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CGTS Algo Trading System

byMichael Clark

LatestGetting Started



Dec. 11, 2018 12:18 AM ET•Comment!

I am starting this Sunday night -- and futures are down across the board.

We are focusing our our simplest system. But we are gloaming with other systems in hand. HYBRID ALT ALT ALT just might be our best system. It works with COUNT1 SPIN and PROP2.5 SPIN -- that's it. It is not complicated in the least.

Where spin1 is COUNT1 SPIN and SPIN2 is PROP2.5 SPIN. And SPINY2 is PROP2.5 SPIN Yesterday.

In both systems, 1 is BUY. In COUNT1, 2 is a TRADING SELL. In PROP2.5, 0 is a TRADING SELL. The idea is that both systems must be 1 to BUY. And both must be TRADING SELLS to sell.

As you can see, COUNT1 SPIN and PROP2.5 often mirror each other -- but not always. COUNT1 gave a TRADING SELL signal in early 2018, which PROP2.5 did not mirror -- so no SELL. (We include PROP1 in the chart; but it is not necessary.

In 2015, there were a series of starts and stops that were not in agreement with these two systems. No trade resulted. Note, AAPL is correcting; but PROP2.5 is not. This is a good time.

When we trade the SHORT SIDE, we need COUNT1 SPIN =3 and PROP2.5 SPIN =3; a COVER SHORT signal requires COUNT1=4 and PROP2.5 = 0.

It is a notable system.

Here is a SHORT SIGNAL today for HCLP, and for DUST.

UDOW is a BUY, still, in this system.

If we look at a longer view we will see a generally very productive system.

Three sell signals in agreement, late 2015, early 2018, and late 2018. Two COUNT1 SELL SIGNALS not in agreement, as the price dipped and kept surging.

Look how HD, HOME DEPOT, ignores a flurry of COUNT1 SELL SIGNALS.

You will note that the COUNT1 Sell Signals accompany a dip in prices -- but they do not end the trade. HYBRID ALT ALT ALT is a true long-term trading system.

HON, HONEYWELL, is similar.

AMAT shows an opposite situation, a collapse of trend and a SHORT PICTURE.

RVNC just ended a SHORT TRADE.

A lot of COUNT1 COVERS (=4) not seconded by Prop2.5 SPIN. Finally, one was.

We have established the six systems we want to work with this year. We tested many of them, with the idea of selecting our six best systems.

COUNT1 SPIN returned the most accumulatively; and the least per trade. HYBRID ALT ALT and HYBID ALT ALT ALT ranked second and third in all the tests, which traded EA, ELECTRONIC ARTS. You will notice that many old systems, like Count1 M5AB PURIST, for instance, did not make the cut.

COUNT1 SPIN seems to be our best short-term trading system; and HYBRID ALT ALT.ALT seems to be our best long-term trading system.


Ok; today's trading was not as grim as the news suggested it would be. Stocks opened lower, and spent the day regaining those losses.

NIKKEI was down; FTSE was down; Dollar was up; VIX was up and then down.

THE BAD NEWS is that ^VIX is a new BUY SIGNAL on both our HYBRID ALT ALT and our HYBRID ALT ALT ALT Systems.

How well do our SIX SYSTEMS trade ^VIX. HYB ALT ALT trades @ 88.8% accuracy. HYB ALT ALT ALT trades slightly better at 90%.

Both are saying stocks are going down, VIX is going up.

HYT AA says FNGU is also a new SHORTSALE.

You will notice we have today's HYB AA reading on the left and HYB AAA reading on the reader's right. There are a LOT OF NEW SHORTSALE SIGNALS for HYB AAA. FINU, BOM, DPST, RETL, SIG, SWKS, TNA, URTY. This looks quite bearish for the markets.

Has the FED lost control of the market? It is starting to appear that way.

When we look at the COUNT1 WEEKLY CHANGE Report the picture echoes the darkness of the HYBRID reports. First the Bullish Part of the Report.

In fact, ALL of our "BULLISH" COUNT1 CHANGES for the WEEK are bearishg for stocks.

And there are 39 new SHORTSALE SIGNALS for the Week, Count1 Spin. Here is the complete list.

FNGU, FANG STOCKS Bullish ETF, is a NEW SHORT SIGNAL. MIDU, which we were LONG last week, is now a SHORTSALE SIGNAL.

This is disturbing to the BULL PERSPECTIVE. I don't remember such a lengthly COUNT1 CHANGE LIST in the past. 80 changes in all. And none of them traditionally bullish. Of course, we are still able to make money in the BEAR MARKET. We emphasize our SHORT POSITIONS. We know the FED will be trying to manage the markets in the bullish direction, as much as possible.

On June 21, 2001, the DOW was at 10650, approximately. Today it traded at 24,423. It would take about a 58% decline for the DJI to return to its 2001 level. I have argued that the entire anti-deflation scan engineered by Ben Bernanke was just a delaying tactic. If so, should the Dow return to its 2001 level 18 years later, this would be consistent with the returns from 1929-1947 and 1965-1983, the two previous Night-Cycles or Deflation Seasons that we had to endure earlier this century.

1929 DJIA @ 331.65 - 1947 DJIA @ 175.66: EGO DEFLATION CYCLE: Negative 47% : -3% per year.

1965 DJIA @ 854.36 - 1983 DJIA @ 1045.07: EGO DEFLATION CYCLE: Positive 22%: +1% per year.

2001** DJIA @ 11,000+ - 2019:

That is a very dark picture, I understand. Perhaps I should leave it at that for tonight.

MJC, CGTS Machine Trading

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.