CGTS THURSDAY: DEATH BY A THOUSAND CUTS; CROSSOVER BREAKS DOWN; SHORT INDEX TRADES

CGTS Algo Trading System

by Michael Clark

Launch chat

• Latest
• Getting started

Michael Clark

CGTS THURSDAY: DEATH BY A THOUSAND CUTS; CROSSOVER BREAKS DOWN; SELL INDEX TRADES

Sep. 24, 2020 11:15 PM ETSPY

Summary

• CROSSOVER finally broke. What do we do now?
• Our message is a bit mixed. Our CROSSOVER System is BEARISH. We are not, in fact.

CGTS TRADING POSTURE BEARISH.

CROSSOVER NEGATIVE.

CROSSOVER TRADE

SHORT GSPC , S&P 500. We close out a 27.74% LONG gain since 3/27/2020 and we initiate a SHORT position against the index (SPY)

You will see we had quite a lot of decay, in fact. C1 CROSSOVER went negative; BUYER-SELLER CROSSOVER did also. FEAR GAUGE went negative (>50%). (See how C1=2 (730) has eclipsed C1=1 (686).

MOMODIFF (MOMOBULL) also went negative.

This has been quite reliable. Look at the last time this happened. It has been >50% since 3/24/20.

MOMO BULL%	Date	FEAR GAUGE	UDOW
67.53%	1/6/2020	32.47%	126.50
65.81%	1/7/2020	34.19%	124.96
60.00%	1/10/2020	40.00%	128.03
60.46%	1/13/2020	39.54%	129.11
60.46%	1/14/2020	39.54%	129.38
64.11%	1/15/2020	35.89%	130.75
64.54%	1/16/2020	35.46%	134.14
68.74%	1/17/2020	31.26%	134.98
66.26%	1/21/2020	33.74%	133.62
59.38%	1/22/2020	40.62%	132.78
56.16%	1/23/2020	43.84%	132.51
53.01%	1/24/2020	46.99%	130.14
44.91%	1/27/2020	55.09%	123.96
33.52%	1/28/2020	66.48%	126.50
38.48%	1/29/2020	61.52%	126.48
39.04%	1/30/2020	60.96%	128.09
36.73%	1/31/2020	63.27%	119.97
30.06%	2/3/2020	69.94%	121.79
36.87%	2/4/2020	63.13%	127.08
54.21%	2/5/2020	45.79%	133.44
69.10%	2/6/2020	30.90%	134.64
67.28%	2/7/2020	32.72%	131.13
57.94%	2/10/2020	42.06%	133.50
59.03%	2/11/2020	40.97%	133.59
60.81%	2/12/2020	39.19%	134.86
65.59%	2/12/2020	34.41%	137.16
70.08%	2/13/2020	29.92%	135.93
66.64%	2/14/2020	33.36%	135.58
62.87%	2/15/2020	37.13%	133.19
62.42%	2/20/2020	37.58%	133,03
60.81%	2/21/2020	39.19%	129.90
42.90%	2/24/2020	57.10%	116.28
21.55%	2/25/2020	78.45%	105.27
14.47%	2/26/2020	85.53%	103.64
15.13%	2/27/2020	84.87%	90.10
53.60%	3/5/2020	46.40%	102.81
13.62%	2/28/2020	86.38%	87.60
20.63%	3/2/2020	79.37%	99.39
49.74%	3/3/2020	50.26%	90.61
49.74%	3/3/2020	50.26%	90.61
47.12%	3/4/2020	52.88%	102.81
32.50%	3/6/2020	67.50%	89.24
16.06%	3/9/2020	83.94%	68.81
11.07%	3/10/2020	88.93%	78.23
30.08%	3/11/2020	69.92%	64.86
30.08%	3/12/2020	69.92%	64.86
9.90%	3/15/2020	90.10%	45.75
12.19%	3/16/2020	87.81%	57.77
22.35%	3/17/2020	77.65%	37.30
19.99%	3/18/2020	80.01%	33.50
24.62%	3/19/2020	75.38%	34.14
50.10%	3/20/2020	49.90%	29.62
38.49%	3/23/2020	61.51%	27.03
54.69%	3/24/2020	45.31%	35.86
83.54%	3/25/2020	16.46%	38.42
84.79%	3/26/2020	15.21%	45.54
81.84%	3/27/2020	18.16%	40.43
46.36%	3/30/2020	53.64%	44.25
37.84%	4/1/2020	62.16%	36.11
24.44%	4/2/2020	75.56%	38.20
34.21%	4/3/2020	65.79%	36.72
47.74%	4/6/2020	52.26%	44.96
66.89%	4/7/20%	33.11%	45.05
82.75%	4/8/20%	17.25%	49.66
87.28%	4/9/2020	12.72%	51.58
82.13%	4/13/2020	17.87%	49.45
82.69%	4/14/2020	17.31%	52.96
65.90%	4/15/2020	34.10%	49.96
78.95%	4/16/2020	21.05%	50.12
72.66%	4/17/2020	27.34%	54.57
75.43%	4/20/2020	24.57%	50.69
