I have been gone....

But my platform has done the work for me as I am now unhedged.

My trailing stops on the long hedges I had left were eventually hit and am now strongly biased on the short side. My shorts have not changed and are as follows:

• DAX: 5250.3, 5280.8, 5352.8, 5418.8
• NQ (rolling): 1594.4, 1624.6, 1629.4
• SMI: 5770.7, 5914.5, 5998.2
• FTSE: 4608.0, 4630.2, 4638.5, 4682.5, 4697.0
• Russell: 547.5, 561.0, 562.7, 571.4
• S&P: 980.6, 993.1, 993.4, 998.4, 1001.1, 1007.6

Positions and chart update

Daily charts have began to show sell signals, but with the FOMC today let's wait and see. The hedges I have left will begin to peel off automatically once certain levels are broken and my short book remains as follows:

• DAX: 5250.3, 5280.8, 5352.8, 5418.8
• NQ (rolling): 1594.4, 1624.6, 1629.4
• SMI: 5770.7, 5914.5, 5998.2
• FTSE: 4608.0, 4630.2, 4638.5, 4682.5, 4697.0
• Russell: 547.5, 561.0, 562.7, 571.4
• S&P: 980.6, 993.1, 993.4, 998.4, 1001.1, 1007.6

Last week and yesterday morning many indices touched the Upper Bollinger Band on weekly charts, with prominent negative divergence on intraday charts (over several time frames) and we then developed a sell signal on daily charts.

It's the middle of August, trading floors are empty: let's keep that in mind.

S&P Weekly


S&P Daily

DAX Weekly


DAX Daily


FTSE Weekly


FTSE Daily

Reduction of hedges

Throught this morning I have significantly reduced my hedges, some at profit, some at loss with an overall breakeven picture.

I am now still hedged for about 30% of the value of my shorts, and will look to reduce them completely (at a loss at that point) as soon as confirmations are in on daily charts.

I have started to hedge my shorts

Over the past hour or so, I have gone long on the following CFDs for about 70% of the total value of my shorts:

FTSE Sep 09 4694.6
S&P Sep 09 (the current ES): 1005.1
NQ Sep 09: 1613.3

I have done so to hedge myself in case of further upside, which obviously means forgoing part of the profits should my shorts eventually work.

The stops for my short are about 5% or so above the higher end of the ranges I have been looking at (left).

Update: please see how one index, the S&P, has today pierced the upper Bollinger Band. I have circled similar occasions, I think I got them all. On weekly charts, BBs often act as support/resistance: but if prices begin to stack against them it's not safe to trade the opposite direction hence my decision to hedge above certain prices. More than one index has today pierced its upper BB on the weekly.

Divergence....again

This is a 1 hourly chart for the S&P (actually it's the rolling ES contract, so 24 hour S&P). Notice the divergence on RSI, ROC and linear regression slope: let's see if and when it delivers.

Shorts recap

These are the shorts in my book at the moment:

• DAX: 5250.3, 5280.8, 5352.8, 5418.8
• NQ (rolling): 1594.4, 1624.6, 1629.4
• SMI: 5770.7, 5914.5, 5998.2
• FTSE: 4608.0, 4630.2, 4638.5, 4682.5, 4697.0
• Russell: 547.5, 561.0, 562.7, 571.4
• S&P: 980.6, 993.1, 993.4, 998.4, 1001.1, 1007.6

I have no idea why I entered the S&P at 980, eagerness I guess, as my target area initially was 990 to 1000 and was then extended to 1005. The first DAX entry is also kind of "early".

Added FTSE position

A short at 4697.0. See "Short positions" on left column for overall situation.

Adding further shorts

I am continuing to scale into short positions on several indices, and have just added the following (be mindful I trade CFDs, that's why I can add the US indices as well at this hour).

S&P: 1007.6
Russell: 571.4
NQ (rolling): 1629.4

Divergence on S&P

Look at both the classic "M" pattern as well as the divergence on an eight hour intraday chart for the S&P. Unless we rally a further 20-40 points or so, a retrace seems in the cards.

Short positions

Over the last week or so I have been entering a variety of short position across a spectrum of indices.

More than one index has touched the Upper Bollinger band after the rally we have witnessed since March. I have thus gradually exited most longs and then switched to shorts, as you can see on the left. I still hold some long positions, but I am looking to keep what I have left long term as they are March/early April entries.

My expectation is for a 50% to 61.8% retrace from the early July lows to the recent highs. Below are charts for the S&P, DAX and FTSE: you can run the same analysis on several others. Watch how Upper Bollinger acts as resistance: we still have to find confirmation in momentum indicators both on long intraday timeframes as well as on daily.

S&P Weekly Chart

DAX Weekly Chart


FTSE Weekly Chart

Welcome!

Welcome to Indexland.

I hope this site can become a center for discussion for traders of index products. My trading book is dedicated mostly to indices and commodities, with positions taken using CFDs (Contracts for Difference), so I mostly refer to the levels on the cash indices: this in turn can be applied to futures contracts with the appropriate adjustments.

I run a long/short book, and engage in both long and short term positions. Indexland will be dedicated solely and exclusively to the positions in my long term book, rather than the daytrading/swing/scalping book. Most positions here are hold on to for a week and usually longer.