(click images to enlarge)
The back-kiss of the LT trendline (purple arrow on chart above) that I mentioned in my last post was indeed a hidden buy signal. 🙂
As I type, ES is now up about 140 points since the last VST buy signal…
The actual turn for this leg was sniffed out by bottom spotter signals on August 25th and I posted an update at the end of that day noting the bottom spotters and an unusual number of countertrend buy signals. That post can be reviewed by clicking here.
Since the subsequent pullback buy signal at 1035, the uptrend has relentlessly flipped each successive trend starting from the VST and then progressing through short-term, intermediate, and long-term until a fully-bullish Bull 10 configuration was indicated, and a trading range breakout was achieved > 1143.25.
This trending move has been a great illustration of what Stops and Targets does best—which is to ignore the news and noise and make completely logical strategy suggestions.
Nearly all of us humans struggle to reconcile our feelings and instincts with the reality of the markets. Stops and Targets is the best trading tool I have ever seen–as it really keeps a guy honest about assessment of the opportunities at hand.
It didn’t feel at all bullish when those bottom spotter signals triggered on August 25th, and it likely won’t feel at all bearish when the next top spotters signal.
I find it to be helpful to go back through this blog at key turn dates to reread what happened just before and just after key swing turn dates. Generally speaking, if I am doing things right, I will typically catch a trend change within a day or two of the actual swing high or swing low–and Stops and Targets is the primary weapon that I use to check against the other very short term techniques I employ, which vary depending upon the type of market at the time.
I have placed screenshots of the present Stops and Targets analysis tabs here to show what the market looks like during an extended trend and these tabs may be interesting for review at some later date, depending upon what happens going forward.
The best strategy here is to continue pushing trailing profit stops higher for existing ideal ES trades. The closest short-term partial stop location is at 1160.75 (see short term tab above) and the primary trend line is closing in at 1153.50.
I remain on the watch for signs of weakness in momentum that will eventually develop. Ideally, Stops and Targets will again sniff out the next swing turn with a corresponding set of spotter signals and countertrend sells like those that we saw on August 25th in the link above. If a top spotter signal develops at or before the next upside target is achieved, it will be visible intraday on the indexes and on individual equities on the multitrend tab. I would urge users to be very careful with those intraday spotter signals, though. Spotters only trigger at the close when the daily bar enters history and then confirm on a subsequent close. It is nice to see the intraday spotter setups (a new feature in Stops and Targets version 2.0), though. A clever countertrend trader can often enter very close to a turn using the daily high (in the case of a top spotter) as a hard stop should an intraday spotter develop and there is also an intraday invalidation number for very aggressive traders.
The present ideal trades at the time of the screen shots for Stops and Targets are…
ST = +111.75 points
IT = +98.50 points
LT = +105.25 points
It is hard to argue with those sorts of returns and for the discipline and trade management it represents.
Next target higher is 1203.25 on all three time frames. All trends remain up > 1153.50