Lessee if the NDX can eke out a gain today.

Going to cash at EOD.

Thanks John,

"Draw Down" makes more sense. I was thinking "Due Diligence" but that of course did not fit the context.

Thus far today it looks like we "Partial Longs" make pick up some beer money. Too early to tell how to play tomorrow, but I am almost certain I will not be long.

Some TA pundits out there are targeting sub-600 on the SPX. Was reading the McLaren Report earlier today. Also AJ over on his thread does respectable work.

Of the group of indicators I look at, NYMO and NAMO are currently down in rebound land.

Hi John,

I use a 5 day moving average in Bull markets, with an entry threshold not as steep as with Bear entries.

I was never really successful in creating a mechanised method of determining if the current market is Bear or Bull, however.

That part of it is art/experience/feel: a combination of various indicators bottoming out, along with chart TA.

Once the market bottoms in the near future, I will toggle RAIM to "Bull" in order to make scalp trades.

What do you mean by "DD" ? I was trying to follow your post but couldn't figure that out.

For Bear Markets, I use a 10 day moving average of Up vs. Down Nasdaq Volume. Its a custom weighted moving average - 20% for the most recent date, 7% for the least recent, and spread out for the other 8 dates.

I set up a spreadsheet with some 20 years of data. You can set up the buy threshold in a cell where you can change it and experiment with different value to see your win-loss percentage and total return.

And you should set it up so you scale in your buys, vs all at once.

This way you can develop an approach which mirrors your level of comfort and tolerance for loss.

No literature, just did it on my own. But others have similar tools.

Yes, an Excel model.

<<I am not looking for a mid term bounce, just a one day oversold bounce. Not going in big time, just 30% non leveraged. I have only been able to make money with 1-2 day scalps since Oct. >>

Looks like you and I are on the same page for tomorrow.

But I think we're nearing an IT bottom - looks like the waterfall phase is just beginning kicking in though. I'd think another 10-15% decline

Not following your last post, Xiao.

Are you saying there is more down to come due to the lack of panic??

RAIM does in fact have a bear market long today, and we've got a 10-90 day.

Gut tells me that there's more down to come, but tomorrow my provide a breather. Or we may get a total collapse.

But I will be playing RAIM, switching to 33% long NDX

Hi Kanuti,

I will look at the RAIM model later today, it will possibly have a long entry.

Even so, we need to tread carefully, markets are in unsupported territory and I don't see how we're going to get out of this without the extreme readings that we saw in November.

Market drop has been rather orderly, the floodgates haven't opened yet.

Looks like I picked the wrong index to go short. More bang for buck in the SPX than NDX.

<<<..based upon your claimed return ( I'm not questioning your return.....good for you)>>>

Back in the day, the regulars on this board would post their trades in advance and regularly update returns.

Since I "returned" in November, I believe I've posted all my trades, along with the size of the trades.

I find that by posting trades on a public forum, along with the rationale, I am less likely to stray from my methodology or board members will call me out for public flogging purposes LOL!

I recall Steve saying about the same thing.

For the record, 25% short NDX to last until imminent bottom.

Either that or a strong reversal blows it out.

May re-establish a modest short position today. RAIM is structured so that the base position in bear markets is a short; I only go long during significant oversold periods.

However I am not entirely comfortably with short-side trading and typically refrain from doing so unless indicators are redlining on the OB side.

Will see how the close shapes up.

Good point Choad.

Do you think the key bottoming indicators will exceed what we saw in November??

VIX at 80
NYMO at -120 (well we were there on Monday)

I have a custom NASDAQ volume OB-OS indicator that registered -70 back in November. Only go to -30 thus far, leading me to believe there is more to come.

And of course a slew of "10-90" days.

Wew can't seem to get any kind of upward traction at all!

Yesterdays up move was reflexive, based off of really steep OS conditions.

Things are really going to get ugly when we start the bottoming process . . .

I explained the critical mechanisms of RAIM to Xiaoshitau a few weeks back

With MS Excel and historical data on Nasdaq Internals, you should be able to work up a similar model for backtesting and future real time use.

Thx Kanuti,

I didn't score a big payday by any means, close to 1.5%.

However I'm now up 61.6% since Nov 20th "lows" - that date of course no longer represents the SP500 low mark, but its my benchmark since thats when I started calculating returns.

Hope yer avoiding the big selloffs . . .

