Positive Sentiment

Hello!

Market sentiment has turned positive (technically) for me. I quantify sentiment by using STI market breadth data.

Popular market breadth indicators includes, new high new low, advance decline line, upside down side volume, McClellan summation index etc….

I find it a rather good and reliable forward looking indicator to gauge sentiment, or market condition….erm…. or trend .. 🙂

Of course this observation isn’t just a casual and visual observation…its backed by back testing on about 13yrs of data…through a couple of really bullish and bearish periods (1999 – 2012)

Appended is the visual representation of this year’s entries and exits. Managing to avoid the maddening market plunge in May/June period, thus preempting the so called “sell in May and go away” mantra….

Breadth05Dec

Trend trading isn’t about highly accurate trading records, and it comes with plenty of baggage…..whipsaws…

Thus risk management is extremely important.

More of this system and risk management ramblings later….

I have already emailed out to clients and those in email list (ya…same…more of this later…ok) our pseudo portfolio for this round….this year currently…we are up about 8-9%….average performance i would say…

I will not be presenting any trade able counters here publicly, due to “employment restrictions”…well not that Im a genius stock picker anyway…im more a .5 hitter… (Einhorn said trading is like poker…u keep folding and then go all in when u hit a good hand…and that can be 3hrs later… if I remember correctly, P.Brandt also mentioned with good risk management and trading with good probablilties…30% accuracy is good enough…)

Counter Date Entry Stop Units Capital Exit P & L 180
STI 3094.60 3037.96 3 9,835 (9,835) -100.0%

A good entry for me is at 3094.60 of the index…stopping out at 3037.96

So no entry until the index creeps up to this level….

Using a presumed 10k capital, and a risk of 1.8% or $180, we can buy only 3 units.

Wont be around for a 2-3weeks, so lets see how this trading window unfolds….

cheers and safe trading….

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