Interdum stultus opportuna loquitur...

Wednesday, February 08, 2006

SPIRant: Better Late Than Never...

Note - from June 24th 2009, this blog has migrated from Blogger to a self-hosted version. Click here to go straight there.

The SPI has taken a nosedive, but oddly it happened two days late (at least according to my view of the world). Anyone who shorted Monday morning's first overbought ought to be a happy camper.

As you will have seen from the last blog instalment, my initial guess was that overbought would be hit between 10:30 and 11:00 a.m.: as it turned out, that timing was WAY too early. The actual timing was 4 p.m. Monday with the SPI above 4885 - evidenced by a textbook CCI divergence of the type that I have harped on about for over a year.

Sadly I can't post a chart from here, but there are any number of sites (e.g., that enable registered users to overlay the CCI and %R over a 15-minute chart - so for the moment youse can all look for youse-selfs.

Anyhow, if you ignored the SPISpy-RoE and simply jumped in between 10:30 amd 11:00 a.m., you got set at between 4831 and 4846, and then had to endure a significant "negative excursion" before the trade worked - the key thing is it now smells of roses (and just quietly, with the session low at 4793, everyone trading more than one unit should have taken at least half of their position off the table, and anyone trading one unit shuld be out completely). I made it clear that the change to a longer holding period for SPI trades (out to a period of 2-3 days rather than 15minutes-1 day) would mean a bit less accuracy - which is why the SPISpy-RoE becomes important (to 'refine' entries once the overall direction is provided). those SPISpyers who don't have a copy should let me know ASAP.

I also mentioned that the SPI would bounce to a new, lower weekly and daily high this week - so far that has panned out nicely, with the SPI reaching 4900-ish on Tuesday morning prior to the tank.