Fri 8/31/2012. Daily Update.

The System was stopped out at 1398 yesterday for a loss of 7pts as forewarned. Perhaps another point or two below the pivot would have kept us in the trade. The System is now 0 for 4 in official trades with a loss of 37pts. I'm a little bummed. Even when SPX has chopped around in the past in between trends, previous System iterations would usually have a string of +/-1% leaning slightly towards small losses, but the recent SPX range has been so historically tight that all of the trade results have been small losses. I am hopeful the next trend will get us back near flat or better. S2 remains bullish, so the System will go long again at a break through hourly resistance (currently 1413.95). I suspect the conditions necessary for a System short trade would be if SPX trades down to 1380-1390 and bounces back near 1400 or the 20dSMA. The Jackson Hole speech was just released and appears to be a rehash of recent comments that the Fed is there to provide a backstop but probably not just yet. Initially, the market sold off but is bouncing a little now. I'm not sure there was enough of a surprise in either direction to overcome the technicals, so the System remains bullish for now awaiting the next trade trigger. Good luck.