|
PureBytes Links
Trading Reference Links
|
Just got an RBI buy for the open on Friday (basis the SP500). As some
of you know, these signals are somewhat rare - we get about 4 to 6
per year. Most of our work tends to be discretionary, but these RBI
signals are mechanical. We last published one in Realtraders almost a
year ago (a buy for the open on 12/17/96, very successful). Merry
Christmas. Here is the gist of what we put out:
We have an RBI buy signal for Friday morning. This looks like it will
be a good trade if the "Asian Contagion" doesn't mess things up. Today
was the second consecutive day that the SP futures hit limit down. We
saw a good washout today with the tick holding <-1000 for an hour
while we made our lows. The 5 day rate of change on the SP futures is
-20.96, very oversold. Three day thrust at -.70, also very oversold.
10 day open trin is 1.12, very oversold if this is not a bigger
picture washout.
The front month futures contract has rolled over to March, so all
futures prices are basis the March contract. We will be buying the
open tomorrow. Our profit target for conservative traders is 979.80
basis the March SP futures. Aggressive traders cover on a CLOSE of
979.80 or better. We will use a sell stop of 955.60 on A CLOSING
BASIS. In other words, we will have a 955.60 sell stop close only. Our
intraday disaster stop is 943.90.
Though it isn't part of our RBI trade, a breakout above 975.00 (March
SP) gives an old-fashioned "buy a breakout of the previous days high,
IF in a larger uptrend and there are 3 (or 4) days in a row with lower
highs and lower lows." This is an old floor trader's price pattern,
and it simply gets one back aboard the LARGER TREND. More than 4 days
of lower highs and lower lows would be a big warning that the big
trend has turned down.
Good trading,
Jeff
------------
RBI Trader's Weekly
http://www.lowrisk.com
|