Forum Clusters 110706.xlsx

Both IWM and GDX buy signals settings are NEUTRAL for today.

The intraday 20-day Money flow closed slightly negative yesterday while the Russell 2000 index gained 0.19%. After trading ex-dividend, IWM closed pretty much flat for the day.
Note that backtests have found an additional edge by not adjusting the floor levels for dividends, hence the robot will change nothing to its limit and stop prices on ex-dividend days. The historical performance of the robot is also not taking into account the dividends, so they are all bonuses to the system.
So far, this is just a tight consolidation going on right in the middle between the two first resistance and support clusters. It is almost impossible to anticipate if YR1 (85.68) or WPP (82.59) – just below the day entry limit- will be tested first. The dilemma for market makers and their algorithms is that if the first resistance cluster (strength of 13) seems easier to break than the first support cluster (strength of 18), total selling pressure (13 + 13 =26) is still heavier than total buying pressure (18 + 5= 23) and the market is already clearly overbought in an illiquid summer order flow. Any bad surprise and news could quickly do much damage to long positions.
This “wait and see” attitude is reducing volatility and allows our trailing stop to rise even further closer to price.

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The long GDX robot position had a wonderful day and is now supported by a meaningful first support cluster compared to all of the last 8 trading days. Maybe this is the start of a new uptrend, but GDX must at least close above the 50-day moving average within the first resistance cluster to confirm that large players are likely positioning themselves in anticipation of a debt ceiling resolution. At the minimum, a close today above YPP (55.19) is required for avoiding an annihilation of yesterday’s progress. Billy

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