For Friday, July 31st

"The key to navigating bubbles successfully is to panic before everyone else does."

* * * John P. Hussmann, Ph.D.

A BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS can be found at the bottom of every email briefing for your easy quick reference and convenience, please take the time to review it every now and then, a good working knowledge of these tools will make you a better and more informed investor/trader...

The September SP Futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 7/27/15

The broader term intermediate trend (BTIT) bias is determined by the collective penetration of the most near term ceiling and floor prices... when ALL the near term ceiling prices have been penetrated on the close and none of the floor prices are penetrated, then the BTIT bias would be UP... when the reverse occurs, then the BTIT bias would be DOWN... the bias would turn to NEUTRAL when one or more of the ceiling/floor prices are penetrated on the close in the counter direction...

A close above 2121.91 would turn the BTIT from neutral to up...

A close below 2047.22 would turn the BTIT from neutral to down...

The main model is now long the September SP from 2082.60 as of Tuesday, July 28th...

The last trade as of this writing is at 2103.90...

For Friday, a close below 2100.90 in the September SP contract would confirm a new main model sell signal, otherwise remain long...

For Hoban Rule traders, you were stopped out of your long position in yesterday's overnight market at 2098.90, therefore you are currently flat this market... for this trade, you booked a 10.30 point profit without any effort, very nice... for tomorrow, enter a new short position with a close below 2100.90 but not below 2094.90...

Rationale:

There is a major VP at 2100.82, the market has traded above that price, therefore a close below this VP price would now be negative for this market...

Are you having difficulty finding an entry point for a new signal??? Consider the Hoban Rule, even a child could follow the simple rules... I use it myself...

The Hoban Rule will not catch all trades, but will also not incur any entry whips on the entry of any new main model signals... this reliable and profitable strategy is presented here with each briefing only as a possible strategy option, one can use any trading strategy or any combination of strategies with the Hoban Rule that fits one's personal trading disposition... please review some of the other trading strategies in the tutorial at the bottom of each and every evening briefing... the Hoban Rule can be used with any other additional trading strategies that fit your disposition and comfort level...

The Hoban Rule Performance History:

The Hoban Rule was introduced to the evening briefing on 9/4/14... since that time, this strategy has now completed 27 trades for a net gain of 258.30 SP points... this is a simple but elegant strategy for anyone who prefers a less challenging trade plan based on the main model signals... of course, past performance is never a guarantee of future success, but this particular trading strategy has an impressive history and is well worth considering if you have difficulty taking the best advantage of the main model signals... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator (the red line)

The NT indicator continues higher but not yet over bought...

image

The LT (Long Term) indicator

All key lines are now moving higher, including the red line... so far, so good...

image (1)
image (2)

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The following are the current upside VPs for the September SP... as long as the due date has not yet passed, the VP is still active and can effect these markets... the VP prices are presented exactly as the formula generates them even though the SP contract itself doesn't trade at that particular decimal point... please note, I may also include the VP prices that are well below the market because their deadline due dates have not yet expired...
minor - - 2082.61 (already reached)
MAJOR - - 2100.82 and must close below that price on Thursday, August 6th to confirm a new main model sell signal... (already reached)
minor - - 2128.99
minor - - 2129.41
MAJOR - - 2159.74 and must close below that price on Friday, September 11th to confirm a new main model sell signal...
MAJOR - - 2164.39 and must close below that price on Friday, August 28th to confirm a new main model sell signal...
TOMORROW'S HIGHEST CEILING FLOOR PRICE - - 2319.22
For now, the main model remains long the SP...

The AUGUST Gold futures
BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 6/24/15
This market need a close above 1135.30 to turn the BTIT bias from down to up... there is no price that would turn this market to neutral, it would change directly from down to up...
The main model is now short the August gold from 1092.00 as of Thursday, July 30th...

The last trade as of this writing is at 1086.80...

For Friday, a close above 1104.80 in the August Gold contract would confirm a new main model buy signal...

Today's close below the 1092.00 level is not positive for this market...

The Hoban Rule was expressly designed for the SP market and no other market at this time...

The LT (Long Term) Indicator

All key lines are pointing lower and we have sell spikes in both the blue and purple lines today... the blue line never left oversold territory and is now again moving lower... this is not constructive for this market...

image (3)
image (4)

The following are the current downside VPs for August gold...

minor - - 1091.907 (already reached)

miner - - 1070.13

MAJOR - - 1056.02 and must above that price on Thursday, August 20 to confirm a new main model buy signal...

MAJOR - - 530.11 (there is no typo) and must above that price on Thursday, January 14th 2021 (again, no typo) to confirm a new main model buy signal... yes, very odd...

This major VP is incredibly low and is also very far out in time, but this is what the main model is telling me for gold, so I'm providing the information...

TOMORROW'S LOWEST FLOOR PRICE - - 480.22 (no typo)

For now, the main model remains short gold...

BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS:

The SP confirmation close ALWAYS refers to the large contract 4:15 pm futures closing price... also, use only the large contract for all official main model signals, the mini contract will give you false signals...

The Confirmation Price

The confirmation price is a specific market price beyond which the market must close in order to confirm a new main model buy or sell signal... the confirmation price is not a top or bottom picker, it is not designed to get you into a new position right at, or near, the top or bottom tick... but rather, it tells you that the trend has more than likely changed direction with a high degree of reliability... as has been demonstrated with better than a 98% reliability, the confirmation price confirms that the market trend has legitimately changed direction and that a new trend has just begun... very often, a buy confirmation price may seem so far above the market that taking a new long position at that high level seems risky... the same can be said for taking a new short position at a sell confirmation price... but factually, these price points are the most ideal place to enter a new position since these confirmation prices occur where most people are likely to take new erroneous positions in the trend that is just ending... this is why the market moves so explosively after the price is confirmed, e.g., the new short holders are scrambling to cover or the new dip buyers are selling out rapidly...

The NT Indicator

The NT indicator is a near term (NT) indicator and is included in the evening briefings for the benefit of those who make counter trend trades... the NT buy and sell spikes are not main model buy and sell signals, these spikes are only very near term, although they could always develop into something more significant over the next few days... using a weather analogy, the buy/sell spikes are much like a developing low pressure area or a tropical wave, they do not indicate a fully blown hurricane, although it could eventually develop... if a fully blown hurricane actually does develop, then the main model signal itself would address that market action...

How To Read The NT Indicator

The best and safest time to take an NT signal is when the market has already trended for some time and is now approaching a VP price, especially a major VP, then the NT spike would indicate that the trend is likely to reverse since the market is already vulnerable at a VP price, the NT spike provides greater certainty for that counter trend trade...

The VP Price

The VP, or Vertical Price, is NOT a target, the market is not required or expected to reach any VP price... however, if reached, the VP price represents where the buying/selling has stretched to its maximum exhaustion point, at least temporarily, and a change in trend is very likely... VP prices behave like magnets, they attract the market price, and when the price touches the VP point, then the polarity reverses and repels price... all this market ever does is ping pong between VP prices...

The main model formula is specifically designed to determine precisely and to the exact market price where the market is most likely to reach complete buying and/or selling exhaustion, there is no guessing about it. This is why the market almost always backs away from those VP points after reaching them, at least for 10 to 12 points before resuming the trend... also, at those VP points, the market is the most vulnerable to a legitimate trend change. Therefore, when the market trades through those VP points and then backs away and closes on the other side of it again, there is a very high likelihood of a trend reversal at that time... these VP point are like magnets, they pull and attract the price until the VP is reached, and then upon reaching the VP it then reverses polarity and repels price... at that point, the market can back away and confirm a new trend signal or return to the VP and resume the original trend... this is where the main model determines the buy and sell confirmation prices...

The Floor/Ceiling Price

The floor price is always there in a down trend, the ceiling price is always there in an up trend... these specific prices are rarely mentioned because the market rarely reaches them... these are not VP prices but can be treated the same as a VP price except floor and ceiling prices change every day while the VP price does not... a close beyond the floor/ceiling price should be considered a second buy or sell confirmation signal...

How To Read The VP Price

If the market touches and then moves away from the VP very quickly and doesn't return, then this typically indicates a market reversal, but if the market moves away from the VP and then returns within a day or two, maybe sooner, then the move is not over and the market is likely to continue in its current trend... repeated visits to a VP suggests the move is not yet over...

A Suggestion On How To Enter A Position On A New Main Model Signal

One way to enter a new signal trade is to take only 1/3 position only after the market trades through the confirmation price by a few points... after that initial position is taken, let the market do what it does all day... then, late in the day, if the market is still confirming the signal, then add the second 1/3 position... and then, on the close take the final 1/3 position... your average entry price will be above/below the confirmation price but the whips will be significantly reduced... this is a method I use for myself very often...

Another way to enter a new position is to wait for the actual confirmation on the close, and then take the new position...

THE HOBAN RULE

The Hoban Rule is an exclusive proprietary trading strategy that uses the main model signals to trade the SP market only... using this strategy eliminates all whips and is recommended to be used by those who are not market savvy and/or nimble enough to trade free style...

To take the trade, these two prerequisite criteria must be met:

1) The closing price on confirmation day must be within 6 points of the confirmation price, and

2) The confirmation price for the next signal must be more than 5 points from the closing price of that day...

3) Also, you may enter the trade anytime after the signal is confirmed if the market comes back to within 5 points of the original signal confirmation price...

Since you don't yet know the confirmation price for the next signal at that moment, you can either take the trade if the closing price meets the first criteria, or wait for the evening briefing for that information... if you took the trade on the first criteria and the evening briefing reverse confirmation price does not satisfy the second criteria, then simply close out that trade... or, if you did not take the trade and the evening briefing satisfies the second criteria as well, then take the trade in the evening session or in the after hours market if you're trading a market ETF... or you can simply take the trade the following morning...

However, if the closing price is 6 points or more from the confirmation price, then do not take the trade at that time, just stay flat...

In order to take the trade when the closing price is 6 points or more from the confirmation price:

1) Place a limit order to enter the trade when/if the market moves within 5 points of the confirmation price...

To exit the trade:

1) Place an exit stop 2 points beyond the next buy/sell confirmation price... if filled, then stay flat and wait for the next new signal to be confirmed...

2) If the next new signal is confirmed, then begin again with step 1 using the two entry criteria to begin the next new trade position...

3) If the new signal is not confirmed, simply stay flat and wait for the next newly confirmed signal to begin the next trade at step 1, or simply re-enter the original position provided that the closing price that day is within 6 points of the original confirmation price and the reverse confirmation price is at least 5 points above that day's closing price...

