GDX Robot entry question

[sesorensen]

I have a few issues re GDX Robot.

As of 20 May 2011 the GDX Robot advocates for a RELATIVE STRONG BUY with LT strong positive edge (2.4%) but with a ST very weak positive edge (0.93%) leading to a statistical 3D LOSS and only 45.8% of cases positive after three days. In a previous forum note Billy states that the best bias should be +3% for buy trades and 3% for sell trades.

Q1: Is it possible to have an overview of a full spectrum of negative/positive edges both for LT and ST and an explanation/definition of different levels of edges, and what they may indicate for our trading? If it is explained in the Trading GDX report (pdf) from 8 May 2011 I am not able to read it correctly.

I noticed that Friday (20 May) there was a massive influx of Large Players intraday which turn around and ended at almost same MF level as for the day’s start. The price went up concurrently intraday by almost 1.5% - yet ended in only +0.25%.

Q2: What could be an explanation for such a relative dramatic in-and-out move?

Best
Sorensen

[Billy]

I have a few issues re GDX Robot.

As of 20 May 2011 the GDX Robot advocates for a RELATIVE STRONG BUY with LT strong positive edge (2.4%) but with a ST very weak positive edge (0.93%) leading to a statistical 3D LOSS and only 45.8% of cases positive after three days. In a previous forum note Billy states that the best bias should be +3% for buy trades and 3% for sell trades.

Q1: Is it possible to have an overview of a full spectrum of negative/positive edges both for LT and ST and an explanation/definition of different levels of edges, and what they may indicate for our trading? If it is explained in the Trading GDX report (pdf) from 8 May 2011 I am not able to read it correctly.

I noticed that Friday (20 May) there was a massive influx of Large Players intraday which turn around and ended at almost same MF level as for the day’s start. The price went up concurrently intraday by almost 1.5% - yet ended in only +0.25%.

Q2: What could be an explanation for such a relative dramatic in-and-out move?

Best
Sorensen

Sorensen,
The answer to your first question is in the GDX Report on pages 21 and 22. http://www.effectivevolume.eu/conten...rading_GDX.pdf
In the past 44 months, the Robot found 42 strong buy/short signals, (over the threshold of 3% bias)
with an average return of about 6% per trade that on average lasted 9 trading days. These are times of great low-risk opportunities. The current 10D bias of 2.4% is "relatively" strong for the 10D horizon, but the 3D weak bias (0.93%) tells you not to expect miracles in the very short term. On a side note, GDX is holding just above its yearly pivot - or equilibrium- price, but is pressured down by the 200-day moving average, so I would not be surprised if we see some more consolidation before a retest and potential victory over the 200 dma.

For your second question, Pascal is much better qualified than me. But I have learned long ago never to draw any conclusion from strange behaviors on opex days.

Billy

[Pascal]

I have a few issues re GDX Robot.

As of 20 May 2011 the GDX Robot advocates for a RELATIVE STRONG BUY with LT strong positive edge (2.4%) but with a ST very weak positive edge (0.93%) leading to a statistical 3D LOSS and only 45.8% of cases positive after three days. In a previous forum note Billy states that the best bias should be +3% for buy trades and 3% for sell trades.

Q1: Is it possible to have an overview of a full spectrum of negative/positive edges both for LT and ST and an explanation/definition of different levels of edges, and what they may indicate for our trading? If it is explained in the Trading GDX report (pdf) from 8 May 2011 I am not able to read it correctly.

I noticed that Friday (20 May) there was a massive influx of Large Players intraday which turn around and ended at almost same MF level as for the day’s start. The price went up concurrently intraday by almost 1.5% - yet ended in only +0.25%.

Q2: What could be an explanation for such a relative dramatic in-and-out move?

Best
Sorensen

Thanks for this question. I saw that Billy already responded.

I inserted a new table that shows how the LT/ST combination works for GDX.

I will do the same for the IWM Robot.


Pascal