Lots of technical support levels were breached last week and Monday. We'll be heading down to make new lows over the next month or two. But after that there could be several months of bull mkt.

Markets could continue up for another day or two, but RAIM says the long scalp trade is over, so I'm returning to a cash position. Looking at a ~1% port gain at this point.

Further upside and I will get short.

NYMO at -117. Thats an epic oversold level.

Going long 30%

There is absolutely no good news, technicals are breached all over. All we need is a close on the lows to complete the package.

Hi Maine,

Currently in cash.

But RAIM, my OB-OS model, has a Bear market long signal for tomorrow. Currently 30%.

I may split this one SPX and NDX, since SPX has really been getting pounded . . .

If SPX cracks this 750 area look out below . . .

Notice CNBC's Rick Santelli is making big news for an on air rant against Obama's housing bailout plan.

I heard it, but didn't think is was unusual for CNBC. Cramer, Kudlow, the chubby guy in the morning (Mark something) - they're always spouting off.

Following the big downer on Tuesday, we've had two days of sideways action (assuming today continues as such) which is mitigating the OB condition. If we could somehow finish green today, I will look at re-establishing a short position for the presumed next leg down.

Hi Xiao,

I canceled the trade prior to close. Despite the heavy point drop, we're still a little ways away from a RAIM Bear market buy point. Echoing Kanuti, more selling tomorrow could produce an entry.

Was initially looking for a close on the lows for a quick 1-day in and out.

33% long NDX for manana. Looking for a bounce and maybe gap fill.

(Edit: now were having a big rebound, may remove long)

Puzzled as to the Nasdaq Internals.

The NYSE is having a "90/10" day, as you would expect with such carnage.

But the NASDAQ is running a 27 up - 73 down ratio in regarding to volume. Can't figure out why so "strong". There are a few Sten Cell companies contributing to the up volume, but this certainly doesn't appear to be that much of a factor.

Not much going on from my end. Entered the market only once this week, a profitable one day in-and-out on a short trade.

My port is up 59.6% since the Nov 20th low. This vs. the benchmark SP500 which is up 9.95% since that date.

Gold is breaking out. Obviously the govt's money printing "stimulus" program is helping it along.

Its an indicator that I created and calculate daily (well lately I sometimes don't update daily).

However it is not so difficult in concept that others do not use similar tools.

A ratio of Nasdaq Up volume vs Down volume. 5 day weighted moving average. Most recent days get the highest weighting.

When it gets above or below key thresholds, the idea is to average into positions, as opposed to going all in at once.

Not arguing with you about Bush dropping the ball. When one party controls all three houses, the American public gets screwed!

Right now its children loose in a candy store.

Listening to President Snowjoba yesterday, I felt I was in the twilight zone waking up in the Soviet Union. It is frightening how quickly the US is transforming into a socialist state.

Sigh!

Moving the short position to cash. Although tomorrow may bring a dead-cat, I will prefer to await a RAIM long.

Hey Steve,

My OB-OS model was at an extreme on Friday. Yesterday, although the NDX was up, the reading abated a little.

If we stay down into the close, will flip long for tomorrow.

Going short 25%. A big move into the close could change that.

NASDAQ OB-OS wayyy OB - Needs a refreshing pause.

Congrats on the massive gains Steve-O. Can't argue with a 19-percenter

Haven't updated RAIM in a few weeks. but upon doing so disovered an extreme OB reading today.

Too late to take a short position though. Should Monday move up, I will be sure and get the shorts on.

How's your port doing these past few days Steve?

Obviously I am missing out. Yeah it looks like the bear market rallying is finally getting a second breath.

I will look to the RAIM model to enter scalp trades on pullbacks, as in December.

Kind of lost right now with market direction HK, so I haven't been committing big bucks. Which is too bad since I've had some success. Just playing OS and OB conditions.

Whats your line of thinking regarding near future market movement?

NDX/NAS has certainly been outperforming this week, while SP500/Dow wallow in self-pity

BTW I took the money and ran yesterday - currently in cash . .

Hey Steve,

I was mentioning last week that the Bear market rally off the November lows may not even have begun yet. What we've seen since then may be more like backing and filling.

Not really sure what to do today, so I will stay put at 25% long. The 2% gap down at the open and recovery may portend a few days of upside.

My "don't add on up days" rule leaves me with few options.