4) Very often, you may find the second criteria is not met since the reverse confirmation price is less than 5 points above the closing price... but, on some occasions, a day or two later, the reverse confirmation price could actually move away from the market and would therefore meet the second criteria and subsequently satisfy both prerequisite criteria allowing for an entry provided that day's closing price is still no more than 6 points from the original main model confirmation price...

Applying The Hoban Rule for your trade positions based on the buy/sell confirmation prices as described above, you will find it easy to follow and with less stress than trying to catch the market while not knowing where it will actually close... and, also, all intraday entry whips are completely eliminated...

The Vertical Price Equilibrium Spread

This spread takes advantage of the unique relationship between related markets... this spread can be entered at any time, however to optimize and maximize the benefits of this spread, it should be entered at or near the major VP points... this spread generates profits regardless of market direction... if you would like a full explanation on how to benefit from this spread, then please ask me about it...

Rejected Buy/Sell Signals

Rejected buy and/or sell signals are typically followed by a sharp market move in the opposite direction the following day, this occurs as a general rule... a rejected sell signal is typically followed the next day by a sharp rally... as well, a rejected buy signal is typically followed the next day by a sharp decline... however, if the sharp rally/decline does not occur, then you can expect to see the market make another attempt at that buy/sell signal...

The Long Term (LT) Indicator

The long term (LT) indicator is a myriad of indicators that give you an X-ray view of the market internals and trend...

The green line = the closing price for the specific market

The red line = the confirmation line, the more dominant trend

The purple line = the early warning line

The blue line = the imminent warning line

The purple and blue lines crossing the red line gives you early and imminent warning of a possible change in trend direction...

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The email SUGGESTION BOX is always open and invites your ideas for improving and enhancing your email service, I enjoy hearing from you, many thanks...

NOTICE: I SEND OUT AN EMAIL EVERY WEEKDAY EVENING, IF YOU DO NOT RECEIVE ONE, PLEASE LET ME KNOW, THANKS...

For Thursday, July 30th

"The key to navigating bubbles successfully is to panic before everyone else does."

* * * John P. Hussmann, Ph.D.

A BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS can be found at the bottom of every email briefing for your easy quick reference and convenience, please take the time to review it every now and then, a good working knowledge of these tools will make you a better and more informed investor/trader...

The September SP Futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 7/27/15

The broader term intermediate trend (BTIT) bias is determined by the collective penetration of the most near term ceiling and floor prices... when ALL the near term ceiling prices have been penetrated on the close and none of the floor prices are penetrated, then the BTIT bias would be UP... when the reverse occurs, then the BTIT bias would be DOWN... the bias would turn to NEUTRAL when one or more of the ceiling/floor prices are penetrated on the close in the counter direction...

A close above 2122.68 would turn the BTIT from neutral to up...

A close below 2047.22 would turn the BTIT from neutral to down...

The main model is now long the September SP from 2082.60 as of Tuesday, July 28th...

The last trade as of this writing is at 2101.40...

For Thursday, a close below 2100.90 in the September SP contract would confirm a new main model sell signal, otherwise remain long...

For Hoban Rule traders, you are currently long as of last night at 2088.60 since the market rallied above that price overnight and then returned to fill the buy limit order at that price... for tomorrow and this evening, enter a sell stop to go flat at 2098.90... also for tomorrow, enter a new short position with a close below 2100.90 but not below 2094.90...

Rationale:

There is a major VP at 2100.82, the market has traded above that price, therefore a close below this VP price would now be negative for this market...

Are you having difficulty finding an entry point for a new signal??? Consider the Hoban Rule, even a child could follow the simple rules... I use it myself...

The Hoban Rule will not catch all trades, but will also not incur any entry whips on the entry of any new main model signals... this reliable and profitable strategy is presented here with each briefing only as a possible strategy option, one can use any trading strategy or any combination of strategies with the Hoban Rule that fits one's personal trading disposition... please review some of the other trading strategies in the tutorial at the bottom of each and every evening briefing... the Hoban Rule can be used with any other additional trading strategies that fit your disposition and comfort level...

The Hoban Rule Performance History:

The Hoban Rule was introduced to the evening briefing on 9/4/14... since that time, this strategy has now completed 26 trades for a net gain of 248.00 SP points... this is a simple but elegant strategy for anyone who prefers a less challenging trade plan based on the main model signals... of course, past performance is never a guarantee of future success, but this particular trading strategy has an impressive history and is well worth considering if you have difficulty taking the best advantage of the main model signals... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator (the red line)

The NT indicator is quickly moving into the over bought zone... however, no sell spike yet... mind you, we did reach a major VP today and the market closed above it... expect some near term turbulence at this current price level, this would be typical...

image

The LT (Long Term) indicator

Both the blue and purple lines are now above the red line which is now also moving higher... this is a bullish looking graph for now...

image (1)
image (2)

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The following are the current upside VPs for the September SP... as long as the due date has not yet passed, the VP is still active and can effect these markets... the VP prices are presented exactly as the formula generates them even though the SP contract itself doesn't trade at that particular decimal point... please note, I may also include the VP prices that are well below the market because their deadline due dates have not yet expired...
minor - - 2082.61 (already reached)
MAJOR - - 2100.82 and must close below that price on Thursday, August 6th to confirm a new main model sell signal... (already reached previously)
minor - - 2128.99
minor - - 2129.41
MAJOR - - 2159.74 and must close below that price on Friday, September 11th to confirm a new main model sell signal...
MAJOR - - 2164.39 and must close below that price on Friday, August 28th to confirm a new main model sell signal...
TOMORROW'S HIGHEST CEILING FLOOR PRICE - - 2319.22
For now, the main model remains long the SP...

The AUGUST Gold futures
BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 6/24/15
This market need a close above 1135.30 to turn the BTIT bias from down to up... there is no price that would turn this market to neutral, it would change directly from down to up...
The main model is now long the August gold from 1091.90 as of Friday, July 24th...

The last trade as of this writing is at 1095.70...

For Thursday, a close below 1092.00 in the August Gold contract would confirm a new main model sell signal...

Remember, 1091.907 is a long term minor VP as measured by the market action beginning with the key low made in October 2008, so this is not a near term minor VP... this is also why the major downside VP is so far down and not due for a good handful of years...

Remember this from last Thursday???

The following are the current downside VPs for August gold...

minor - - 1091.907 (already reached)

MAJOR - - 530.11 (there is no typo) and must close above that price on Thursday, January 14th 2021

Now that this market has rallied the standard 10 to 14 points from this minor VP, we do not want to see it close below it again...

The Hoban Rule was expressly designed for the SP market and no other market at this time...

The LT (Long Term) Indicator

This LT graph continues to looks positive... the only thing missing here is the rally... LOL!!!

image (3)
image (4)

The following are the current upside VPs for August gold...

MAJOR - - 1269.09 and must close below that price on Monday, September 28th to confirm a new main model sell signal...

MAJOR - - 1241.16 and must close below that price on Tuesday, September 22nd to confirm a new main model sell signal...

minor - - 1218.51

minor - - 1198.69

TOMORROW'S HIGHEST CEILING PRICE - - 1458.32

For now, the main model remains long gold...

BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS:

The SP confirmation close ALWAYS refers to the large contract 4:15 pm futures closing price... also, use only the large contract for all official main model signals, the mini contract will give you false signals...

The Confirmation Price

The confirmation price is a specific market price beyond which the market must close in order to confirm a new main model buy or sell signal... the confirmation price is not a top or bottom picker, it is not designed to get you into a new position right at, or near, the top or bottom tick... but rather, it tells you that the trend has more than likely changed direction with a high degree of reliability... as has been demonstrated with better than a 98% reliability, the confirmation price confirms that the market trend has legitimately changed direction and that a new trend has just begun... very often, a buy confirmation price may seem so far above the market that taking a new long position at that high level seems risky... the same can be said for taking a new short position at a sell confirmation price... but factually, these price points are the most ideal place to enter a new position since these confirmation prices occur where most people are likely to take new erroneous positions in the trend that is just ending... this is why the market moves so explosively after the price is confirmed, e.g., the new short holders are scrambling to cover or the new dip buyers are selling out rapidly...

The NT Indicator

The NT indicator is a near term (NT) indicator and is included in the evening briefings for the benefit of those who make counter trend trades... the NT buy and sell spikes are not main model buy and sell signals, these spikes are only very near term, although they could always develop into something more significant over the next few days... using a weather analogy, the buy/sell spikes are much like a developing low pressure area or a tropical wave, they do not indicate a fully blown hurricane, although it could eventually develop... if a fully blown hurricane actually does develop, then the main model signal itself would address that market action...

How To Read The NT Indicator

The best and safest time to take an NT signal is when the market has already trended for some time and is now approaching a VP price, especially a major VP, then the NT spike would indicate that the trend is likely to reverse since the market is already vulnerable at a VP price, the NT spike provides greater certainty for that counter trend trade...

The VP Price

The VP, or Vertical Price, is NOT a target, the market is not required or expected to reach any VP price... however, if reached, the VP price represents where the buying/selling has stretched to its maximum exhaustion point, at least temporarily, and a change in trend is very likely... VP prices behave like magnets, they attract the market price, and when the price touches the VP point, then the polarity reverses and repels price... all this market ever does is ping pong between VP prices...

The main model formula is specifically designed to determine precisely and to the exact market price where the market is most likely to reach complete buying and/or selling exhaustion, there is no guessing about it. This is why the market almost always backs away from those VP points after reaching them, at least for 10 to 12 points before resuming the trend... also, at those VP points, the market is the most vulnerable to a legitimate trend change. Therefore, when the market trades through those VP points and then backs away and closes on the other side of it again, there is a very high likelihood of a trend reversal at that time... these VP point are like magnets, they pull and attract the price until the VP is reached, and then upon reaching the VP it then reverses polarity and repels price... at that point, the market can back away and confirm a new trend signal or return to the VP and resume the original trend... this is where the main model determines the buy and sell confirmation prices...

The Floor/Ceiling Price

The floor price is always there in a down trend, the ceiling price is always there in an up trend... these specific prices are rarely mentioned because the market rarely reaches them... these are not VP prices but can be treated the same as a VP price except floor and ceiling prices change every day while the VP price does not... a close beyond the floor/ceiling price should be considered a second buy or sell confirmation signal...

How To Read The VP Price

If the market touches and then moves away from the VP very quickly and doesn't return, then this typically indicates a market reversal, but if the market moves away from the VP and then returns within a day or two, maybe sooner, then the move is not over and the market is likely to continue in its current trend... repeated visits to a VP suggests the move is not yet over...