74.08%	4/21/2020	25.92%	46.67
71.06%	4/22/2020	28.94%	49.31
71.06%	4/23/2020	28.94%	49.58
71.96%	4/24/2020	28.04%	51.22
73.66%	4/27/2020	26.34%	53.51
79.79%	4/28/2020	20.21%	53.45
84.81%	4/28/2020	15.19%	56.87
87.03%	4/30/2020	12.97%	54.80
85.14%	5/1/2020	14.86%	50.73
74.76%	5/4/2020	25.24%	50.82
72.90%	5/5/2020	27.10%	50.82
69.70%	5/6/2020	30.30%	50.39
69.70%	5/7/2020	30.30%	51.80
66.43%	5/8/2020	33.57%	51.80
70.70%	5/11/2020	29.30%	51.80
73.10%	5/12/2020	26.90%	51.00
65.98%	5/13/2020	34.02%	47.89
57.50%	5/14/2020	42.50%	50.03
56.60%	5/15/2020	43.40%	50.03
57.92%	5/18/2020	42.08%	56.16
57.92%	5/18/2020	42.08%	56.16
68.99%	5/19/2020	31.01%	53.62
70.02%	5/20/2020	29.98%	56.04
73.80%	5/21/2020	26.20%	56.04
75.08%	5/22/2020	24.92%	55.42
76.62%	5/26/2020	23.38%	55.51
81.02%	5/27/2020	18.98%	62.87
83.22%	5/28/2020	16.78%	61.94
81.96%	5/29/2020	18.04%	61.78
80.99%	6/1/2020	19.01%	62.50
82.73%	6/2/2020	17.27%	64.43
83.70%	6/3/2020	16.30%	68.51
79.63%	6/4/2020	20.37%	68.61
85.30%	6/5/2020	14.70%	74.91
86.18%	6/8/2020	13.82%	78.94
89.74%	6/9/2020	10.26%	76.51
77.67%	6/11/2020	22.33%	58.83
53.36%	6/15/2020	46.64%	63.31
55.47%	6/16/2020	44.53%	67.27
59.27%	6/17/2020	40.73%	65.80
59.89%	6/19/2020	40.11%	65.61
58.46%	6/22/2020	41.54%	65.13
59.08%	6/23/2020	40.92%	66.11
59.08%	6/23/2020	40.92%	66.11
56.03%	6/25/2020	43.97%	62.81
54.79%	6/26/2020	45.21%	57.57
51.68%	6/29/2020	48.32%	61.47
52.46%	6/30/2020	47.54%	62.81
53.31%	7/1/2020	46.69%	62.42
54.40%	7/2/2020	45.60%	63.30
54.89%	7/6/2020	45.11%	66.59
56.89%	7/7/2020	43.11%	63.60
56.65%	7/8/2020	43.35%	64.86
57.19%	7/9/2020	42.81%	62.24
56.28%	7/10/2020	43.72%	64.87
56.52%	7/13/2020	43.48%	65.05
55.26%	7/14/2020	44.74%	69.05
56.52%	7/15/2020	43.48%	70.89
62.72%	7/16/2020	37.28%	70.89
63.24%	7/17/2020	36.76%	69.39
64.50%	7/20/2020	35.50%	69.42
65.07%	7/21/2020	34.93%	70.67
67.64%	7/22/2020	32.36%	71.92
67.64%	7/23/2020	32.36%	71.92
67.58%	7/24/2020	32.42%	67.74
66.93%	7/27/2020	33.07%	68.68
66.15%	7/28/2020	33.85%	67.09
66.09%	7/29/2020	33.91%	68.30
67.70%	7/30/2020	32.30%	66.56
67.04%	7/31/2020	32.96%	67.36
66.81%	8/3/2020	33.19%	69.18
67.58%	8/4/2020	32.42%	70.42
68.91%	8/5/2020	31.09%	73.31
70.93%	8/6/2020	29.07%	74.94
70.63%	8/7/2020	29.37%	75.39
70.85%	8/10/2020	29.15%	78.36
72.43%	8/11/2020	27.57%	77.54
70.56%	8/12/2020	29.44%	79.97
70.38%	8/13/2020	29.62%	79.40
71.26%	8/14/2020	28.74%	79.59
72.43%	8/17/2020	27.57%	79.00
72.38%	8/18/2020	27.62%	78.36
71.96%	8/19/2020	28.04%	77.67
71.26%	8/20/2020	28.74%	78.12
70.26%	8/21/2020	29.74%	79.78
67.88%	8/24/2020	32.12%	83.08
67.53%	8/25/2020	32.47%	82.51
68.00%	8/26/2020	32.00%	83.21
67.53%	8/27/2020	32.47%	84.76
67.47%	8/28/2020	32.53%	86.30
68.96%	8/31/2020	31.04%	86.30
68.96%	9/1/2020	31.04%	86.31

We have mixed feelings about all this. GSPC is NOT negative here really. It is clutching support @ 3286.5. Our prediction, I guess, is that this will not hold. NOTE (orange) ULTIMA just broke down through zero. This makes us suspect that there is more selling to come here. PROP2.5 (grey, top pane) is still holding up, as is EXCAL (blue, top pane). They will both plummet when the next wave of selling hits.

