GDX Robot Reverses To A Long Position - March 26, 2012

The EOD GDX robot will cover its short position and buy a new long position at the open today. The initial stop for the long position will be set 5.65% below the entry price. Another protection is active if the Money Flow closes the day below the average MF (currently -0.47%) minus porosity (-0.089%).

The RT GDX model has already reached another protective stage since the buy-from-oversold signal on 3/14. This protection is triggered because the Money Flow traded over the 0% + porosity (0.089%) intraday last Friday. A short trade would be initiated if it drops below the 0% line minus porosity (-0.089%) intraday this Monday.

After a trend day like Friday, we expect the most frequent occurrence of a range day (bounded by Daily R1 and S1) the following trading day. This expectation would be negated if GDX trades above Daily R1 (50.27) or below Daily S1 (49.04).

Among the technical signs of bullishness we will notice that GDX closed just above Friday’s VWAP (49.71), 5-day VWAP (49.60) and the new Weekly pivot (49.57), The support clusters are building strength and are overpowering the resistance clusters by a total strength ratio of 13:10.
The IWM robot is still in cash.
Billy

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[QUOTE=Billy;21489]The EOD GDX robot will cover its short position and buy a new long position at the open today. The initial stop for the long position will be set 5.65% below the entry price. Another protection is active if the Money Flow closes the day below the average MF (currently -0.47%) minus porosity (-0.089%).

The RT GDX model has already reached another protective stage since the buy-from-oversold signal on 3/14. This protection is triggered because the Money Flow traded over the 0% + porosity (0.089%) intraday last Friday. A short trade would be initiated if it drops below the 0% line minus porosity (-0.089%) intraday this Monday.

After a trend day like Friday, we expect the most frequent occurrence of a range day (bounded by Daily R1 and S1) the following trading day. This expectation would be negated if GDX trades above Daily R1 (50.27) or below Daily S1 (49.04).

Among the technical signs of bullishness we will notice that GDX closed just above Friday’s VWAP (49.71), 5-day VWAP (49.60) and the new Weekly pivot (49.57), The support clusters are building strength and are overpowering the resistance clusters by a total strength ratio of 13:10.
The IWM robot is still in cash.
Billy

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Billy,

The RT short dignal has just tripped has it not ?

Trev

It strikes me the porosity level should not only be adjusted for volatility, it should be adjusted for gaps. To me it's normal with the gap up, it would be sold off slightly. Had we gapped down this morning I bet we wouldn't have seen the MF go below zero. IMHO

Dave

[QUOTE=manucastle;21500]Billy,

The RT short dignal has just tripped has it not ?

Trev[/QUOTE]

Yes, the RT model is now officially short.
David, about gap adjustments for porosity, how would you do it?
Billy

[QUOTE=davidallison@shaw.ca;21501]It strikes me the porosity level should not only be adjusted for volatility, it should be adjusted for gaps. To me it's normal with the gap up, it would be sold off slightly. Had we gapped down this morning I bet we wouldn't have seen the MF go below zero. IMHO

Dave[/QUOTE]

This indeed could be an inde for further improvements.
As of now, the GDX RT has turned to a short position and will revert to a long if/when we revert above the + porosity level.

I will post the trades track record in a few minutes.



Pascal

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[QUOTE=Pascal;21503]This indeed could be an inde for further improvements.
As of now, the GDX RT has turned to a short position and will revert to a long if/when we revert above the + porosity level.

I will post the trades track record in a few minutes.



Pascal

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The EOD and RT trades are attached.

Pascal

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Billy,

I really don’t know what I’m talking about, it’s just an idea. Very simply for the RT system only, the larger the gap, just increase the porosity level incrementally. If price had opened flat today, use .089%. If price gaps a certain percent, just increase porosity levels a certain percent, for that day only. Porosity levels are based on past volatility but it seems to me gaps are an increase in intra day volatility, so increase the level for the day, if we gap. Or increase the lower porosity level for gap ups, and decrease the upper porosity level for gap downs. I didn’t expect MF to get to -0.27, but I did expect price to fall off from open, as most of the white candles have tails from gap ups. I was wondering how MF would react. It will be interesting to see if that was the low MF for the day.