A Suggestion On How To Enter A Position On A New Main Model Signal

One way to enter a new signal trade is to take only 1/3 position only after the market trades through the confirmation price by a few points... after that initial position is taken, let the market do what it does all day... then, late in the day, if the market is still confirming the signal, then add the second 1/3 position... and then, on the close take the final 1/3 position... your average entry price will be above/below the confirmation price but the whips will be significantly reduced... this is a method I use for myself very often...

Another way to enter a new position is to wait for the actual confirmation on the close, and then take the new position...

THE HOBAN RULE

The Hoban Rule is an exclusive proprietary trading strategy that uses the main model signals to trade the SP market only... using this strategy eliminates all whips and is recommended to be used by those who are not market savvy and/or nimble enough to trade free style...

To take the trade, these two prerequisite criteria must be met:

1) The closing price on confirmation day must be within 6 points of the confirmation price, and

2) The confirmation price for the next signal must be more than 5 points from the closing price of that day...

3) Also, you may enter the trade anytime after the signal is confirmed if the market comes back to within 5 points of the original signal confirmation price...

Since you don't yet know the confirmation price for the next signal at that moment, you can either take the trade if the closing price meets the first criteria, or wait for the evening briefing for that information... if you took the trade on the first criteria and the evening briefing reverse confirmation price does not satisfy the second criteria, then simply close out that trade... or, if you did not take the trade and the evening briefing satisfies the second criteria as well, then take the trade in the evening session or in the after hours market if you're trading a market ETF... or you can simply take the trade the following morning...

However, if the closing price is 6 points or more from the confirmation price, then do not take the trade at that time, just stay flat...

In order to take the trade when the closing price is 6 points or more from the confirmation price:

1) Place a limit order to enter the trade when/if the market moves within 5 points of the confirmation price...

To exit the trade:

1) Place an exit stop 2 points beyond the next buy/sell confirmation price... if filled, then stay flat and wait for the next new signal to be confirmed...

2) If the next new signal is confirmed, then begin again with step 1 using the two entry criteria to begin the next new trade position...

3) If the new signal is not confirmed, simply stay flat and wait for the next newly confirmed signal to begin the next trade at step 1, or simply re-enter the original position provided that the closing price that day is within 6 points of the original confirmation price and the reverse confirmation price is at least 5 points above that day's closing price...

4) Very often, you may find the second criteria is not met since the reverse confirmation price is less than 5 points above the closing price... but, on some occasions, a day or two later, the reverse confirmation price could actually move away from the market and would therefore meet the second criteria and subsequently satisfy both prerequisite criteria allowing for an entry provided that day's closing price is still no more than 6 points from the original main model confirmation price...

Applying The Hoban Rule for your trade positions based on the buy/sell confirmation prices as described above, you will find it easy to follow and with less stress than trying to catch the market while not knowing where it will actually close... and, also, all intraday entry whips are completely eliminated...

The Vertical Price Equilibrium Spread

This spread takes advantage of the unique relationship between related markets... this spread can be entered at any time, however to optimize and maximize the benefits of this spread, it should be entered at or near the major VP points... this spread generates profits regardless of market direction... if you would like a full explanation on how to benefit from this spread, then please ask me about it...

Rejected Buy/Sell Signals

Rejected buy and/or sell signals are typically followed by a sharp market move in the opposite direction the following day, this occurs as a general rule... a rejected sell signal is typically followed the next day by a sharp rally... as well, a rejected buy signal is typically followed the next day by a sharp decline... however, if the sharp rally/decline does not occur, then you can expect to see the market make another attempt at that buy/sell signal...

The Long Term (LT) Indicator

The long term (LT) indicator is a myriad of indicators that give you an X-ray view of the market internals and trend...

The green line = the closing price for the specific market

The red line = the confirmation line, the more dominant trend

The purple line = the early warning line

The blue line = the imminent warning line

The purple and blue lines crossing the red line gives you early and imminent warning of a possible change in trend direction...

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The email SUGGESTION BOX is always open and invites your ideas for improving and enhancing your email service, I enjoy hearing from you, many thanks...

NOTICE: I SEND OUT AN EMAIL EVERY WEEKDAY EVENING, IF YOU DO NOT RECEIVE ONE, PLEASE LET ME KNOW, THANKS...

For Wednesday, July 29th

"The key to navigating bubbles successfully is to panic before everyone else does."

* * * John P. Hussmann, Ph.D.

A BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS can be found at the bottom of every email briefing for your easy quick reference and convenience, please take the time to review it every now and then, a good working knowledge of these tools will make you a better and more informed investor/trader...

The September SP Futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 7/27/15

The broader term intermediate trend (BTIT) bias is determined by the collective penetration of the most near term ceiling and floor prices... when ALL the near term ceiling prices have been penetrated on the close and none of the floor prices are penetrated, then the BTIT bias would be UP... when the reverse occurs, then the BTIT bias would be DOWN... the bias would turn to NEUTRAL when one or more of the ceiling/floor prices are penetrated on the close in the counter direction...

A close above 2122.68 would turn the BTIT from neutral to up...

A close below 2047.22 would turn the BTIT from neutral to down...

The main model is now long the September SP from 2082.60 as of Tuesday, July 28th...

The last trade as of this writing is at 2087.50...

For Wednesday, a close below 2082.70 in the September SP contract would confirm a new main model sell signal, otherwise remain long...

For Hoban Rule traders, you are currently flat this market since the closing price is within 5 points (but just barely) of tomorrow's sell confirmation price... however, once the market rallies above 2088.60 at any time, then enter a buy limit order to go long at 2088.60 on a price pull back... if filled, then enter a sell stop to go flat at 2080.70... and also enter a new short position tomorrow with a close below 2082.70 but not below 2076.70...

@ 15:15.ET -- This Wednesday afternoon SP update supersedes ALL previous SP briefings... 

For Wednesday, a close below 2100.90 in the September SP contract would confirm a new main model sell signal, otherwise remain long...  the market is currently trading at 2102.40...

For Hoban Rule traders, you are currently long this market...  enter a sell stop to go flat at 2098.90...  also, enter a new short position with a close below 2100.90 but not below 2094.90...

Rationale:

There is a major VP at 2100.82, the market has traded above that price, therefore a close below this VP price would be negative for this market...

 

Are you having difficulty finding an entry point for a new signal??? Consider the Hoban Rule, even a child could follow the simple rules... I use it myself...

The Hoban Rule will not catch all trades, but will also not incur any entry whips on the entry of any new main model signals... this reliable and profitable strategy is presented here with each briefing only as a possible strategy option, one can use any trading strategy or any combination of strategies with the Hoban Rule that fits one's personal trading disposition... please review some of the other trading strategies in the tutorial at the bottom of each and every evening briefing... the Hoban Rule can be used with any other additional trading strategies that fit your disposition and comfort level...

The Hoban Rule Performance History:

The Hoban Rule was introduced to the evening briefing on 9/4/14... since that time, this strategy has now completed 26 trades for a net gain of 248.00 SP points... this is a simple but elegant strategy for anyone who prefers a less challenging trade plan based on the main model signals... of course, past performance is never a guarantee of future success, but this particular trading strategy has an impressive history and is well worth considering if you have difficulty taking the best advantage of the main model signals... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator (the red line)

A nice double buy spike along with a buy signal confirmation... this is encouraging...

image

The LT (Long Term) indicator

Sharp buy spike in deeply oversold territory for both the blue and purple lines, and the red line is exactly flat and even today at .00 so any up tick tomorrow should turn the red line higher...

image (1)
image (2)

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The following are the current upside VPs for the September SP... as long as the due date has not yet passed, the VP is still active and can effect these markets... the VP prices are presented exactly as the formula generates them even though the SP contract itself doesn't trade at that particular decimal point... please note, I may also include the VP prices that are well below the market because their deadline due dates have not yet expired...
minor - - 2082.61 (already reached)
MAJOR - - 2100.82 and must close below that price on Thursday, August 6th to confirm a new main model sell signal... (already reached previously)
minor - - 2128.99
minor - - 2129.41
MAJOR - - 2159.74 and must close below that price on Friday, September 11th to confirm a new main model sell signal...
MAJOR - - 2164.39 and must close below that price on Friday, August 28th to confirm a new main model sell signal...
TOMORROW'S HIGHEST CEILING FLOOR PRICE - - 2319.22
For now, the main model remains long the SP...

The AUGUST Gold futures
BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 6/24/15
This market need a close above 1135.30 to turn the BTIT bias from down to up... there is no price that would turn this market to neutral, it would change directly from down to up...
The main model is now long the August gold from 1091.90 as of Friday, July 24th...

The last trade as of this writing is at 1094.70...

For Wednesday, a close below 1092.00 in the August Gold contract would confirm a new main model sell signal...

Remember, 1091.907 is a long term minor VP as measured by the market action beginning with the key low made in October 2008, so this is not a near term minor VP... this is also why the major downside VP is so far down and not due for a good handful of years...

Remember this from last Thursday???

The following are the current downside VPs for August gold...

minor - - 1091.907 (already reached)

MAJOR - - 530.11 (there is no typo) and must close above that price on Thursday, January 14th 2021

Now that this market has rallied the standard 10 to 14 points from this minor VP, we do not want to see it close below it again...

The Hoban Rule was expressly designed for the SP market and no other market at this time...

The LT (Long Term) Indicator

The LT graph continues to look promising... the purple line is already above the red line before any rally begins, this is encouraging...

image (3)
image (4)

The following are the current upside VPs for August gold...

MAJOR - - 1269.09 and must close below that price on Monday, September 28th to confirm a new main model sell signal...

MAJOR - - 1241.16 and must close below that price on Tuesday, September 22nd to confirm a new main model sell signal...

minor - - 1218.51

minor - - 1198.69

TOMORROW'S HIGHEST CEILING PRICE - - 1458.32

For now, the main model remains long gold...

BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS:

The SP confirmation close ALWAYS refers to the large contract 4:15 pm futures closing price... also, use only the large contract for all official main model signals, the mini contract will give you false signals...

