Epic Intraday Reversal...Still No Major Change in State of Average Stock

The indexes saw a major intraday reversal, regaining over a percent of value after dropping overnight and into the morning.

What I'd like to see in a bull thrust like today is many stocks participating in the moves by improving in technical condition.  However, my market heat index yawned with today's move, actually dropping a point from 32 to 31 degrees.

The bullish percent portion of the index actually hit a new low today.

I'll be looking for more motion in the heat index in the positive direction to really trust in a sustained bull thrust.  Otherwise, my posture remains defensive as I heed the warning of the -1 POS score.

2015, Educated on Currency Risk Yet?

The news of the day is the PBOC's decision to devalue the yuan by 2%, causing a massive change overnight.

I am reminded of the Swiss Bank's unpegging the Franc from the Euro earlier this year.

Currencies typically have lower volatility than other assets like stocks. This feature is why many Forex traders use large amounts of leverage to trade these assets. However, 2015 is here to remind you that central banks, not the markets, have the final say on the value of currencies.

Yes, even currencies can have major gaps that ruin trading strategies in one fell swoop! Always keep risks in mind when trading even the most low volatility assets.

POS Update Complete!

I have completed my revision to the Point of Sail Indicator. The Explanation page has been updated to reflect the changes. Please visit to learn more about what is new! http://maintrimmercapital.blogspot.com/2014/11/point-of-sail-market-score-history.html

Highlights:

• The POS now takes a professional, contrarian view to trend following, encouraging buying weakness and selling strength, helping you to manage risk when trading or modifying portfolios


• The underlying index that uses binary questions to objectively analyze the markets was not modified, just the filters to derive the final output number to encourage better trading


• An objective Long Term trend analysis component was added to further improve the POS. The -1 score warns that the long term trend is weak or neutral, not ideal for bull market short term swing trading.


• The POS data now goes back to late 2011!


• A trading system was developed using signals from the POS. Using UPRO as the trading vehicle, the system returned 300% since 2012 and had positive returns every year.


• The Market heat index was completed and is now the ultimate breadth indicator for the site.

Again, I invite you to visit the explanation page for more details!

The Point of Sail Index is being Updated!

I am excited to share that I will be improving the POS indicator! While the underlying index and its calculations will not change, I will be adding a few new features and screens to determine the final signal output. The new signal outputs will be much more amenable to short term swing trading. I will also share a trading strategy to make the best of these new changes. Stay tuned for final changes by the end of the week.