SG’s Score Card 8/23/2009 – 10/9/2009
(Lowry’s Data now updated)
Pre-Blog Stuff:
I became aware of the SG in late July/early August of 2009. By accident, I was using off the shelf oscillators and indicators in ways they’re not intended to be used and I saw something odd. At first I didn’t know what to make of the SG, didn’t know if what I was seeing was of any use or was valid in any way. Eventually I began to back test these indicators and realized they had potential.
During the week of August 17th, I made known in a post on OBG’s blog that I had come up with the Buy/Sell Signal Generator and that it was confirming a ‘sell’ signal at that time. Later in that week, the most sensitive ‘A Indicator’ began showing weakness in downside momentum which I interpreted at the time as the beginning stages of a new ‘buy’ signal. The market had already had a pretty good bounce by that time, which was August 20th, but based on the signal the SG was giving I decided to go long late in the day of August 21st, 2009.
Over the weekend of August 22nd/23rd, I began putting this blog together as a way to chronicle the signals from the Buy/Sell Signal Generator. I wanted to make the information the SG was giving available to the public so that visitors could audit the site and see for themselves if these signals were of any value. Based on the number of hits this site receives on a daily basis I know that most of the original visitor base sees the SG as nothing more than voodoo bunk as the vast majority of original visitors came only once or twice and have not returned. However, also based on the number of daily hits, I know that there is a small group of visitors who come here each day and who have found value in the information that the SG provides.
August 23rd, Incept Date:
The first post I put up is dated August 21st but posted on August 23rd. In that post I mentioned that I had gone long based on up ticks in the SG.
August 27th:
I posted that, based on down ticks in the SG and the fact that my long position finally went nicely green, that I sold to lock in gains. Also on this date I mention the E Indicator which is only useful at certain times. I mentioned that it was positioned very similarly to the way it was positioned during the February 2009 sell-off.
August 29th, a Saturday:
Based on weakness in the SG and especially the E Indicator, I began to warn of a possible sell-off and also said the sell-off should start no later than Tuesday, September 1st if a sell-off was going to occur at all.
August 31st:
The $SPX lost 8pts. The SG indicated that downside momentum was increasing. I warned again about the E Indicator and mentioned that in back testing when the E Indicator was positioned as it was at the time that dramatic moves followed. I also mentioned that, based on back testing, these dramatic moves were mostly to the down side.
Later that evening I went through a litany of indexes and basically warned against shorting as the market might meander about for a few days before revealing itself. Okay, so I got this part wrong. LOL.
September 1st:
$SPX drops 22pts. I posted intra-day that I was in awe, that the SG had warned of a dramatic move and that the move would probably be to the downside. Too bad I didn’t fully understand the E Indicator at the time so I wasn’t able to take advantage of the plunge. But at least I wasn’t long, either.
September 3rd:
I exit a small short position I had based on the $VIX having punched through the upper Bollinger Bands for three days and having closed outside of those BB’s on two of those occasions. Turns out using the SG along with the $VIX and BB’s works very well.
September 6th, Sunday:
I posted that I expected up ticks in several indicators for Tuesday, September 8th, the day after Labor Day. The $SPX had already rallied 22pts by then.
September 8th:
Had up ticks in all indicators and I warned shorts or anyone who was thinking of going short to rethink their strategies.
September 18th:
$SPX had moved 78pts from the September 2nd low. I was seeing a loss of momentum in the SG and I warned longs to consider hedging against a possible pull back. There were other warning signs as well, including a series of small dogi/spinning top candles similar to those that appeared before the 6/15 sell-off.
September 21st:
The SG continues to reveal a loss of market momentum even as the market continues to climb. I once again caution longs to consider hedging positions just to be safe.
September 22nd:
Based on up ticks in the key A Indicator, I said that hedging might not be necessary after all. I also mentioned that shorting wasn’t yet appropriate.
