Keybot the Quant Turns Bullish 2/16/12
Keystone's proprietary algorithm, Keybot the Quant, flips back to the long side once the SPX 1356 was achieved this afternoon. These markets are very erratic and a whipsaw back to the short side would not be unreasonable as well. The stutter step for the algorithm resulted in a one percent loss for the program and a two percent loss for the actual trading. The utilities, UTIL, moving above 451.17 was important today. Perhaps the pre-holiday seasonalilty buoyancy is creeping into the markets.
More information is found at Keybot's site:
http://www.keybotthequant.blogspot.com
Keystone: interesting; you meant 1356 right!? I've been 100% cash since last Wednesday when I sold all my SPY longs at $135. This up-down days on a daily basis since the last week are very hard to trade. I'd like some clear direction, and will stay cash to confirm (never front run a move right!)
ReplyDeleteHello Arnie, yes, 1356, that typo will be fixed. Yes, this is interesting action, the trade off in waiting for more clear downward confirmation is that a big chunk of the move can be missed.
ReplyDeleteKeystone uses Keybot to control the core position, but in the shorter term trading, reflected by charts and posts on this site, Keystone is shorting several sectors now and increasing short exposure for the shorter term trading right now. If not in the market there is definitely no loss or gain.
The tradeoff is risking the small one or two percent losses as disciplined stops are hit in these sideways choppy markets the last few days, weighing this against the possibilty that overnight the markets may be lock limit down to start the next day. If the Dow, say, is down five hundred points one of these mornings, obviously the short side play would be missed. These are some of the difficult strategies to decide and it all depends on risk tolerance.
Perhaps the markets will maintain a flatness into the holiday weekend, then we see what happens next week.
keystone, though I absolutely agree I am fine with missing some parts of a move. I don't have to catch the entire move. E.g. from an EWT perspective, I like to ride the 3rd and longest waves! Or as the saying goes: I made money because I sold too early ;-) From that you understand I am not a day-trader but more an IT term trader, holding positions for days or sometimes weeks. Hell, I held AAPL since it went through $200 early 2010 and sold at $400 late 2011. A 100% gain. Not shabby! Could have gone to $500, but yesterday showed how dangerous such hyper-inflated levels can be, so selling early guarantees profits, selling late guarantees losses! At least for me and my trading style.
ReplyDeleteHello Arnie, in that IT time frame Keybot may be of use in the context that if Keybot commits to a direction for, say, about three to five days in a row (rather than less than two days such as just occurred), that would show a more sustainable trend by Keybot so whatever direction Keybot would be moving in should be in line with the direction projected by your work.
ReplyDeleteAnd it looks like a good example just occurred, Keybot was long for two months straight, at the same time you were enjoying the market long side so Keybot would supply confidence since it is moving in the same direction.
KS, agreed! I went long at 1295 when the October high was broken. Had I known KB back then, I'd have gone long a lill over 1250 probably. So that would have doubled my gains. Not shabby ;-) But, of course hint sight is 20/20. Nevertheless, I'll wait till after the 3-day weekend to see what happens and if the long-trend is confirmed by then. Cash is always a position too. I ain't making money, but surely ain't loosing anything either!
ReplyDelete