The Confirmation Price

The confirmation price is a specific market price beyond which the market must close in order to confirm a new main model buy or sell signal... the confirmation price is not a top or bottom picker, it is not designed to get you into a new position right at, or near, the top or bottom tick... but rather, it tells you that the trend has more than likely changed direction with a high degree of reliability... as has been demonstrated with better than a 98% reliability, the confirmation price confirms that the market trend has legitimately changed direction and that a new trend has just begun... very often, a buy confirmation price may seem so far above the market that taking a new long position at that high level seems risky... the same can be said for taking a new short position at a sell confirmation price... but factually, these price points are the most ideal place to enter a new position since these confirmation prices occur where most people are likely to take new erroneous positions in the trend that is just ending... this is why the market moves so explosively after the price is confirmed, e.g., the new short holders are scrambling to cover or the new dip buyers are selling out rapidly...

The NT Indicator

The NT indicator is a near term (NT) indicator and is included in the evening briefings for the benefit of those who make counter trend trades... the NT buy and sell spikes are not main model buy and sell signals, these spikes are only very near term, although they could always develop into something more significant over the next few days... using a weather analogy, the buy/sell spikes are much like a developing low pressure area or a tropical wave, they do not indicate a fully blown hurricane, although it could eventually develop... if a fully blown hurricane actually does develop, then the main model signal itself would address that market action...

How To Read The NT Indicator

The best and safest time to take an NT signal is when the market has already trended for some time and is now approaching a VP price, especially a major VP, then the NT spike would indicate that the trend is likely to reverse since the market is already vulnerable at a VP price, the NT spike provides greater certainty for that counter trend trade...

The VP Price

The VP, or Vertical Price, is NOT a target, the market is not required or expected to reach any VP price... however, if reached, the VP price represents where the buying/selling has stretched to its maximum exhaustion point, at least temporarily, and a change in trend is very likely... VP prices behave like magnets, they attract the market price, and when the price touches the VP point, then the polarity reverses and repels price... all this market ever does is ping pong between VP prices...

The main model formula is specifically designed to determine precisely and to the exact market price where the market is most likely to reach complete buying and/or selling exhaustion, there is no guessing about it. This is why the market almost always backs away from those VP points after reaching them, at least for 10 to 12 points before resuming the trend... also, at those VP points, the market is the most vulnerable to a legitimate trend change. Therefore, when the market trades through those VP points and then backs away and closes on the other side of it again, there is a very high likelihood of a trend reversal at that time... these VP point are like magnets, they pull and attract the price until the VP is reached, and then upon reaching the VP it then reverses polarity and repels price... at that point, the market can back away and confirm a new trend signal or return to the VP and resume the original trend... this is where the main model determines the buy and sell confirmation prices...

The Floor/Ceiling Price

The floor price is always there in a down trend, the ceiling price is always there in an up trend... these specific prices are rarely mentioned because the market rarely reaches them... these are not VP prices but can be treated the same as a VP price except floor and ceiling prices change every day while the VP price does not... a close beyond the floor/ceiling price should be considered a second buy or sell confirmation signal...

How To Read The VP Price

If the market touches and then moves away from the VP very quickly and doesn't return, then this typically indicates a market reversal, but if the market moves away from the VP and then returns within a day or two, maybe sooner, then the move is not over and the market is likely to continue in its current trend... repeated visits to a VP suggests the move is not yet over...

A Suggestion On How To Enter A Position On A New Main Model Signal

One way to enter a new signal trade is to take only 1/3 position only after the market trades through the confirmation price by a few points... after that initial position is taken, let the market do what it does all day... then, late in the day, if the market is still confirming the signal, then add the second 1/3 position... and then, on the close take the final 1/3 position... your average entry price will be above/below the confirmation price but the whips will be significantly reduced... this is a method I use for myself very often...

Another way to enter a new position is to wait for the actual confirmation on the close, and then take the new position...

THE HOBAN RULE

The Hoban Rule is an exclusive proprietary trading strategy that uses the main model signals to trade the SP market only... using this strategy eliminates all whips and is recommended to be used by those who are not market savvy and/or nimble enough to trade free style...

To take the trade, these two prerequisite criteria must be met:

1) The closing price on confirmation day must be within 6 points of the confirmation price, and

2) The confirmation price for the next signal must be more than 5 points from the closing price of that day...

3) Also, you may enter the trade anytime after the signal is confirmed if the market comes back to within 5 points of the original signal confirmation price...

Since you don't yet know the confirmation price for the next signal at that moment, you can either take the trade if the closing price meets the first criteria, or wait for the evening briefing for that information... if you took the trade on the first criteria and the evening briefing reverse confirmation price does not satisfy the second criteria, then simply close out that trade... or, if you did not take the trade and the evening briefing satisfies the second criteria as well, then take the trade in the evening session or in the after hours market if you're trading a market ETF... or you can simply take the trade the following morning...

However, if the closing price is 6 points or more from the confirmation price, then do not take the trade at that time, just stay flat...

In order to take the trade when the closing price is 6 points or more from the confirmation price:

1) Place a limit order to enter the trade when/if the market moves within 5 points of the confirmation price...

To exit the trade:

1) Place an exit stop 2 points beyond the next buy/sell confirmation price... if filled, then stay flat and wait for the next new signal to be confirmed...

2) If the next new signal is confirmed, then begin again with step 1 using the two entry criteria to begin the next new trade position...

3) If the new signal is not confirmed, simply stay flat and wait for the next newly confirmed signal to begin the next trade at step 1, or simply re-enter the original position provided that the closing price that day is within 6 points of the original confirmation price and the reverse confirmation price is at least 5 points above that day's closing price...

4) Very often, you may find the second criteria is not met since the reverse confirmation price is less than 5 points above the closing price... but, on some occasions, a day or two later, the reverse confirmation price could actually move away from the market and would therefore meet the second criteria and subsequently satisfy both prerequisite criteria allowing for an entry provided that day's closing price is still no more than 6 points from the original main model confirmation price...

Applying The Hoban Rule for your trade positions based on the buy/sell confirmation prices as described above, you will find it easy to follow and with less stress than trying to catch the market while not knowing where it will actually close... and, also, all intraday entry whips are completely eliminated...

The Vertical Price Equilibrium Spread

This spread takes advantage of the unique relationship between related markets... this spread can be entered at any time, however to optimize and maximize the benefits of this spread, it should be entered at or near the major VP points... this spread generates profits regardless of market direction... if you would like a full explanation on how to benefit from this spread, then please ask me about it...

Rejected Buy/Sell Signals

Rejected buy and/or sell signals are typically followed by a sharp market move in the opposite direction the following day, this occurs as a general rule... a rejected sell signal is typically followed the next day by a sharp rally... as well, a rejected buy signal is typically followed the next day by a sharp decline... however, if the sharp rally/decline does not occur, then you can expect to see the market make another attempt at that buy/sell signal...

The Long Term (LT) Indicator

The long term (LT) indicator is a myriad of indicators that give you an X-ray view of the market internals and trend...

The green line = the closing price for the specific market

The red line = the confirmation line, the more dominant trend

The purple line = the early warning line

The blue line = the imminent warning line

The purple and blue lines crossing the red line gives you early and imminent warning of a possible change in trend direction...

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The email SUGGESTION BOX is always open and invites your ideas for improving and enhancing your email service, I enjoy hearing from you, many thanks...

NOTICE: I SEND OUT AN EMAIL EVERY WEEKDAY EVENING, IF YOU DO NOT RECEIVE ONE, PLEASE LET ME KNOW, THANKS...

For Tuesday, July 28th

"The key to navigating bubbles successfully is to panic before everyone else does."

* * * John P. Hussmann, Ph.D.

A BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS can be found at the bottom of every email briefing for your easy quick reference and convenience, please take the time to review it every now and then, a good working knowledge of these tools will make you a better and more informed investor/trader...

The September SP Futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 7/27/15

The broader term intermediate trend (BTIT) bias is determined by the collective penetration of the most near term ceiling and floor prices... when ALL the near term ceiling prices have been penetrated on the close and none of the floor prices are penetrated, then the BTIT bias would be UP... when the reverse occurs, then the BTIT bias would be DOWN... the bias would turn to NEUTRAL when one or more of the ceiling/floor prices are penetrated on the close in the counter direction...

A close below 2047.22 will turn the BTIT from neutral to down...

The main model is now short the September SP from 2100.90 as of Thursday, July 23rd...

The last trade as of this writing is at 2062.40...

For Tuesday, a close above 2100.80 in the September SP contract would confirm a new main model buy signal...

For Hoban Rule traders, you are currently flat this market... for Tuesday, enter a sell limit order to go short at 2094.70... if filled, enter a buy stop to go flat at 2102.80... also, enter a new long position with a close above 2100.80 but not above 2106.80...

@ 11:45.ET -- This Tuesday morning SP update supersedes ALL previous SP briefings... 

For Tuesday, a close above 2082.60 in the September SP contract would confirm a new main model buy signal, otherwise remain short...  the market is currently trading at 2075.10...

For Hoban Rule traders, you are currently flat this market...  enter a new long position today with a close above 2082.60 but not above 2088.60...

Rationale:

 There is a minor VP at 2082.61, the market has traded below that price, therefore a close above this VP price would be bullish for this market...

Are you having difficulty finding an entry point for a new signal??? Consider the Hoban Rule, even a child could follow the simple rules... I use it myself...

The Hoban Rule will not catch all trades, but will also not incur any entry whips on the entry of any new main model signals... this reliable and profitable strategy is presented here with each briefing only as a possible strategy option, one can use any trading strategy or any combination of strategies with the Hoban Rule that fits one's personal trading disposition... please review some of the other trading strategies in the tutorial at the bottom of each and every evening briefing... the Hoban Rule can be used with any other additional trading strategies that fit your disposition and comfort level...

The Hoban Rule Performance History:

The Hoban Rule was introduced to the evening briefing on 9/4/14... since that time, this strategy has now completed 26 trades for a net gain of 248.00 SP points... this is a simple but elegant strategy for anyone who prefers a less challenging trade plan based on the main model signals... of course, past performance is never a guarantee of future success, but this particular trading strategy has an impressive history and is well worth considering if you have difficulty taking the best advantage of the main model signals... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator (the red line)

This market is clearly in neither over bought nor over sold territory right now...

image

The LT (Long Term) indicator

The LT graph looks more over sold than the NT indicator... this is unusual... this means this market is more over sold longer term and not yet near term over sold... this could indicate a highly spirited bounce or a good rally from here...

image (1)
image (2)

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The following are the current downside VPs for the September SP... as long as the due date has not yet passed, the VP is still active and can effect these markets... the VP prices are presented exactly as the formula generates them even though the SP contract itself doesn't trade at that particular decimal point... please note, I may also include the VP prices that are well below the market because their deadline due dates have not yet expired...
minor - - 2028.30
MAJOR - - 1990.13 and must close above that price on Monday, September 14th to confirm a new main model buy signal...
TOMORROW'S LOWEST FLOOR PRICE - - 1865.12
For now, the main model remains short the SP...