September 23rd:
$SPX drops 6pts. There are down ticks in 3 of 4 indicators for the $SPX. No down ticks for the $COMPQ. I say in the post that I had warned around 9/17 that no new long positions should be taken. I can’t find that information in the post for 9/17 or the posts before 9/17. Just pointing out this inconsistency.
I mention my concern over further down side especially the fact that the Transportation Index came under intense distribution with its highest volume day since July of 2008. I also warn about shorting while the market is above short term MA’s and without a confirming down side move.
September 24th:
$SPX drops 15pts. After the close, RIMM reports horrible earnings. I mention that I’ve put on a small short position. The SG for the $SPX has down ticks in three indicators but the SG in the $COMPQ has down ticks in all four indicators.
September 25th:
Down ticks in all indicators for both SG’s. I post a long list of sectors that had closed below their 20MA’s and say that a bounce on Monday, September 28th, was a strong possibility.
September 28th:
$SPX gains 18pts. I mention that I closed my short position in the AH session and was looking to get in on the long side the following day. There are still down ticks in all the indicators for each of the SG’s.
September 29th:
$SPX loses 2pts. The SG says it’s a lot worse than it appears and I warn again that longs might want to consider hedging.
September 30th:
$SPX loses 3pts. In a short post, I warn that downside momentum continues to build.
October 1st:
$SPX loses 28pts. Down ticks continue in all indicators. I mention that the $VIX had closed outside its upper BB and hint that a bounce might soon be in the works. I also post that I’m considering that the $SPX is in a bull flag formation and that I think that the down side will continue for as long as two weeks.
October 2nd:
$SPX loses 4pts. I see in the ‘A Indicator’ for the SG on the $SPX what I believe to be a climax signal. I then mention that the $VIX has closed way outside its upper Bollinger Band and say that I expect a bounce come Monday, October 5th. I place an order to get out of a short position I’m was holding at the time but failed to get out in the AH by one cent.
October 5th:
$SPX gains 15pts. I take advantage of early morning weakness to get out of my short position at BE, less the commission, and go long TNA simply based on the climax signal from Friday, October 2nd. Meanwhile, the SG produces down ticks in all indicators.
October 10th, Saturday:
Climax signal from October 2nd proves to be 100% accurate in signaling the end of that particular pull back. Through the course of the week, the $SPX blows through the upper bear flag (meant bull flag) resistance line, negates the ABC down structure, and adds about 36pts. Several of the indicators for the SG’s on the $SPX and the $COMPQ are moving up but the move is not impressive. As a result I remain bullish but very cautious.
I know tons of people who want to go short or are already short expecting some kind of major drop based on what I’m not sure and while the SG is hinting that adding new long positions right here might be risky or unwise it is in no way indicating that going short is appropriate. This could change Monday or any time after that but for the moment the SG says that being long is less risky than being short.
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In summary, in it’s short lifetime the SG has produced two very amazing calls, the call for a dramatic move that began to form in late August and the recent climax call from October 2nd, as well as several good calls. All in all, the SG does a good job of sensing when weakness turns to strength and when strength begins to turn to weakness. It works very well with the $VIX and helps to warn of potential turns in the market a few days before those turns occur which allows one the opportunity to get positioned in advance. However, as I have mentioned previously, the trend takes precedent and there are going to be times in the future where the SG is going to warn of a potential market turn but where those turns either don’t materialize at all or where those turns fizzle after a few days or points. Since the market is now in a major uptrend, the moves that fizzle are going to be the ones to the down side. Except during the mid-June to mid-July sell off, this has been the case and will most likely be the case at least in the near term.
So far I’m very impressed with the SG and I hope the SG is helping you in your trades in some little way. As long as the SG proves to be useful, I will continue to update this blog regularly.
Everything that I’ve just posted can be verified by looking through the site archives. Any editing I’ve done on any of the posts is so noted. No original post has ever been changed and any editing that I’ve done has been done as an addition.
Thank you, again, for helping keep this site semi-private.
