The S&P 500 went south and we cashed in our chips
For some time now we have been concerned about the lack of upside momentum and the divergences that have been building in many key oscillators. We were also concerned that we'd reached a very important Fibonacci level which we pointed out in a recent video.
It never ceases to amaze me how these levels have worked both in the past and in the present. If you're serious about the markets, you must pay attention to these key levels as many professional traders do, and perhaps you will understand why.
In today's short video, we're looking at the S&P 500 and some of the downside targets we have scoped out using a very simple tool. We had a nice run on the upside based on our "Trade Triangle" technology and we are happy to cash in our chips and watch from the sidelines for the time being.
As always you can watch our videos without registration and there are no fees involved.
I hope you'll find the video informative and leave your comment below.
All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub
John,
I have done what you have done almost exactly to the letter over the last 12 months or so and I am beginning to believe I might know a little bit of what I need to know. Having done what you have done and reviewed my notes and diaries, on Wedn, after have looked at Market Club, my Stockcharts and Decisionpoint charts I decided to short the SPY, XLF, and buy DNO.
Because I am trying to be disciplined and am trading with small sums using position management to limit my downside to 1% per trade, I didn't make a lot of money, but I gained a little more confidence and made money on each of these trades.
It's nice to hear that what I have been doing has the potential to pay the rent so I'll just stick with it.
P
I have been following the principles of the Perfect Portfolio with a small amount of capitol, using the principal of SAR that you espouse. I am long SPY on a green monthly triangle and long USO on a green monthly triangle and down substantially on both. Waiting for a red monthly triangle so I can do the reverse part. Have I missed something? I've been giving it a quarterly trial and am not very impressed so far. We still have a month and a half to go in the quarter so we'll see how it works out.
Phil
Phil,
Thank you for your feedback.
The Perfect Portfolio is designed for long-term traders. It is not a short-term trading program. I think we made that very clear in all of our videos and blog postings.
You mention SPY and the USO, what you did not mention was the FXE and the GLD both of which are doing well and are an integral part of the perfect portfolio. Do you not have those to ETF's in your portfolio? If you do not have them in your portfolio you are not trading the way we recommend.
Let's see how things work out shall we.
All the best,
Adam
You're right,I didn't mention them, I'm in them all for an equivalent amount as per the program. They (SPY and FXE short) are up a less than the oil and gold are down so overall I'm down a little. You did mention in your videos that it is a long term program but you reported excellent sequential quarterly performances and I had hoped that this quarter would perform as well as prior performances. That said, past performance etc.
There is still a month and a half to go and it is after all the stock market, last I knew there are no guarantees, so we will see what we will see. There is still plenty of time for positive change.
I have been intrigued by the perfect portfolio idea and am testing it side by side with a couple of other ideas that I have run across.
Thanks for your reply
Phil
Phil.
You might want to take a look our "World Commodity Portfolio" which has also performed well.
Q1 was not a good one for both portfolios. When that happens you normally would see the next quarter in a more positive light.
As you mention there are no guarantees in the markets and I'll add no guarantees in life.
http://club.ino.com/trading/2010/04/q1-gold-vs-world-commodity-portfolio/
All the best,
Adam
Adam,
Looks like we closed the week sitting right on the 61.8 retrace.
How long do we wait to get an idea of whether this will hold. Is there some theory out there about how long we need to stay above it?
Marvin
Marvin,
You're absolutely right we did pull back to the 61.8 Fibonacci retracement level.
I think this week should be very interesting, we will see how the market works itself out. I think it is going to have some further challenges ahead only time will tell.
Thank you for all of you previously comments.
Adam
Using the market club tools I gradually increased my portfolio with ultra-shorts (TWM/QID, etc.), until this sudden pullback happened. I always have longs and shorts, but the weight of each depends on where the trend is at... (using fibonacci and trade triangles) You will never hit a homerun, but you'll be much more consistent.
Alex,
Thank you for your insights.
Adam
I have been taking stocks off the table for three weeks now. Buying GLD with each reduction. What is your best estimation of the "top" in GLD.
John,
It looks like you've been doing all lot of things right.
In regards to GLD, I think we're going to have to wait and see how this current up move ends. Nobody I know is short this market which is always a concern. Let's see how things play out.
All the best,
Adam
RE: "Buy and Hold is Dead" I hear this a lot from traders these days and would like to caution new traders who hear this against over - trading. I know of one trader who sold off a very good stock at a loss in January when the dip came and spent the next few months chasing it without success. When did he finally get some shares? That's right...two days ago, just before the big sell-off. And when I asked him if he'd put in sell-stops...well, you know the answer.
Remember, a sell-off can be a great opportunity to grab some babies thrown out with the bathwater or to add to a position on an excellent company. Market Club has some great technical tools that can help you time your purchase.
Cheers.
If you got hurt on Thursday it's time to go back and review Adam's video on managing your stops. Probably the biggest difference between professional traders and retail traders. Using stops. Thanks for everything Adam!
John,
Thank you for your feedback. Yes it was bloody Thursday for a lot of traders. I'm glad to see you came out on top. Your problem is not something that is just isolated to your brokerage company. Many people could not get through to their brokers.
This problem is amplified by all of the other off-site exchanges that I believe probably caused yesterday's problem. The reality is when millions of people want to exit through a door that is only so wide people get hurt in the crush.
If anyone else would like to add to this conversation please feel free to as this was a history making event.
