Robot Against The Crowd - January 19, 2012

The IWM robot entered its long awaited short position at 77.52 with an initial stop at 79.23. A secondary entry is advised today at a limit of 77.51.

It is always psychologically difficult to trade against the crowd and what looks now like a too obvious uptrend. The 20 DMF was very strong too, being 2.5 times stronger than a normal buy day and the IWM TEV extension was at record levels. Yet, these are exactly the kind of conditions necessary to mark a short term top and the robot is trying to take advantage of the favorable odds on the short side. As long as the 20 DMF remains in a neutral mode, we cannot expect a long term trend reversal, just a quick pullback and likely down to the confluence of 200 dma (75.88), WPP (75.91)and MR1 (75.90). Position size accordingly.

The first support cluster is rather weak today and can facilitate the start of a down move.
However, maximal opex pain for IWM’s put/call open interest is around 79 and market makers will try to push prices higher until Friday. If the stop is not hit, the position must be held because next week should then start with a selloff from extremely overbought conditions.

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GDX went nowhere yesterday, holding quietly at the bottom of its recent trading range. The strength ratio between the first support and first resistance cluster is slightly in favor of the bears but they don’t act aggressively so far. The GDX MF improved and closed 1.5 day away from a short signal. There’s no edge in initiating secondary positions currently.
Billy

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IF a significant short term top was made this AM, it will be useful to remember next time the RT 20DMF negative divergence within a short IWM setup.
Billy
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Billy, when we get a buy from a robot like we did yesterday when the robot entered, is there a place where users can see that the robot bought so that we could enter during the day? I realize that this would not always be advantageous. Today's IWM is a good example. There is a better entry today, but is there a way that I could have seen the entry yesterday?

[QUOTE=JoeLo;19938]Billy, when we get a buy from a robot like we did yesterday when the robot entered, is there a place where users can see that the robot bought so that we could enter during the day? I realize that this would not always be advantageous. Today's IWM is a good example. There is a better entry today, but is there a way that I could have seen the entry yesterday?[/QUOTE]

Joe,
The robot did not buy but shorted IWM yesterday. The entry was at the limit entry price that you should have entered for the day with your broker. The limit was 77.52 for the initial entry and 77.51 for a secondary entry today. The robot officially only trades initial positions.
You find these settings on the robot pages. The best way to know a trade was entered is to check if the limit price was hit (or exceeded). The best way not to miss a trade is to enter your limit orders prior to the open.
Billy

Thank you. I am trading the RWM so it was a buy for me, but of course you are right. The limit order is my answer. Thanks

Billy/Pascal,
Is the real time (beta) version of the mf indicator available to robot subs yet? I see the link under the robot page on the sidebar, but I do not have access. Just making sure I wasn't missing out
matt

[QUOTE=jmbarnette;19943]Billy/Pascal,
Is the real time (beta) version of the mf indicator available to robot subs yet? I see the link under the robot page on the sidebar, but I do not have access. Just making sure I wasn't missing out
matt[/QUOTE]

It is not stable yet to be released.
This is true for the messages that need to be checked again one by one.

For example, I just came back into the code to read what the message for GDX should be, and I noted that the short is not a "porosity level" below the average but below the zero line.
This means that the robot did not short yet, but the message stating -1 as number of days is wrong because the calculation formula for the message is wrong.

I believe that we will need until end of the Month to sort this out.
Maybe I should stop posting about this GDX Robot RT until the messages/alert system is fixed.


Pascal

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Pascal

I am always interested in seeing RT, even without all of the bugs worked out. From your experience, if I had Trade Station and the EV plugin could I see a close proximity to a RT chart?

please continue to inform us of the price/mf divergences as Billy shared earlier. I do not want my confusion to interfere with others here.
thanks
matt

Pascal,

In regards to the RT money flow, does your end of month timeframe also apply to the 20DMF signal as well?

[QUOTE=adam ali;19950]Pascal,

In regards to the RT money flow, does your end of month timeframe also apply to the 20DMF signal as well?[/QUOTE]

The GDX RT and the 20DMF RT will be available by Beg of February.
We still need to recheck-rework the message/alert system on the GDX RT and filter out the first few minutes of trading because of instability (some stocks did not start trading, separation volume is erratic, etc.)

Regarding the 20DMF, I do not know how I will produce a distance to signal calculation system, especially since the lower panel is very discretionary. The upper panel (the short signals) are easier to calculate.

I do not think that the messages/alert system will be available for the 20DMF together with the GDX RT messages.


Pascal