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Long/Short Equity, Special Situations, Currencies

Contributor Since 2009

Michael J. Clark was born and raised in Sinclair, Wyoming. He is a poet, novelist, artist, historian, and market analyst. He began investing in 1985. He read ˜The Technical Analysis of Stock Trends" by Edwards and Magee and was hooked. From 1985-1987 he made astonishing gains in the stock market; and then stocks collapsed in 1987. Since then he has been attempting to 'solve the stock market', with many failures and some successes. The system he developed, called CGTS, Clark's Gate Timining System, is algorithm-based. What this fancy word means is that he proposes a series of necessary steps based on technical analysis propositions, which, when met, trigger trading signals. His four main trading systems are up a combined 31% for 2015. From his website: INVESTMENT PHILOSOPHY Now that QE is supposedly ending, markets are already becoming more tradable, with opportunities to make money on both long and short trades at the same time. QE tended to make all boats rise, except precious metals. This made it more difficult to play the short side of the markets. Now, both sides seem to be more accessible to successful trades. This will also be more of a challenge for investors. The FED will have to eventually abandon the markets to their own destinies, and stop spending trillions to protect investors AND corporations from their mistakes. As this begins to happen (I am not sure it has happened yet), informed advice will become even more necessary for investors. Rules of Investment Rule #1: Never go against the trend. The majority is often wrong; but the minority is often wrong also. The sticky issue with this advice is at transition points, at which a Bull Market turns into a Bear Market or vice-versa. Big Money often anticipates and/or causes this transition. So pay attention to what Big Money is really doing, not what they say they are doing. Rule #2: You don’t need a broker who makes his living off of your money. Most brokerage firms buy a position in a stock quietly and slowly. When the stock has appreciated significantly they add the stock to their buy recommendations. Then they begin selling their position while they are encouraging their clients to buy the stock. Most firms never issue sell recommendations. If they do, beware: they are probably trying to buy your stock after a huge sell-off. Rule #3: Watch your own emotions because they are often signaling something. When fear turns to greed and visions of unlimited wealth, we are probably near a top in a trade and we should get ready to sell. When hope and denial turn to fear and visions of an unlimited loss, we are probably approaching a bottom in a trade. (See Rule #1 however.) Rule #4: Trade with a system to complement your gut reactions. Follow the system no matter what, even if it means taking a loss. Don’t get lazy with your money and sink into denial. Use a system to help you refrain from 'playing a hunch'. Rule #5: HEDGE YOUR PORTFOLIO AGAINST LOSSES. How does one do this? By having a balanced portfolio of long and short positions. But have a system that signals both long and short positions, and keep your portfolio balanced around 50% long and 50% short. This may seem to contradict Rule #1. It does not. When something is in a long trend, something else is in a short trend. Find what is long and what is short. If stocks are long, gold or oil may be short. Use ETFs and options to help establish this portfolio balance. Our system gives trading signals every day for both long and short positions. More information on CGTS is available at: His fine arts portfolio can be found at the following address: His writing portfolio can be found at: Those interested in his book "Turn Out the Lights", a description of the metaphysical causes of the 2008 financial meltdown, can access the draft at: Michael Clark has retired after working 30 years in academia, relocated to Hanoi, Vietnam for six years, and has returned to America in 2014.


CGTS Algo Trading System

byMichael Clark

LatestGetting Started



Jan. 3, 2019 8:31 PM ET•GUSH, LABU, DRIPComment!

MJC THE SELLING we predicted came today, right on time.

Look at the US DOllAR strength in the charts above. UUP strength was yesterday, in fact, more than today.

Those who think this is the same type of market to which they have grown accustomed during THE FED PUT era are, I think, mistaken. The FED is determined to pop the bubbles that QE created. That is a much different mind-set. It puts Jay Powell on a collision-course with Trump and with almost all politicians who only see their own self-interest. Happy voters make for happy politicians; cheap money makes forl happy voters. Anyone who has read me knows that happiness is the shallow side of the equation; meaning is the other and meaning is often querulous.

