On August 28 we posted an idea to our TradingView page and Telegram Channel highlighting the first sell signal on a daily time frame that we’ve seen from the Extreme Turn (Money Points) hybrid indicator in the S&P (/ES, SPY, SPX) since the March lows.
In the post, we highlighted that there was nothing bearish about the chart, but that markets will tend to “look” the most bullish (or bearish) at potential turning points. Of course, the look of the chart at the time had nothing to do with our reason for entry. It was just some color for the commentary. We bought put spreads because we had a short entry signal, the first in over 5 months as the title of the idea indicates.
At TDG, we use hybrid indicators and extensive backtesting, to determine indicator settings that make guessing or looking for signals, set-ups, and price areas of interest a simple process of waiting for software to tell us to do something. We do this because, you know, there is another adage that come sto mind. Looks can be deceiving. Oh so true in trading wouldn’t you say?
Here is the idea from TradingView along with all our exits and trade management from entry.
I SPY The First Extreme Turn Sell Signal Since the March Lows by TDGonTView on TradingView.com
We can keep this one pretty simple. It’s day #2 with an Extreme Turn sell/short on the SPY daily timeframe . The prior day was the first sell signal in the entire move since the March lows. There is absolutely nothing bearish looking in this chart. That said, we recall our adage at TDG – Markets’ always look the most bullish at the tops.
We’re expressing the signal with a $8 wide Bear Put – SPY SEP 340/332.
As always, our risk is 50% of the premium paid so we’re looking at risking about .60 to make $6+
Submitted Order Type Limit @ 1.15 Debit
Bought 15 SPY 09/18/20 Put 340.00 @ 3.03
Filled at: Aug 28, 2020 3:08:10 PM EDT
Sold 15 SPY 09/18/20 Put 332.00 @ 1.88
Filled at: Aug 28, 2020 3:08:10 PM EDT
We’ll see if our patience pays?
Sep 3 |Trade active: Scale partial $1.5
Sep 3 |Trade active: Scaling more $2.40 100%+ winner
Sep 3 |Comment: Keep in mind price is still not at the short strike.
Sep 5 | Trade closed: target reached: Late update given the very active trading Friday. Closed the remainder of position at $4.20cr. You said 420!
Trade Like You Mean It!
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