Friday, October 12, 2012

T3 Update..10.12.12

TLT continues to play a bait and switch game with our signals.  With a Long Exit firing on the Delta Bands yesterday, the other TLT signals are still strongly positive.
Based on the TLT signals divergence I hedged my bets somewhat and closed one third of my TLT short term trading position at yesterday's close.

As of yesterday's close the top 3 components have kicked XLP and added TLT.  Tomorrow we'll post the new top 3 lineup for next week.. Mondays have had a negative bias lately, meaning sell offs are likely before the 'Tuesday turn-around", a popular misnomer among traders.  If we don't see some buying momentum kick in by Tuesday then the outlook for equities gets a lot murkier.  This is mid month and, as we have examined in earlier posts, this is typically a period of reduced volatility although option expiration is next Friday, which tends to pump volatility....(and you thought trading was easy).  We're still mid earnings season and those reports and guidance are adding another ingredient to the volatility soup so caution is the watchword for short term traders.

Monday we'll look at the TLT / XLF pair trade, a surprisingly reliable setup when entered with guidance from the TrendX indicator.