Model Notes: The gold model issued an exit the short signal. This proved to be a lucrative trade based on the previous short signal (10/20 , TSP= 111.73). Additionally to making money, there were a couple of nice nuances. First, after the sell signal, the market did not melt away, so the trader had five days to actually enter the position before the breakdown. Secondly, the exit signal comes on a down day, providing a positive backdrop for closing the trade out. How about the VIX? The models are flat (waiting for an entry). So is there any news? A flat volatility reading at a relative low level is positive for stocks.
Featured market rotation: VIX for November (looking for a starting signal now). Brazilian real for December. S&P for January. Gold is currently non-rotational.
Model Portfolio Signals: (Gold) Flat Signal= 11/03 (TSP=waiting), (Vix) Flat, waiting for signal.
Note: TSP is calculated by using the closing price of the trading day after the signal day.
Nonlinear Trading Themes:
- Gold: Gold experienced a precipitous drop and the models are now indicating to exit the short trade. GLD is now near support so the exit signal has some technical underpinning. The model gold portfolio signal is now flat..
- VIX (Nov. Featured Market): We are still waiting for an entry signal of some sort. I have some indication of a solution later in the week. The current reading is helpful for the S&P 500 rally.
Note: Technical analysis comments are based on interpretations of non-linear trading models, combined with chart price action.
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GH Garrett – Veteran Market Watcher for ConquertheMummy.com © 2015, “Nonlinear signals that matter in gold trading.”