The AUGUST Gold futures
BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 6/24/15
This market need a close above 1135.30 to turn the BTIT bias from down to up... there is no price that would turn this market to neutral, it would change directly from down to up...
The main model is now long the August gold from 1091.90 as of Friday, July 24th...

The last trade as of this writing is at 1093.20...

For Tuesday, a close below 1092.00 in the August Gold contract would confirm a new main model sell signal...

Remember, 1091.907 is a long term minor VP as measured by the market action beginning with the key low made in October 2008, so this is not a near term minor VP... this is also why the major downside VP is so far down and not due for a good handful of years...

Remember this from last Thursday???

The following are the current downside VPs for August gold...

minor - - 1091.907 (already reached)

MAJOR - - 530.11 (there is no typo) and must close above that price on Thursday, January 14th 2021

Now that this market has rallied the standard 10 to 14 points from this minor VP, we do not want to see it close below it again...

The Hoban Rule was expressly designed for the SP market and no other market at this time...

The LT (Long Term) Indicator

The LT graph still appears hopeful, but today's market action showed absolutely no upside follow through after a buy confirmation... this is disappointing...

image (3)
image (4)

The following are the current upside VPs for August gold...

MAJOR - - 1269.09 and must close below that price on Monday, September 28th to confirm a new main model sell signal...

MAJOR - - 1241.16 and must close below that price on Tuesday, September 22nd to confirm a new main model sell signal...

minor - - 1218.51

minor - - 1198.69

TOMORROW'S HIGHEST CEILING PRICE - - 1458.32

For now, the main model remains long gold...

BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS:

The SP confirmation close ALWAYS refers to the large contract 4:15 pm futures closing price... also, use only the large contract for all official main model signals, the mini contract will give you false signals...

The Confirmation Price

The confirmation price is a specific market price beyond which the market must close in order to confirm a new main model buy or sell signal... the confirmation price is not a top or bottom picker, it is not designed to get you into a new position right at, or near, the top or bottom tick... but rather, it tells you that the trend has more than likely changed direction with a high degree of reliability... as has been demonstrated with better than a 98% reliability, the confirmation price confirms that the market trend has legitimately changed direction and that a new trend has just begun... very often, a buy confirmation price may seem so far above the market that taking a new long position at that high level seems risky... the same can be said for taking a new short position at a sell confirmation price... but factually, these price points are the most ideal place to enter a new position since these confirmation prices occur where most people are likely to take new erroneous positions in the trend that is just ending... this is why the market moves so explosively after the price is confirmed, e.g., the new short holders are scrambling to cover or the new dip buyers are selling out rapidly...

The NT Indicator

The NT indicator is a near term (NT) indicator and is included in the evening briefings for the benefit of those who make counter trend trades... the NT buy and sell spikes are not main model buy and sell signals, these spikes are only very near term, although they could always develop into something more significant over the next few days... using a weather analogy, the buy/sell spikes are much like a developing low pressure area or a tropical wave, they do not indicate a fully blown hurricane, although it could eventually develop... if a fully blown hurricane actually does develop, then the main model signal itself would address that market action...

How To Read The NT Indicator

The best and safest time to take an NT signal is when the market has already trended for some time and is now approaching a VP price, especially a major VP, then the NT spike would indicate that the trend is likely to reverse since the market is already vulnerable at a VP price, the NT spike provides greater certainty for that counter trend trade...

The VP Price

The VP, or Vertical Price, is NOT a target, the market is not required or expected to reach any VP price... however, if reached, the VP price represents where the buying/selling has stretched to its maximum exhaustion point, at least temporarily, and a change in trend is very likely... VP prices behave like magnets, they attract the market price, and when the price touches the VP point, then the polarity reverses and repels price... all this market ever does is ping pong between VP prices...

The main model formula is specifically designed to determine precisely and to the exact market price where the market is most likely to reach complete buying and/or selling exhaustion, there is no guessing about it. This is why the market almost always backs away from those VP points after reaching them, at least for 10 to 12 points before resuming the trend... also, at those VP points, the market is the most vulnerable to a legitimate trend change. Therefore, when the market trades through those VP points and then backs away and closes on the other side of it again, there is a very high likelihood of a trend reversal at that time... these VP point are like magnets, they pull and attract the price until the VP is reached, and then upon reaching the VP it then reverses polarity and repels price... at that point, the market can back away and confirm a new trend signal or return to the VP and resume the original trend... this is where the main model determines the buy and sell confirmation prices...

The Floor/Ceiling Price

The floor price is always there in a down trend, the ceiling price is always there in an up trend... these specific prices are rarely mentioned because the market rarely reaches them... these are not VP prices but can be treated the same as a VP price except floor and ceiling prices change every day while the VP price does not... a close beyond the floor/ceiling price should be considered a second buy or sell confirmation signal...

How To Read The VP Price

If the market touches and then moves away from the VP very quickly and doesn't return, then this typically indicates a market reversal, but if the market moves away from the VP and then returns within a day or two, maybe sooner, then the move is not over and the market is likely to continue in its current trend... repeated visits to a VP suggests the move is not yet over...

A Suggestion On How To Enter A Position On A New Main Model Signal

One way to enter a new signal trade is to take only 1/3 position only after the market trades through the confirmation price by a few points... after that initial position is taken, let the market do what it does all day... then, late in the day, if the market is still confirming the signal, then add the second 1/3 position... and then, on the close take the final 1/3 position... your average entry price will be above/below the confirmation price but the whips will be significantly reduced... this is a method I use for myself very often...

Another way to enter a new position is to wait for the actual confirmation on the close, and then take the new position...

THE HOBAN RULE

The Hoban Rule is an exclusive proprietary trading strategy that uses the main model signals to trade the SP market only... using this strategy eliminates all whips and is recommended to be used by those who are not market savvy and/or nimble enough to trade free style...

To take the trade, these two prerequisite criteria must be met:

1) The closing price on confirmation day must be within 6 points of the confirmation price, and

2) The confirmation price for the next signal must be more than 5 points from the closing price of that day...

3) Also, you may enter the trade anytime after the signal is confirmed if the market comes back to within 5 points of the original signal confirmation price...

Since you don't yet know the confirmation price for the next signal at that moment, you can either take the trade if the closing price meets the first criteria, or wait for the evening briefing for that information... if you took the trade on the first criteria and the evening briefing reverse confirmation price does not satisfy the second criteria, then simply close out that trade... or, if you did not take the trade and the evening briefing satisfies the second criteria as well, then take the trade in the evening session or in the after hours market if you're trading a market ETF... or you can simply take the trade the following morning...

However, if the closing price is 6 points or more from the confirmation price, then do not take the trade at that time, just stay flat...

In order to take the trade when the closing price is 6 points or more from the confirmation price:

1) Place a limit order to enter the trade when/if the market moves within 5 points of the confirmation price...

To exit the trade:

1) Place an exit stop 2 points beyond the next buy/sell confirmation price... if filled, then stay flat and wait for the next new signal to be confirmed...

2) If the next new signal is confirmed, then begin again with step 1 using the two entry criteria to begin the next new trade position...

3) If the new signal is not confirmed, simply stay flat and wait for the next newly confirmed signal to begin the next trade at step 1, or simply re-enter the original position provided that the closing price that day is within 6 points of the original confirmation price and the reverse confirmation price is at least 5 points above that day's closing price...

4) Very often, you may find the second criteria is not met since the reverse confirmation price is less than 5 points above the closing price... but, on some occasions, a day or two later, the reverse confirmation price could actually move away from the market and would therefore meet the second criteria and subsequently satisfy both prerequisite criteria allowing for an entry provided that day's closing price is still no more than 6 points from the original main model confirmation price...

Applying The Hoban Rule for your trade positions based on the buy/sell confirmation prices as described above, you will find it easy to follow and with less stress than trying to catch the market while not knowing where it will actually close... and, also, all intraday entry whips are completely eliminated...

The Vertical Price Equilibrium Spread

This spread takes advantage of the unique relationship between related markets... this spread can be entered at any time, however to optimize and maximize the benefits of this spread, it should be entered at or near the major VP points... this spread generates profits regardless of market direction... if you would like a full explanation on how to benefit from this spread, then please ask me about it...

Rejected Buy/Sell Signals

Rejected buy and/or sell signals are typically followed by a sharp market move in the opposite direction the following day, this occurs as a general rule... a rejected sell signal is typically followed the next day by a sharp rally... as well, a rejected buy signal is typically followed the next day by a sharp decline... however, if the sharp rally/decline does not occur, then you can expect to see the market make another attempt at that buy/sell signal...

The Long Term (LT) Indicator

The long term (LT) indicator is a myriad of indicators that give you an X-ray view of the market internals and trend...

The green line = the closing price for the specific market

The red line = the confirmation line, the more dominant trend

The purple line = the early warning line

The blue line = the imminent warning line

The purple and blue lines crossing the red line gives you early and imminent warning of a possible change in trend direction...

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The email SUGGESTION BOX is always open and invites your ideas for improving and enhancing your email service, I enjoy hearing from you, many thanks...

NOTICE: I SEND OUT AN EMAIL EVERY WEEKDAY EVENING, IF YOU DO NOT RECEIVE ONE, PLEASE LET ME KNOW, THANKS...

For Monday, July 27th

"The key to navigating bubbles successfully is to panic before everyone else does."

* * * John P. Hussmann, Ph.D.

A BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS can be found at the bottom of every email briefing for your easy quick reference and convenience, please take the time to review it every now and then, a good working knowledge of these tools will make you a better and more informed investor/trader...

The September SP Futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 7/16/15

The broader term intermediate trend (BTIT) bias is determined by the collective penetration of the most near term ceiling and floor prices... when ALL the near term ceiling prices have been penetrated on the close and none of the floor prices are penetrated, then the BTIT bias would be UP... when the reverse occurs, then the BTIT bias would be DOWN... the bias would turn to NEUTRAL when one or more of the ceiling/floor prices are penetrated on the close in the counter direction...

The BTIT would have turned from up to neutral today if the SP closed below 2070.70... today's low is 2069.70, and then the market moved higher and close above this floor price, this could trigger a rally on Monday... for Monday, a close below 2074.50 would turn the BTIT to the neutral position... meanwhile, the BTIT remains up for now...

