Tuesday, March 4, 2008

Short Entry Followup

We went short today on both the VLA System (hereafter called the VLE for short) and Cabot's Tides System (hereafter called the Tides for short) in the QQQQs at 42.41. Of course, as expected, the markets rallied off the late afternoon low to finish nearly flat on the day. I would not make too much of this as it is too early too anticipate a bottom, and we are not in the business of anticipating anything here, just following the market.

However, if the markets rally past the late February highs or rally for more than 3 to 5 days, a move to new rally highs would be likely. Therefore, it would be prudent to exit the Qs on any solid close above 44.53 regardless of the system status. This is how markets wear out otherwise disciplined traders. Just when they throw in the towel and start trying to find something else that works the market goes on a multi-month tear leaving the frustrated trader sitting in the dust. So no matter how many times we get whipsawed, we will keep on following the trading signals.

Note that the Monthly Price Bar trend is down and the weekly signal is on a sell. Only a close on volume with range expansion above last week's high of 44.53 will change this.

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