The CROSSOVER is NOT designed to call a TOP; it is designed to show us when the SELLERS actually win (when the STORM of SELLING, the SNOW, gets too heavy for the roof to hold up).

You will see that we don't call the top in early 2020, which occurred on 2/12, if we believe the UDOW. We are now thinking that ULTIMA will be a very good instrument for calling the TOP. So we will try to improve our instruments again.

We want a stable system that does not get hysterical (too many signals), as we all know that nothing is worse than experts thinking only with their guts.

GUT FEELINGS ARE SOMETIMES RIGHT,. DO WE WANT TO FOLLOW AND IMPULSE OR AN INSTINCT THAT IS SOMETIMES RIGHT? No. A rational system may not be perfect (will not be perfect) but will it be right more often than the GUT FEELING? Compare our system with those SA writers and media financial writers who are always calling for a BEAR MARKET. The long-term view is NOT the trading market. Yes; stocks will go down; but WHEN will they go down. Without a more precise system you can only follow your logic or your GUT, neither of which seems to have developed a timing mechanism. As such, both are flawed.

Ok, what does this mean? Investors that can shift IRA funds in and out of the markets should shift out of the markets -- that is our recommendation.

We will be taking out INSURANCE by buying put options on either SPY or UDOW.

Since all of our systems have their own built-in SELL SIGNALS, we will not sell everything we own in a LONG POSITION. We think there is more risk to the downside now than there is opportunity to the upside. We hope we are wrong. Our CROSSOVER TRADE system has a good record; so we will follow it trading GSPC to the SHORT SIDE here.

Does this mean our trading response will be more SHORT than LONG? We always seek to have a good balance between SHORT and LONG positons. It all depends on what signals we get from our trading systems.

A couple names with which we are familiar.

ATHX, SHORTSELL.

NKLA. SHORTSELL. MOMO is jacking down.

ACB, COVER SHORT.

OK; what do the TRIANGLE TRADE PLUS BUY SIGNALS look like?

Start with SRNE, nested in the SHORTSELL LIST.

Then:

BDRY? Is the Global Economy really growing?

TCX, a very nice BULLISH chart.

XBIT, BUY.

SOL is bouncing up and down here; not a BUY today; but it is returnning the the earlier BUY LEVEL. But MOMO is still BULLISH (HH; HL.)

MESO, BUY.

If we are right about the (CROSSOVER) Market, it would be foolish to BUY these stocks here, right? We want to move toward a (MORE) balanced portfolio; this means taking on more SHORT positions as they appear.

RETURNS. We continue to do well this year.

We are becoming increasingly infatuated with out EXCAL PROP2 and EXCAL PROP2.5 Systems.

RECENT SELLS:

EXCAL-PROP2 BUY today

In the same system, LBY is a BUY -- but we are ignoring it because of C3=0 and because of MOMO. It is not ready yet (PROP2 is very short-term)

This weekend we said the market was screaming BUY AT US (we did not say the market was a SCREAMING BUY, at least I hope we did not). FISHNET-EXCAL is down 2.1%e right about market direction it will go down more.

But the system, so far is remarkably stable. Only five (of 67) of those trades have decayed, despite all the selling.

I am very encourage by this stability. At least so far. It could change.

We have one new 3x trade, Bearish oil and gas, DRIP. This is a LONG poisition in the SHORT trade -- energy is going down. We are already SHORT ERX but we agree that energy is bearish here.

We ignored the SCOM LONG position (BEARISH COMMUNICATION) even though it was C3=1 Bullish; and we are ignoring the DRV LONG position (REAL ESTATE Bearish).BECAUSE it is C3=3 BEARISH.

2020_PORT_TRIANGLE_TRADE_PLUS_PORT_92420.xlsx

WHY ARE ASIAN ECONOMIES IMPORTING LESS OIL NOW? Does that mean they ARE IN RECESSION?

SELL, ULTIMA WITH EXCAL System.

Best wishes to all. Sorry the message is a bit mixed tonight.

MJC, CGTS

Disclosure: I am/we are long WKHS, SOLO, BLNK, GBTC.

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.