Saturday 11 February 2012

Week of 2012 FE 10

SPY fell by 0.1% this week, while my account rose by 1.0%.  To get this 1.0% gain, I had to lower my loss floor by 2.5%.

Euro news: The prime minister of Greece did not resign as threatened, but six (so far) of his cabinet ministers *have* resigned and one of his coalition partners (LAOS) has apparently left the coalition.  There is rioting in the streets of Athens and Thessaloniki.  On Sunday, the Greek Parliament is supposed to vote in favour of the bailout, but many politicans believe that a vote for the bailout would be career suicide.  Germany continues to insist that they will pull the financial plug if the Greeks don’t agree to the latest demands.  Increasing numbers of people are getting sick of this charade and wishing that The Powers That Be would stop pretending that Greece didn’t actually default two years ago.

Daily % gain
Max % lossResults
Symb  Buy Fri   Mon   Tue   Wed   Thu   Fri Beg   End
RWM  JA06 -8.6  17 -8.3  0 −5.1%
TZA#0  JA23 -17.2  12 -16.3  0 −9.0%
TNA  FE01 +9.0  17 +7.7  0 +0.5%
TZA#1  FE07 -0.7  10 -1.3  10 -0.1  21 +4.1  22 −15.2 −11.0
SPY +7.2 +7.1 +7.4 +7.7 +7.9 +7.1
me -2.2 -2.2 -2.2 -2.3 -2.2 -1.2
floor -2.2 -2.2 -3.9 -3.7 -5.2 -4.7

MACD-based swing trades

Buy dateBuy priceSell dateSell priceProfit
TZA#1 FE 07 15:00 $18.69 $18.67 (not yet)        
FE 09 11:00 FE 09 12:17 $18.79 $18.75

On Tuesday, as the 3pm hour approached, it was clear that there would be a “buy” signal for TZA, so I logged into Schwab Active Trader and waited.  As the seconds ticked by during the 15:00 minute, I received popup messages telling me that “I” had placed an order to buy TZA, that “my” order had executed successfully, and that “I” had placed a hard-stop order for $15.87.  I immediately deleted the hard-stop and replaced it with a 15% trailing stop, which initialized itself at exactly $15.87.  My robot had worked perfectly!

On Thursday at 11am, there was a “buy more” signal, but the robot didn’t do anything because my ISP had picked that day to screw around.  There were lengthy periods all day when ping got no reply from the server, or ping worked but ssh couldn’t log in, or I could log in but programs wouldn’t run because their execution environments were screwed up.  It seems that my ISP is trying to push me off the El Cheapo hosting that I already paid for up through September!  I thought again about buying a wall-wart plug computer and running the server in my house.  By the end of the day, the ISP had restored normal operations, so I still haven’t bought my own server for $165 (plus import duties).  Anyway, I bought the shares manually, 77 minutes later than the model but for slightly less money.

Surfing the oscillations

Everything always takes longer than expected!  Here is an hourly chart for IWM since the last cycle-low.  The beige line is supposed to be the “daily-cycle trendline” which remains unbroken after 52 days (usually there is a trendline-break every 35‒40 days).  The blue line connects the October and November lows; I think this is the “intermediate-cycle trend” which Toby Connor predicts will be broken soon (actually, he predicted that a week ago but it still hasn’t happened).

Note that FE03 through FE09 form an ”island top”. Last year, I found island tops were quite effective in predicting when the market would turn, but Thomas Bulkowski says that it is the *least* reliable pattern he knows!

Also note that IWM broke through its upper trendline around FE02 and has been in a ”bubble” ever since.  Some people say that the usual result after a bubble is that the stock will return to the price it had when the bubble started, which is now below the beige line.

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