The main model is now short the September SP from 2100.90 as of Thursday, July 23rd...

The last trade as of this writing is at 2077.10...

For Monday, a close above 2100.80 in the September SP contract would confirm a new main model buy signal...

For Hoban Rule traders, you are currently flat this market... for Monday, enter a sell limit order to go short at 2094.70... if filled, enter a buy stop to go flat at 2102.80... also, enter a new long position with a close above 2100.80 but not above 2106.80...

Are you having difficulty finding an entry point for a new signal??? Consider the Hoban Rule, even a child could follow the simple rules... I use it myself...

The Hoban Rule will not catch all trades, but will also not incur any entry whips on the entry of any new main model signals... this reliable and profitable strategy is presented here with each briefing only as a possible strategy option, one can use any trading strategy or any combination of strategies with the Hoban Rule that fits one's personal trading disposition... please review some of the other trading strategies in the tutorial at the bottom of each and every evening briefing... the Hoban Rule can be used with any other additional trading strategies that fit your disposition and comfort level...

The Hoban Rule Performance History:

The Hoban Rule was introduced to the evening briefing on 9/4/14... since that time, this strategy has now completed 26 trades for a net gain of 248.00 SP points... this is a simple but elegant strategy for anyone who prefers a less challenging trade plan based on the main model signals... of course, past performance is never a guarantee of future success, but this particular trading strategy has an impressive history and is well worth considering if you have difficulty taking the best advantage of the main model signals... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator (the red line)

The NT indicator has turned lower today... also, despite the considerable decline this market took today, this indicator is not yet oversold...

image

The LT (Long Term) indicator

For the LT graph, we can see both the blue and purple lines cross below the red line, and the red line is also now moving lower as of today... the trend bias for this indicator is clearly lower for now... and not yet oversold...

image (1)
image (2)

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The following are the current downside VPs for the September SP... as long as the due date has not yet passed, the VP is still active and can effect these markets... the VP prices are presented exactly as the formula generates them even though the SP contract itself doesn't trade at that particular decimal point... please note, I may also include the VP prices that are well below the market because their deadline due dates have not yet expired...
minor - - 2028.30
MAJOR - - 1990.13 and must close above that price on Monday, September 14th to confirm a new main model buy signal...
TOMORROW'S LOWEST FLOOR PRICE - - 1865.12
For now, the main model remains short the SP...

The AUGUST Gold futures
BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 6/24/15
This market need a close above 1135.30 to turn the BTIT bias from down to up... there is no price that would turn this market to neutral, it would change directly from down to up...
The main model is now long the August gold from 1091.90 as of Friday, July 24th...

The last trade as of this writing is at 1097.90...

For Monday, a close below 1089.50 in the August Gold contract would confirm a new main model sell signal...

The Hoban Rule was expressly designed for the SP market and no other market at this time...

The LT (Long Term) Indicator

The LT graph actually look promising for once... now that this market has everyone confused and frightened, it appears that we have an extremely oversold market with well defined buy spikes today in this graph, this supports the fact that while the market traded below the VP at 1091.907 it was also able to stage a respectable rally above that price and close with some conviction... so, all we need for Monday is a decent upside follow through or only a steady sideways pattern for a day or two before moving higher once again... so, we'll see what this market has in store...

Also, worthy of pointing out here, is that if you look closely at the graph, you can see the five previous major lows, all occurring within nearly a similar time span... in this graph, this would be the sixth major low, if this is the low at all...

image (3)
image (4)

The following are the current upside VPs for August gold...

MAJOR - - 1269.09 and must close below that price on Monday, September 28th to confirm a new main model sell signal...

MAJOR - - 1241.16 and must close below that price on Tuesday, September 22nd to confirm a new main model sell signal...

minor - - 1218.51

minor - - 1198.69

TOMORROW'S HIGHEST CEILING PRICE - - 1458.32

For now, the main model remains long gold...

BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS:

The SP confirmation close ALWAYS refers to the large contract 4:15 pm futures closing price... also, use only the large contract for all official main model signals, the mini contract will give you false signals...

The Confirmation Price

The confirmation price is a specific market price beyond which the market must close in order to confirm a new main model buy or sell signal... the confirmation price is not a top or bottom picker, it is not designed to get you into a new position right at, or near, the top or bottom tick... but rather, it tells you that the trend has more than likely changed direction with a high degree of reliability... as has been demonstrated with better than a 98% reliability, the confirmation price confirms that the market trend has legitimately changed direction and that a new trend has just begun... very often, a buy confirmation price may seem so far above the market that taking a new long position at that high level seems risky... the same can be said for taking a new short position at a sell confirmation price... but factually, these price points are the most ideal place to enter a new position since these confirmation prices occur where most people are likely to take new erroneous positions in the trend that is just ending... this is why the market moves so explosively after the price is confirmed, e.g., the new short holders are scrambling to cover or the new dip buyers are selling out rapidly...

The NT Indicator

The NT indicator is a near term (NT) indicator and is included in the evening briefings for the benefit of those who make counter trend trades... the NT buy and sell spikes are not main model buy and sell signals, these spikes are only very near term, although they could always develop into something more significant over the next few days... using a weather analogy, the buy/sell spikes are much like a developing low pressure area or a tropical wave, they do not indicate a fully blown hurricane, although it could eventually develop... if a fully blown hurricane actually does develop, then the main model signal itself would address that market action...

How To Read The NT Indicator

The best and safest time to take an NT signal is when the market has already trended for some time and is now approaching a VP price, especially a major VP, then the NT spike would indicate that the trend is likely to reverse since the market is already vulnerable at a VP price, the NT spike provides greater certainty for that counter trend trade...

The VP Price

The VP, or Vertical Price, is NOT a target, the market is not required or expected to reach any VP price... however, if reached, the VP price represents where the buying/selling has stretched to its maximum exhaustion point, at least temporarily, and a change in trend is very likely... VP prices behave like magnets, they attract the market price, and when the price touches the VP point, then the polarity reverses and repels price... all this market ever does is ping pong between VP prices...

The main model formula is specifically designed to determine precisely and to the exact market price where the market is most likely to reach complete buying and/or selling exhaustion, there is no guessing about it. This is why the market almost always backs away from those VP points after reaching them, at least for 10 to 12 points before resuming the trend... also, at those VP points, the market is the most vulnerable to a legitimate trend change. Therefore, when the market trades through those VP points and then backs away and closes on the other side of it again, there is a very high likelihood of a trend reversal at that time... these VP point are like magnets, they pull and attract the price until the VP is reached, and then upon reaching the VP it then reverses polarity and repels price... at that point, the market can back away and confirm a new trend signal or return to the VP and resume the original trend... this is where the main model determines the buy and sell confirmation prices...

The Floor/Ceiling Price

The floor price is always there in a down trend, the ceiling price is always there in an up trend... these specific prices are rarely mentioned because the market rarely reaches them... these are not VP prices but can be treated the same as a VP price except floor and ceiling prices change every day while the VP price does not... a close beyond the floor/ceiling price should be considered a second buy or sell confirmation signal...

How To Read The VP Price

If the market touches and then moves away from the VP very quickly and doesn't return, then this typically indicates a market reversal, but if the market moves away from the VP and then returns within a day or two, maybe sooner, then the move is not over and the market is likely to continue in its current trend... repeated visits to a VP suggests the move is not yet over...

A Suggestion On How To Enter A Position On A New Main Model Signal

One way to enter a new signal trade is to take only 1/3 position only after the market trades through the confirmation price by a few points... after that initial position is taken, let the market do what it does all day... then, late in the day, if the market is still confirming the signal, then add the second 1/3 position... and then, on the close take the final 1/3 position... your average entry price will be above/below the confirmation price but the whips will be significantly reduced... this is a method I use for myself very often...

Another way to enter a new position is to wait for the actual confirmation on the close, and then take the new position...

THE HOBAN RULE

The Hoban Rule is an exclusive proprietary trading strategy that uses the main model signals to trade the SP market only... using this strategy eliminates all whips and is recommended to be used by those who are not market savvy and/or nimble enough to trade free style...

To take the trade, these two prerequisite criteria must be met:

1) The closing price on confirmation day must be within 6 points of the confirmation price, and

2) The confirmation price for the next signal must be more than 5 points from the closing price of that day...

3) Also, you may enter the trade anytime after the signal is confirmed if the market comes back to within 5 points of the original signal confirmation price...

Since you don't yet know the confirmation price for the next signal at that moment, you can either take the trade if the closing price meets the first criteria, or wait for the evening briefing for that information... if you took the trade on the first criteria and the evening briefing reverse confirmation price does not satisfy the second criteria, then simply close out that trade... or, if you did not take the trade and the evening briefing satisfies the second criteria as well, then take the trade in the evening session or in the after hours market if you're trading a market ETF... or you can simply take the trade the following morning...

However, if the closing price is 6 points or more from the confirmation price, then do not take the trade at that time, just stay flat...

In order to take the trade when the closing price is 6 points or more from the confirmation price:

1) Place a limit order to enter the trade when/if the market moves within 5 points of the confirmation price...

To exit the trade:

1) Place an exit stop 2 points beyond the next buy/sell confirmation price... if filled, then stay flat and wait for the next new signal to be confirmed...

2) If the next new signal is confirmed, then begin again with step 1 using the two entry criteria to begin the next new trade position...

3) If the new signal is not confirmed, simply stay flat and wait for the next newly confirmed signal to begin the next trade at step 1, or simply re-enter the original position provided that the closing price that day is within 6 points of the original confirmation price and the reverse confirmation price is at least 5 points above that day's closing price...

4) Very often, you may find the second criteria is not met since the reverse confirmation price is less than 5 points above the closing price... but, on some occasions, a day or two later, the reverse confirmation price could actually move away from the market and would therefore meet the second criteria and subsequently satisfy both prerequisite criteria allowing for an entry provided that day's closing price is still no more than 6 points from the original main model confirmation price...

Applying The Hoban Rule for your trade positions based on the buy/sell confirmation prices as described above, you will find it easy to follow and with less stress than trying to catch the market while not knowing where it will actually close... and, also, all intraday entry whips are completely eliminated...

The Vertical Price Equilibrium Spread

This spread takes advantage of the unique relationship between related markets... this spread can be entered at any time, however to optimize and maximize the benefits of this spread, it should be entered at or near the major VP points... this spread generates profits regardless of market direction... if you would like a full explanation on how to benefit from this spread, then please ask me about it...

