AI
Tuesday, March 13, 2012 12:09:09 PM
Got a SR60AT sell signal y at 12 at 81.33 and then it reversed this morning at 11 at 81.95. This now appears to have been a false signal that generated a -.75% loss.
The good news is that I only used the signal to pull back from 150% to 100%, so overall I still did ok.
Looking back at the events of the last week, what happened y should not have been a surprise. Last Tues we saw a huge -2% drop in the market. Then it rebounded Wed-Fri for .94%, 1.31%, and 1.37%. Y the market pulled back a modest -.22%. Surprised, should not have been. SR60AT over reacted to the situation.
Over the course of the last 9 months we have seen the VIX spike up and now move to very low levels. I when back in history and just did an eyeball average for the VIX each month to compare to the SR60AT returns. Guess what, really good coorelation.
So I have three charts I can use for 60min trading.
1. SR60 anytime - over reacts during low VIX like y, but was
extremely successful last fall when VIX was over 30.
2. SR60 10am - did not siganl a sell y
3. Slow 60 - appears to be a great chart to be used during very low VIX.
So going forward I am going to be looking to use SR60AT for VIX>30 and Slow 60 for VIX<20 in general. However I may still use some combination. But for the present, with VIX under 20, I will no longer use SR60 AT.
The good news is that I only used the signal to pull back from 150% to 100%, so overall I still did ok.
Looking back at the events of the last week, what happened y should not have been a surprise. Last Tues we saw a huge -2% drop in the market. Then it rebounded Wed-Fri for .94%, 1.31%, and 1.37%. Y the market pulled back a modest -.22%. Surprised, should not have been. SR60AT over reacted to the situation.
Over the course of the last 9 months we have seen the VIX spike up and now move to very low levels. I when back in history and just did an eyeball average for the VIX each month to compare to the SR60AT returns. Guess what, really good coorelation.
So I have three charts I can use for 60min trading.
1. SR60 anytime - over reacts during low VIX like y, but was
extremely successful last fall when VIX was over 30.
2. SR60 10am - did not siganl a sell y
3. Slow 60 - appears to be a great chart to be used during very low VIX.
So going forward I am going to be looking to use SR60AT for VIX>30 and Slow 60 for VIX<20 in general. However I may still use some combination. But for the present, with VIX under 20, I will no longer use SR60 AT.
Trade the Charts and not the Heart - Expect the trend to continue until it doesn't.
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