Is Void A Good Support? - August 19, 2011

[Billy]

Forum Clusters 110819.xlsx

The robot pages are automatically generated as soon as all the output computations by the robot engine are delivered. Today’s IWM robot page still shows the original robot outputs but is forced manually to stay in cash. Starting on Monday, we expect to have finished updating the robot engine with the new rules and the IWM robot page will be adapted accordingly.

The new rules are set as follows to initiate a new trade:

1. Buy when LT > -0.75% while ST > 1%
2. Short when LT < -2% or LT < -0.75% while ST < -2%
3. Stay neutral any other time

Today’s settings are LT edge = -0.41% and ST edge = +0.42%.
Therefore the new robot would also be staying in cash and not looking to enter any position.

From a multi-pivot perspective, all I can say today is that YS1 (64.40) is likely to be retested soon and should better hold as support, otherwise floor-level based algorithms are most likely to precipitate hard selling. Void (below 64.40) is normally not a very good long term support! If you absolutely want to play the very weak buy edge from the old robot, don’t pay more than the 1:3 RR pivots buy entry of 65.23. You’ll be on your own with your stop and risk management, so determine your comfort level before planning any trade.



The GDX is holding very well compared to the rest of the market and provides some action while the IWM robot is asleep. It has been trading between its 2 first support and resistance clusters all week long and the initial position remains in the green. A new entry today doesn’t offer any LT/ST edge, and I would wait until a strong signal is issued before adding to the initial position.
Billy