We are stuck in the 4,4 Uptrend. The signals are the same, sell SPX 2% less than current and sell SPY 4% less than current. I’m not trading today and possibly not next week due to being busy.
Hey <@804151543136780289> , just checking in and hope all is well! Have you had any updates on your data? Wondering what kind of signal your model is showing??
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I’ve been off a good bit this summer with my kids but they go back next week so I should be able to update this regularly.
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We are in no man’s land with the SPY signals from this model. Several days had no signals whatsoever. Today, the only signal (selling SPX puts), has a lower win % than usual (71%). I’m not trading the signal today. The data is below.
August 4th was an interesting data point. The return group was a 3,4 Even Trend which has only occurred 79 times over the last 100 years. 55% of the time this return group occurred, SPY failed to increase 2% at any point over the following month. This is rare.
The last time SPY increased 2% from a data point was 7/14. That is a long streak of losses that followed an even longer streak of wins. 26 straight losses (so far, there is more time for this to turn around) following 51 straight wins from 5/2 through 7/14.
That was a very big run from around 409 to around 460. Surprisingly, the return groups during that run were sub-70% win % groups. In other words, most days during that run, the win % was less than 70%, but they paid big, especially the first 15 trading days which had a majority of return groups with win %s in the 50s. I plan to study this further to see if there are correlations or if this was an outlier. I’m interested to see if I find return groups that tend to have explosive winners even if they have lower win %s. These may be worth playing more often if the rewards outweigh the risks.
I’m cautious to play SPY bullish right now. The headwinds are the huge run recently, the low win %s for these plays according to the model, and the tendency of the market to decline when interest rates decline which I believe is the next phase of the interest rate management cycle the Fed is managing. But if I see higher win %s again per this model, and I have time to manage it, I’ll play these again.
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We are in a 3,2 Even Return Group today. Not great signals for this one unfortunately. We had a few good signals over the past few weeks, but I failed to update timely.
See below data.
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See attached updated data. Got a nice SPY call signal so I just bought one ATM 30 days out. 74% success rate is pretty darn good, especially as cheap as these are $875.
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Terrific buying opportunity today. Return group is 4,1 in a downtrend. It’s happened 230 times in history and 74% of the time, the S&P 500 increased at least 2% within 30 days. My target for selling is SPY 444.50 based on the buy signal from 2 days ago. If it happens within the next 2 weeks, we should see a 60%+ ROI on calls purchased today.
I bought another one today, SPY Call 436 Strike, 11/17/23 exp.
Here is the data:
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<@804151543136780289> have you been buying the same strike from 10/16 and averaging down or are you taking a different strike today based on how far it’s currently OTM?
Same strike, averaged down
May try to join ya tomorrow
Are we still in a 4,1 today? (would think so but not sure where to find this)
We moved to a 3,1 down trend return group today. It’s occurred 330 times with a 81% success rate. This is one of the very best signals this model produces. I’m definitely playing it. Who knows what happens with rates, politics, etc. I’ve used those outside forces as excuses in the past for not playing these signals and regretted it. There is a 19% chance of loss so I’ll play responsibly, but I believe this will pay off.
I’m buying a SPY 423 strike with 11/17 exp.
I’m also averaging down on the prior calls since they are so cheap right now and there is still data supporting a return to 444 by 11/17.
Lastly, I’m selling a SPX Put 2% less than current 30 days out (SPX Put 4150) and buying a covering SPX Put to manage risk (SPX Put 4075).
Here is the data:
We are still in a 3,1 down trend return group which is one of the very best signals per this model. 86% success rate for selling SPX Puts and 81% success rate buying SPY Calls. I’m fairly deep into this trade already so I decided NOT to trade anymore, but if I hadn’t already, I would definitely jump on these today.
Data is below.
The return group is still 3,1 Down trend so still an excellent buying opportunity. I’m still riding my previous plays and will hold their since I’m in pretty deep already. If I hadn’t already, I’d definitely buy SPY Calls ATM 30 days out for exp and sell SPX Puts 2% lower than current, 30 days out.
Here is the updated data:
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This was right on the money today. Thanks!
Not gonna lie, I’m sweating my Nov 17 calls. I’ve yet to average down since 410 is next resistance.
Updated data below. We are still in a 3,1 downtrend return group so an excellent buying opportunity. Although I’m in pretty deep, I may have to get one more call today ATM with 12/1 exp. 81% success rate is very rare and since the play has been on since around 436 and we are now at 413, it’s hard to believe it won’t pay based on the data. I’ll likely average down again on my first calls since they are now only $0.56 (originally closer to $9.00). I see these more as lottos at this point, but the data still does suggest there is a 74% chance they’ll be worth more than $1,000 before they expire.
I’ll also be selling a SPX Put today at 4060 strike, 12/1 exp. and cover by buying a put at 4000. 86% success rate is hard for me to pass up.
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Sorry @puttytangnutbags, hopefully SPY comes back before 11/17. The data suggests it will, but this could be an outlier unfortunately.
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No worries. I’m curious about the 19% signals from the past that didn’t play out. Could you give me those dates when you get a chance? I want to see what macro events were happening with them and how they might compare to the present
@puttytangnutbags Here are the dates for the 19%. There were 77 instances. There were a bunch in 1952 & 1953 and then several again in 1984 and 2011.
