Current Position: Long from 1455
Next Action: Stop at 1441.98 and go short
Score (0-10): 5=Neutral=Trend Score + Turn Score=8-3
The System is long, has turned neutral and is on the edge of turning bearish at 1447. I was tempted to exit the long position as SPX rose to 1450-1454 today
since that is near break-even and we could re-enter at the 1457 pivot,
but that would be against current System rules and force my current bearish bias on the System. On the other hand, there is an interesting scenario that leaves a little wiggle room for the System stop. 4-candle support for the long position stands at 1438 but 4-candle support for a new short position (which will be recommended if SPX drops below 1448) stands at 1442. I normally say stay in the current position even if the Score reverses until 4-candle hourly s/r is broken, but I don't recall the Score going beyond neutral to bearish during a long position and certainly not below the 20dSMA with moving averages starting to roll over and a 4-candle short entry about to be triggered. Since this is a bit of a gray area and since SPX has now consolidated for days with evidence suggesting an imminent 50pt+ move and since the technicals are potentially turning very bearish, I am moving the System stop up from 1438 to 1442 which is slightly more conservative, and the System would open a short position at that level. Of course, the System will stay long above 1442 and a rally to 1490+ is still possible.
The Sunday before last I committed to watching and reading no political, economic and market commentary for a week. I did not fulfill my commitment completely. On Sunday and Monday, I did nearly perfectly. By Tuesday, I could not resist turning on the TV news but left the volume off and limited my web browsing to lunch and a brief period at night for a couple days. By Thursday, I was back to probably 2/3 of my old habits. I did learn that Pandora helps limit my surfing/distraction time and I deleted most of my favorite links to avoid the temptation to keep surfing, so I only visit about 5 sites regulalry now, watch less TV and listen to more music. Having a purely technical System also helps. I'll be forced to spend even less time on the markets and news when I start a new job later this month, and my blog entries may be restricted to nights or early mornings. Everybody has heard of analysis paralysis and we tend to reinforce our subjective beliefs by the sites and shows we choose to follow, so the System and reduced news media time should keep me on the objective side of things and better able to spend time on job, family and fun. Good luck and enjoy the presidential debate. ;)
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