Rejected Buy/Sell Signals

Rejected buy and/or sell signals are typically followed by a sharp market move in the opposite direction the following day, this occurs as a general rule... a rejected sell signal is typically followed the next day by a sharp rally... as well, a rejected buy signal is typically followed the next day by a sharp decline... however, if the sharp rally/decline does not occur, then you can expect to see the market make another attempt at that buy/sell signal...

The Long Term (LT) Indicator

The long term (LT) indicator is a myriad of indicators that give you an X-ray view of the market internals and trend...

The green line = the closing price for the specific market

The red line = the confirmation line, the more dominant trend

The purple line = the early warning line

The blue line = the imminent warning line

The purple and blue lines crossing the red line gives you early and imminent warning of a possible change in trend direction...

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The email SUGGESTION BOX is always open and invites your ideas for improving and enhancing your email service, I enjoy hearing from you, many thanks...

NOTICE: I SEND OUT AN EMAIL EVERY WEEKDAY EVENING, IF YOU DO NOT RECEIVE ONE, PLEASE LET ME KNOW, THANKS...

For Friday, July 24th

"The key to navigating bubbles successfully is to panic before everyone else does."

* * * John P. Hussmann, Ph.D.

A BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS can be found at the bottom of every email briefing for your easy quick reference and convenience, please take the time to review it every now and then, a good working knowledge of these tools will make you a better and more informed investor/trader...

The September SP Futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 7/16/15

The broader term intermediate trend (BTIT) bias is determined by the collective penetration of the most near term ceiling and floor prices... when ALL the near term ceiling prices have been penetrated on the close and none of the floor prices are penetrated, then the BTIT bias would be UP... when the reverse occurs, then the BTIT bias would be DOWN... the bias would turn to NEUTRAL when one or more of the ceiling/floor prices are penetrated on the close in the counter direction...

The main model is now short the September SP from 2100.90 as of Thursday, July 23rd...

The last trade as of this writing is at 2098.60...

For Friday, a close above 2100.80 in the September SP contract would confirm a new main model buy signal...

For Hoban Rule traders, you are currently flat this market... although the market closed within the 6 point window, tomorrow's reverse point is less that 5 points away, this means you would not take this trade... enter a new long position with a close above 2100.80 but not above 2106.80...

Are you having difficulty finding an entry point for a new signal??? Consider the Hoban Rule, even a child could follow the simple rules... I use it myself...

The Hoban Rule will not catch all trades, but will also not incur any entry whips on the entry of any new main model signals... this reliable and profitable strategy is presented here with each briefing only as a possible strategy option, one can use any trading strategy or any combination of strategies with the Hoban Rule that fits one's personal trading disposition... please review some of the other trading strategies in the tutorial at the bottom of each and every evening briefing... the Hoban Rule can be used with any other additional trading strategies that fit your disposition and comfort level...

The Hoban Rule Performance History:

The Hoban Rule was introduced to the evening briefing on 9/4/14... since that time, this strategy has now completed 26 trades for a net gain of 248.00 SP points... this is a simple but elegant strategy for anyone who prefers a less challenging trade plan based on the main model signals... of course, past performance is never a guarantee of future success, but this particular trading strategy has an impressive history and is well worth considering if you have difficulty taking the best advantage of the main model signals... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator (the red line)

Even with a lower market today, the NT buy spike beginning from neutral territory continues higher...

image

The LT (Long Term) indicator

And again as yesterday, and contrary to the NT indicator, the LT graph continues with its sell spike which began in deeply over bought territory...

image (1)
image (2)

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The following are the current downside VPs for the September SP... as long as the due date has not yet passed, the VP is still active and can effect these markets... the VP prices are presented exactly as the formula generates them even though the SP contract itself doesn't trade at that particular decimal point... please note, I may also include the VP prices that are well below the market because their deadline due dates have not yet expired...
minor - - 2028.30
MAJOR - - 1990.13 and must close above that price on Monday, September 14th to confirm a new main model buy signal...
TOMORROW'S LOWEST FLOOR PRICE - - 1865.12
For now, the main model remains short the SP...

The AUGUST Gold futures
BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 6/24/15
The main model is now short the August gold from 1092.00 as of Thursday, July 23rd...

The last trade as of this writing is at 1088.30...

For Friday, a close above 1091.90 in the August Gold contract would confirm a new main model buy signal...

The Hoban Rule was expressly designed for the SP market and no other market at this time...

The LT (Long Term) Indicator

The blue line continues lower into deeply over sold territory while the purple line gives us a clear buy spike today... if this market doesn't just collapse overnight, then it could still be trying to form a launching base from here...

image (3)
image (4)

The following are the current downside VPs for August gold...

minor - - 1091.907 (already reached)

MAJOR - - 530.11 (there is no typo) and must above that price on Thursday, January 14th 2021 (again, no typo) to confirm a new main model buy signal... yes, very odd...

This major VP is incredibly low and is also very far out in time, but this is what the main model is telling me for gold, so I'm providing the information...

TOMORROW'S LOWEST FLOOR PRICE - - 480.22 (no typo)

For now, the main model remains short gold...

BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS:

The SP confirmation close ALWAYS refers to the large contract 4:15 pm futures closing price... also, use only the large contract for all official main model signals, the mini contract will give you false signals...

The Confirmation Price

The confirmation price is a specific market price beyond which the market must close in order to confirm a new main model buy or sell signal... the confirmation price is not a top or bottom picker, it is not designed to get you into a new position right at, or near, the top or bottom tick... but rather, it tells you that the trend has more than likely changed direction with a high degree of reliability... as has been demonstrated with better than a 98% reliability, the confirmation price confirms that the market trend has legitimately changed direction and that a new trend has just begun... very often, a buy confirmation price may seem so far above the market that taking a new long position at that high level seems risky... the same can be said for taking a new short position at a sell confirmation price... but factually, these price points are the most ideal place to enter a new position since these confirmation prices occur where most people are likely to take new erroneous positions in the trend that is just ending... this is why the market moves so explosively after the price is confirmed, e.g., the new short holders are scrambling to cover or the new dip buyers are selling out rapidly...

The NT Indicator

The NT indicator is a near term (NT) indicator and is included in the evening briefings for the benefit of those who make counter trend trades... the NT buy and sell spikes are not main model buy and sell signals, these spikes are only very near term, although they could always develop into something more significant over the next few days... using a weather analogy, the buy/sell spikes are much like a developing low pressure area or a tropical wave, they do not indicate a fully blown hurricane, although it could eventually develop... if a fully blown hurricane actually does develop, then the main model signal itself would address that market action...

How To Read The NT Indicator

The best and safest time to take an NT signal is when the market has already trended for some time and is now approaching a VP price, especially a major VP, then the NT spike would indicate that the trend is likely to reverse since the market is already vulnerable at a VP price, the NT spike provides greater certainty for that counter trend trade...

The VP Price

The VP, or Vertical Price, is NOT a target, the market is not required or expected to reach any VP price... however, if reached, the VP price represents where the buying/selling has stretched to its maximum exhaustion point, at least temporarily, and a change in trend is very likely... VP prices behave like magnets, they attract the market price, and when the price touches the VP point, then the polarity reverses and repels price... all this market ever does is ping pong between VP prices...

The main model formula is specifically designed to determine precisely and to the exact market price where the market is most likely to reach complete buying and/or selling exhaustion, there is no guessing about it. This is why the market almost always backs away from those VP points after reaching them, at least for 10 to 12 points before resuming the trend... also, at those VP points, the market is the most vulnerable to a legitimate trend change. Therefore, when the market trades through those VP points and then backs away and closes on the other side of it again, there is a very high likelihood of a trend reversal at that time... these VP point are like magnets, they pull and attract the price until the VP is reached, and then upon reaching the VP it then reverses polarity and repels price... at that point, the market can back away and confirm a new trend signal or return to the VP and resume the original trend... this is where the main model determines the buy and sell confirmation prices...

The Floor/Ceiling Price

The floor price is always there in a down trend, the ceiling price is always there in an up trend... these specific prices are rarely mentioned because the market rarely reaches them... these are not VP prices but can be treated the same as a VP price except floor and ceiling prices change every day while the VP price does not... a close beyond the floor/ceiling price should be considered a second buy or sell confirmation signal...

How To Read The VP Price

If the market touches and then moves away from the VP very quickly and doesn't return, then this typically indicates a market reversal, but if the market moves away from the VP and then returns within a day or two, maybe sooner, then the move is not over and the market is likely to continue in its current trend... repeated visits to a VP suggests the move is not yet over...

A Suggestion On How To Enter A Position On A New Main Model Signal

One way to enter a new signal trade is to take only 1/3 position only after the market trades through the confirmation price by a few points... after that initial position is taken, let the market do what it does all day... then, late in the day, if the market is still confirming the signal, then add the second 1/3 position... and then, on the close take the final 1/3 position... your average entry price will be above/below the confirmation price but the whips will be significantly reduced... this is a method I use for myself very often...

Another way to enter a new position is to wait for the actual confirmation on the close, and then take the new position...

THE HOBAN RULE

The Hoban Rule is an exclusive proprietary trading strategy that uses the main model signals to trade the SP market only... using this strategy eliminates all whips and is recommended to be used by those who are not market savvy and/or nimble enough to trade free style...

To take the trade, these two prerequisite criteria must be met:

1) The closing price on confirmation day must be within 6 points of the confirmation price, and

2) The confirmation price for the next signal must be more than 5 points from the closing price of that day...

3) Also, you may enter the trade anytime after the signal is confirmed if the market comes back to within 5 points of the original signal confirmation price...

Since you don't yet know the confirmation price for the next signal at that moment, you can either take the trade if the closing price meets the first criteria, or wait for the evening briefing for that information... if you took the trade on the first criteria and the evening briefing reverse confirmation price does not satisfy the second criteria, then simply close out that trade... or, if you did not take the trade and the evening briefing satisfies the second criteria as well, then take the trade in the evening session or in the after hours market if you're trading a market ETF... or you can simply take the trade the following morning...

However, if the closing price is 6 points or more from the confirmation price, then do not take the trade at that time, just stay flat...

In order to take the trade when the closing price is 6 points or more from the confirmation price:

1) Place a limit order to enter the trade when/if the market moves within 5 points of the confirmation price...

To exit the trade:

1) Place an exit stop 2 points beyond the next buy/sell confirmation price... if filled, then stay flat and wait for the next new signal to be confirmed...

2) If the next new signal is confirmed, then begin again with step 1 using the two entry criteria to begin the next new trade position...