All the best,
Adam
Adam,
Yesterday (Bloody Thursday) I was watching my short make money
then when I went to ring the cash register
my brokerage website wouldn't take the trade
the sell took 35-minutes to execute,
I made some money, but not as much as if the trade
would have been executed when placed.
The deck is stacked against us little guys Adam.
But the good news -- this is the first time I ever made money
on a huge sell off -- a big difference from Oct. 1987, when my
S&P index mutual fund got crushed. Buy and Hold is dead.
If anybody had a brokerage service that continued to take trades
during the crunch, I would appreciate a recommendation.
Thanks.
this trade worked fast!
Adam,
Looks like you nailed it this time. At 2:35 today May 6, we just went through the 50 retrace.
I would like to add that to be well rounded, one must take advantage of the huge library of educational videos at Market Club. They offer every trading method known to Wall Street. It took me months of studying to learn about Candle Signals, Trend Lines, Higher Highs & Higher Lows, Lower Highs & Lower Lows, Volume with the VIX, Stochastics, RSI, MACD, and watch all the Webinars -- just to name a few. I felt overwhelmed, but kept plugging away until now I feel very confident using a combination of the above with the Daily, Weekly, and Monthly Trade Triangles. All in all, I think Market Club is the best resource I have used in my 40-years since I bought my first mutual fund. I think Adam is very consistent in presenting his product and he has really made a difference in my trading. DO YOUR HOMEWORK. Go to the MC Library and study all those videos -- you will find the best traders teaching you how to use all the tools you could possibly want to use. Then you must select the tools that work best for you. Every time I lost money I would go back to my notes from the videos and see something important that I forgot to watch for. But now swing trading is fun, and I make enough mula to pay the rent.
Happy Trading ya'll.
Alex,
Watching free videos and not taking the time to learn about our Trade Triangle technology with a 30 day risk free trial you missed out. You do not know exactly our approach to the market. We are not an advisory service.
We teach traders how to trade with our tools. If you had of traded the opposite of our Trade Triangles for the past year you would have lost money, Aa lot of money.
I wish you success.
Adam
I jumped to the short side yesterday... been a great move. I suspect this momentum down will last a little while at least.
After seeing your ad in Barron's, I figured I'd see if your system truly works.
I have been watching your videos for almost a year now.
I must say, I am not impressed.
Quit the contrary, if I did the opposite of what you suggested, I would have been done better than your recommendations.
Keep up the lousy work.
Alex,
Thank you for your feedback.
I see that you are not a MarketClub member and probably don't understand how our Trade Triangle technology works.
If you were a member you would see that our weekly Trade Triangle flashed an exit signal. The fib numbers are important you can ignore them at your own risk.
All the best,
Adam
Gimme a break. You've been touting these Fibonacci retracements since December 2009. Now 6 months later, you are patting yourself on the back ?
Your system is crap, plain and simple.
Hi Adam,
Thanks again for helping us small investors with your Red Triangle Alerts. I think it's worth noting that a typical 9% max. correction (nothing greater then a 9% pull-back has occurred since the Mar.2009 bottom) would put the S&P around 1100, right at the 61.8 Fibonacci. If this level doesn't hold, we will probably be getting a Red Monthly Triangle for a deeper correction.
Cheers.
In the Perfect Portfolio, you would not have cashed in your S&P 500 chips as the M Triangle is still green, right? But playing the S&P as an individual stock using the M & W triangles, you did cash it in. So why the discrepancy? Why not play the Perfect Portfolio stocks the same way you play all the other stocks? Are there better results with one than the other? It would seem like one way or the other should work best.
Dabear,
The Perfect Portfolio remains long the equity markets and will only reverse when a red monthly Trade Triangle kicks in. This portfolio is for longer-term investors.
Our other portfolio the one you refer to uses the monthly for trend and the weekly for timing. It is more aggressive and trades much more than the Perfect Portfolio.
Every investor needs to decide what type of trader they are for themselves.
All the best,
Adam
Thanks for the vidoes. I only watch the s&p index because I push mnoney in and out of the index fund within an annuity I have. I'm out of the s&p now and I'm glad I am. Watching your video that explained that you too were out for the monthly position made me feel like I'm doing the right thing. Thanks!
Adam,
This is not the first time people have said the high is in for the rally (although n this case it is very, very probably true). You had the same calls at the 31.8% retracement, 51% retracement etc... the number of people who went short this rally and lost their shirts(me included) since June last year can fill a state, so it is a bit cheeky to take credit - if you keep saying the market will go down, the market will go down (while it is going up), of course, like the law of averages at some point it will go down.
In fact, what you should really say is if/when your monthly trade triangles signal short....otherwise you are just trying to call the top many times over, and as everyone knows, no one has ever done it successfully, so why bother and look stupid? And even more stupid trying to claim credit for something that will inevitably happen after umpteen warnings!!!
Muneer,
The credit goes to our Trade Triangle technology.
All the best,
Adam
Muneer, AMEN you are 100% on the money.
I too was watching these reversal calls made by Market Club.
Every one was wrong, no reason to think this call will be any different.
I have news for you Adam....until the Fed removes the free money from Wall Street, this market will not have a meaningful correction.
No matter what your "trade traingles" tell you.
You guys want a way to now get screwed shorting. Its as easy as a moving average. 10 day ema up find a good long entry. 10 day ema down find a good short entry. Its not rocket science.