Our COUNT1V System Weekly Changes (41, getting back to "normal") tell us a few things. More BUY SIGNALS than there have been. Always keep an EYE (a BIG EYE) on the MOMO SHAPE. Red line, top pane. The shape matters because lower-lows and lower-highs indicate a BEAR MARKET.

When we get a BUY SIGNAL, such as AYX, at the very least we want to see a MOMO that is holding its own, at the very least moving sideways against the selling tide. Which AYX is doing.

As GUSH is not doing.

GUSH is a New BUY SIGNAL. But MOMO is decideldy NOT bullish. SUM60 (green) is moving up. PROP1 is back in the BULLZONE. MOMO shows a lot of resistance levels overhead.

Of course, my perspective says OIL (and GOLD) cannot really rally while the Dollar is rallying. What is going to bring the DOLLAR down? Political screaming and threats of a Powell impeachment?

I believe we need to STRONG DOLLAR and have even advocated the Republicans marry the Democrats, since they are both owned by WALL STREET, and a new party be formed, THE NEW GREENBACK PARTY, with the platform of a Strong Dollar to re-create a STRONG AMERICA again. Trump cannot make America Great Again unless he makes the Dollar Great Again. He does not see this. I see this.

I don't want a Strong Dollar perpetually. 18 years for the Weak Dollar (1983-2001) always followed by 18 years for the Strong Dollar (2001-2019). Of course, the FED uses the devaluation of the Dollar to try to avoid Deflation Seasons and so misses out on the silver-lining of Deflation Seasons: destruction of debt; lowering of prices; destruction of asset bubbles; nourishment of Savings; strengthening of the local currency. Instead we have debt piled on top of debt, which is what the FED DOES normally. The FED was created to avoid Deflations, Depressions -- and the only thing it knows to do in order to do this is to destroy the home currency, which eventually destroys the home country. Jay Powell seems to understand this folly.

Do we BUY GUSH, looking at this horrible MOM(emtum)? Is oil going to rally from this point? We know it is oversold. A reflex rally is overdue. If you buy GUSH or SHORT DRIP be light on your feet. The MOMO of DRIP is powerfull and bullish.

LABU is claiming it is a BUY also. LABU, BULLISH BIOTECH 3x ETF. MOMO says this is a fake news channel.

We use two systems to trade 3x ETFs. A TRADING SYSTEM (top pane) and a longer-term system (price pane). Below, in the portfolio, LT is the boxes on the readers' left, short-term is in the boxes on the readers right. Remember, the farthese box on the right is today's trade. Red is SHORT; green is LONG. We won't trade both GUSH and DRIP at the same time; either or.

3x Portfolio is doing well, up 11.4% since 12/7/18.

We have a few stocks we would like to look at here. First, a BIG NAME, AMZN. It is a BUY in our HYBRID AAA System. But look at MOMO before buying. MOMO is still down, in a tight range, meaning a lot of resistance to the selling. But still down. Prop1 is second tier positive. It is still above -7, BULLISH, but there is too much activity in bothg COUNT1, bottom pane, and in PROP2.5 Spin, second pane from bottom.

A better buy technically is FIVE, FIVE BELOW.

Look at the Momentum!. Not as much chatter in COUNT1 or in PROP2.5 SPIN.

We were SHORT EMES, and it turned into a losing position. We closed it with a losss.

Why don't we go long here? We don't think the OIL recovery is at hand; AND MOMO is still negative. We want RED MOMO to make a new high.

We covered and EMES friend HCLP with a nice trading gain. Look here too, MOMO is saying we will have more losses after an attempted rally.

DOCTOR tomorrow; things to do. Short post tonight.

Still a lot of SHORT signals stacking up in our 3x TRADING SYSTEM, which makes us quite certain and concerned that more selling is at hand. DH HORTON IS A NEW SHORTSELL SIGNAL today.

Be cautious LONG; be ready for more selling.



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.

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