Dave

[QUOTE=davidallison@shaw.ca;21507]Billy,

I really don’t know what I’m talking about, it’s just an idea. Very simply for the RT system only, the larger the gap, just increase the porosity level incrementally. If price had opened flat today, use .089%. If price gaps a certain percent, just increase porosity levels a certain percent, for that day only. Porosity levels are based on past volatility but it seems to me gaps are an increase in intra day volatility, so increase the level for the day, if we gap. Or increase the lower porosity level for gap ups, and decrease the upper porosity level for gap downs. I didn’t expect MF to get to -0.27, but I did expect price to fall off from open, as most of the white candles have tails from gap ups. I was wondering how MF would react. It will be interesting to see if that was the low MF for the day.

Dave[/QUOTE]

Dave, these are very constructive logical observations and we'll take them into account for further improvements.
As you know, we are all discovering the RT tools. It is incredible how fast Pascal has already made the RT model effective. And I won't even talk yet about even better advances that are in the pipeline.
That's what's so exciting about the EV website adventure: continuous interaction with the users make all this a collective work in progress for approaching perfection!
Billy

[QUOTE=davidallison@shaw.ca;21507]Billy,

I really don’t know what I’m talking about, it’s just an idea. Very simply for the RT system only, the larger the gap, just increase the porosity level incrementally. If price had opened flat today, use .089%. If price gaps a certain percent, just increase porosity levels a certain percent, for that day only. Porosity levels are based on past volatility but it seems to me gaps are an increase in intra day volatility, so increase the level for the day, if we gap. Or increase the lower porosity level for gap ups, and decrease the upper porosity level for gap downs. I didn’t expect MF to get to -0.27, but I did expect price to fall off from open, as most of the white candles have tails from gap ups. I was wondering how MF would react. It will be interesting to see if that was the low MF for the day.

Dave[/QUOTE]

Looks interesting! I'll think about this.


Pascal

Is the message on the RT view intended to be updated in real time? Or is it for the status of the EOD system?

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[QUOTE=senco;21512]Is the message on the RT view intended to be updated in real time? Or is it for the status of the EOD system?

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Yes, Pascal forced the messages into EOD mode for beta testing.
Normally, after the beta period, there will be no ambiguities like now.
Billy

Pascal,

Thank you for posting the trades. Looking at the track record for the RT system, it makes one a little nervous being aggressively long. Had we not spent that brief moment on Friday above +0.10% the RT stop would be Average MF minus porosity, and RT would still be long, correct?

Thank you for being so generous with your time.

Dave

[QUOTE=davidallison@shaw.ca;21515]Pascal,

Thank you for posting the trades. Looking at the track record for the RT system, it makes one a little nervous being aggressively long. Had we not spent that brief moment on Friday above +0.10% the RT stop would be Average MF minus porosity, and RT would still be long, correct?

Thank you for being so generous with your time.

Dave[/QUOTE]

Yes Dave, you are right. FYI, both Pascal and I are still long and trading the EOD signals. If this is a major bottom in formation as everything is suggesting, it's better to be flexible and give less weight to intraday zigs and zags.
Billy

Thanks Billy, Will this make you smile? [url]http://www.wimp.com/dadipad/[/url]

[QUOTE=davidallison@shaw.ca;21518]Thanks Billy, Will this make you smile? [url]http://www.wimp.com/dadipad/[/url][/QUOTE]

Very funny! So let's put our RT model in the dishwasher for a change!
Billy

[QUOTE=Billy;21516]Yes Dave, you are right. FYI, both Pascal and I are still long and trading the EOD signals. If this is a major bottom in formation as everything is suggesting, it's better to be flexible and give less weight to intraday zigs and zags.
Billy[/QUOTE]

I am indeed still long because I am looking at the RT system in the context of a back-tested EOD system.
The RT system can have many "jumps" as we all have noted and lead to whipsaws.

What is clear to me is that there is another protection level below the average. This will be triggered for the EOD.
As of now (Today,) even if gold is attractive, we cannot witness money moving back into gold miners. That could be an issue, but I know that the trade is protected by a short/Sell signal just below the average. So I'll keep the position for now.

Also, note that unless otherwise stated, the messages are related to the EOD position. The reason for this is that the GDX Robot relies on the GDX MF for its signal and hence the system tunes to the EOD situation. For us to see the RT signal, we'd have to force feed it with the RT position.


Pascal

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