current long and short term influences on the S&P and real time out of sample performance results on the models mentioned above, for a longer term model performance history click on the links above.







Ripe Trades


Below you will find a list of long and short candidates. Historically these long and short setups have performed quite nicely when using the entry levels specified next to the ticker and the exit rules below. Here is the real time out of sample performance review of the Ripe Trade results for the year 2008.These are the stocks that qualify for Thursday with the entry price limits specified , good for the day only.
Long Exit rules – Exit at the close on the day when a 2 day RSI close is greater than 50 or exit on the first profitable open with a 1 day delay. The 1st profitable open with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st open that is greater than my entry price.
Short Exit rules - Exit at the close on the day when a 2 day RSI close is less than 70 or exit on the 1st profitable close with a 1 day delay. The 1st profitable close with 1 day delay dictates that I hold the position for at least 2 trading days which includes the entry day then exit on the 1st close that is less than my entry price.
These setups don’t have a stop loss, our research has showed through back testing that this strategy works best without a stop loss. A few ways to limit the risk without a stop loss are 1) Position Size - lowering your position size lessens risk. 2) Watch out for single sector exposure, don’t let one single sector become too big a percentage of your account. 3) Consider using options for blowout protection. For longs consider buying way out of the money puts and for shorts consider buying way out of the money calls. This will create a catastrophe stop that protects you even if the stock has an extreme overnight gap.
These setups are for education and entertainment purposes only this is not a recommendation or solicitation. Any action that you take as a result of information, analysis, or advertisement on this site is ultimately your responsibility. Consult your investment adviser before making any investment decisions.

Breakout candidates
Here is a list of stocks that meet the breakout trade setup criteria of a 10 day Bollinger band width in the bottom decile for a 200 day look back. (ALTR,BIDU,BIIB,FISV,HANS,HSIC,INTU,
ISRG,LIFE,ORLY,PPDI,ROST,TEVA,YHOO ) The next step is to look for a big gap tomorrow (greater than 1 range above or below the close) then enter on a bull or bear range pivot in the same direction as the gap.The real time 2008 performance results are here
One thought on the breakout candidates is to incorporate trend and only take buy signals of stocks in an uptrend and sell signals for stocks in a downtrend. To get a free analysis of trend click here.