3) If the new signal is not confirmed, simply stay flat and wait for the next newly confirmed signal to begin the next trade at step 1, or simply re-enter the original position provided that the closing price that day is within 6 points of the original confirmation price and the reverse confirmation price is at least 5 points above that day's closing price...

4) Very often, you may find the second criteria is not met since the reverse confirmation price is less than 5 points above the closing price... but, on some occasions, a day or two later, the reverse confirmation price could actually move away from the market and would therefore meet the second criteria and subsequently satisfy both prerequisite criteria allowing for an entry provided that day's closing price is still no more than 6 points from the original main model confirmation price...

Applying The Hoban Rule for your trade positions based on the buy/sell confirmation prices as described above, you will find it easy to follow and with less stress than trying to catch the market while not knowing where it will actually close... and, also, all intraday entry whips are completely eliminated...

The Vertical Price Equilibrium Spread

This spread takes advantage of the unique relationship between related markets... this spread can be entered at any time, however to optimize and maximize the benefits of this spread, it should be entered at or near the major VP points... this spread generates profits regardless of market direction... if you would like a full explanation on how to benefit from this spread, then please ask me about it...

Rejected Buy/Sell Signals

Rejected buy and/or sell signals are typically followed by a sharp market move in the opposite direction the following day, this occurs as a general rule... a rejected sell signal is typically followed the next day by a sharp rally... as well, a rejected buy signal is typically followed the next day by a sharp decline... however, if the sharp rally/decline does not occur, then you can expect to see the market make another attempt at that buy/sell signal...

The Long Term (LT) Indicator

The long term (LT) indicator is a myriad of indicators that give you an X-ray view of the market internals and trend...

The green line = the closing price for the specific market

The red line = the confirmation line, the more dominant trend

The purple line = the early warning line

The blue line = the imminent warning line

The purple and blue lines crossing the red line gives you early and imminent warning of a possible change in trend direction...

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The email SUGGESTION BOX is always open and invites your ideas for improving and enhancing your email service, I enjoy hearing from you, many thanks...

NOTICE: I SEND OUT AN EMAIL EVERY WEEKDAY EVENING, IF YOU DO NOT RECEIVE ONE, PLEASE LET ME KNOW, THANKS...

For Thursday, July 23rd

"The key to navigating bubbles successfully is to panic before everyone else does."

* * * John P. Hussmann, Ph.D.

A BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS can be found at the bottom of every email briefing for your easy quick reference and convenience, please take the time to review it every now and then, a good working knowledge of these tools will make you a better and more informed investor/trader...

The September SP Futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 7/16/15

The broader term intermediate trend (BTIT) bias is determined by the collective penetration of the most near term ceiling and floor prices... when ALL the near term ceiling prices have been penetrated on the close and none of the floor prices are penetrated, then the BTIT bias would be UP... when the reverse occurs, then the BTIT bias would be DOWN... the bias would turn to NEUTRAL when one or more of the ceiling/floor prices are penetrated on the close in the counter direction...

The main model is now Long the September SP from 2060.30 as of Friday, July 10th...

The last trade as of this writing is at 2109.10...

What a boring market...

Providing two possible strategies in the evening briefing eliminates the need for the occasional mid day updates which is so often missed during your busy mid day activities...

Strategy 1 for Thursday

For Thursday, a close below 2100.90 in the September SP contract would confirm a new main model sell signal, otherwise remain long...

For Hoban Rule traders, you are currently flat this market... enter a new short position with a close below 2100.90 but not below 2094.90...

Rationale:

There is a major VP today at 2100.82 which is now below the market, a close below this VP price tomorrow would be negative for this market...

Strategy 2 for Thursday

If the market trades above 2128.90 and then closes below 2129.00, this would also confirm a new main model sell signal...

Rationale:

We have a minor VP which stands at 2128.99... if the market trades above this ceiling price and then closes below it, this has negative connotations for this market moving forward...

If strategy 2 occurs, then for Hoban Rule traders, enter a new short position with a close below 2129.00 but not below 2123.00... this entry strategy is only if the market does trade above the 2128.99 VP for tomorrow and then closes below it... if the market does not trade above this VP price, then use strategy 1...

Are you having difficulty finding an entry point for a new signal??? Consider the Hoban Rule, even a child could follow the simple rules... I use it myself...

The Hoban Rule will not catch all trades, but will also not incur any entry whips on the entry of any new main model signals... this reliable and profitable strategy is presented here with each briefing only as a possible strategy option, one can use any trading strategy or any combination of strategies with the Hoban Rule that fits one's personal trading disposition... please review some of the other trading strategies in the tutorial at the bottom of each and every evening briefing... the Hoban Rule can be used with any other additional trading strategies that fit your disposition and comfort level...

The Hoban Rule Performance History:

The Hoban Rule was introduced to the evening briefing on 9/4/14... since that time, this strategy has now completed 26 trades for a net gain of 248.00 SP points... this is a simple but elegant strategy for anyone who prefers a less challenging trade plan based on the main model signals... of course, past performance is never a guarantee of future success, but this particular trading strategy has an impressive history and is well worth considering if you have difficulty taking the best advantage of the main model signals... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator (the red line)

The buy spike from neutral territory continues higher today...

image

The LT (Long Term) indicator

And again, contrary to the NT indicator, the sell spikes from deeply over bought territory continues lower today for the LT graph...

image (1)
image (2)

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The following are the current upside VPs for the September SP... as long as the due date has not yet passed, the VP is still active and can effect these markets... the VP prices are presented exactly as the formula generates them even though the SP contract itself doesn't trade at that particular decimal point... please note, I may also include the VP prices that are well below the market because their deadline due dates have not yet expired...
minor - - 2082.61 (already reached)
MAJOR - - 2100.82 and must close below that price on Thursday, August 6th to confirm a new main model sell signal... (already reached)
minor - - 2128.99
MAJOR - - 2164.39 and must close below that price on Friday, August 28th to confirm a new main model sell signal...
TOMORROW'S HIGHEST CEILING FLOOR PRICE - - 2319.22
For now, the main model remains long the SP...

The AUGUST Gold futures
BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 6/24/15
The main model is now long the August gold from 1091.90 as of Wednesday, July 22nd...

The last trade as of this writing is at 1092.60...

For Thursday, a close below 1081.00 in the August Gold contract would confirm a new main model sell signal...

@ 1345.ET - This Thursday mid day gold update supersedes ALL previous gold briefings... 

For Thursday, a close below 1092.00 in the August Gold contract would confirm a new main model sell signal...    August gold is currently trading at 1094.10...

Rationale:  A major VP developed Wednesday morning at 1091.907, therefor a close above that price yesterday confirmed a new main model buy signal...  however, the market rallied the typical 10 to 12 points and is now revisiting this VP...  therefore, a close below this VP at any time would indicate the selling is likely to resume...

The Hoban Rule was expressly designed for the SP market and no other market at this time...

The LT (Long Term) Indicator

This is interesting... the blue line has turned a touch lower while the purple line turned higher today and giving a buy spike in deeply over sold territory... all we need now is a good rally to get away from these lows...

image (3)
image (4)

The following are the current upside VPs for August gold...

MAJOR - - 1269.09 and must close below that price on Monday, September 28th to confirm a new main model sell signal...

MAJOR - - 1241.16 and must close below that price on Tuesday, September 22nd to confirm a new main model sell signal...

minor - - 1218.51

minor - - 1198.69

TOMORROW'S HIGHEST CEILING PRICE - - 1458.32

For now, the main model remains long gold...

BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS:

The SP confirmation close ALWAYS refers to the large contract 4:15 pm futures closing price... also, use only the large contract for all official main model signals, the mini contract will give you false signals...

The Confirmation Price

The confirmation price is a specific market price beyond which the market must close in order to confirm a new main model buy or sell signal... the confirmation price is not a top or bottom picker, it is not designed to get you into a new position right at, or near, the top or bottom tick... but rather, it tells you that the trend has more than likely changed direction with a high degree of reliability... as has been demonstrated with better than a 98% reliability, the confirmation price confirms that the market trend has legitimately changed direction and that a new trend has just begun... very often, a buy confirmation price may seem so far above the market that taking a new long position at that high level seems risky... the same can be said for taking a new short position at a sell confirmation price... but factually, these price points are the most ideal place to enter a new position since these confirmation prices occur where most people are likely to take new erroneous positions in the trend that is just ending... this is why the market moves so explosively after the price is confirmed, e.g., the new short holders are scrambling to cover or the new dip buyers are selling out rapidly...

The NT Indicator

The NT indicator is a near term (NT) indicator and is included in the evening briefings for the benefit of those who make counter trend trades... the NT buy and sell spikes are not main model buy and sell signals, these spikes are only very near term, although they could always develop into something more significant over the next few days... using a weather analogy, the buy/sell spikes are much like a developing low pressure area or a tropical wave, they do not indicate a fully blown hurricane, although it could eventually develop... if a fully blown hurricane actually does develop, then the main model signal itself would address that market action...

How To Read The NT Indicator

The best and safest time to take an NT signal is when the market has already trended for some time and is now approaching a VP price, especially a major VP, then the NT spike would indicate that the trend is likely to reverse since the market is already vulnerable at a VP price, the NT spike provides greater certainty for that counter trend trade...

The VP Price

The VP, or Vertical Price, is NOT a target, the market is not required or expected to reach any VP price... however, if reached, the VP price represents where the buying/selling has stretched to its maximum exhaustion point, at least temporarily, and a change in trend is very likely... VP prices behave like magnets, they attract the market price, and when the price touches the VP point, then the polarity reverses and repels price... all this market ever does is ping pong between VP prices...

The main model formula is specifically designed to determine precisely and to the exact market price where the market is most likely to reach complete buying and/or selling exhaustion, there is no guessing about it. This is why the market almost always backs away from those VP points after reaching them, at least for 10 to 12 points before resuming the trend... also, at those VP points, the market is the most vulnerable to a legitimate trend change. Therefore, when the market trades through those VP points and then backs away and closes on the other side of it again, there is a very high likelihood of a trend reversal at that time... these VP point are like magnets, they pull and attract the price until the VP is reached, and then upon reaching the VP it then reverses polarity and repels price... at that point, the market can back away and confirm a new trend signal or return to the VP and resume the original trend... this is where the main model determines the buy and sell confirmation prices...

The Floor/Ceiling Price

The floor price is always there in a down trend, the ceiling price is always there in an up trend... these specific prices are rarely mentioned because the market rarely reaches them... these are not VP prices but can be treated the same as a VP price except floor and ceiling prices change every day while the VP price does not... a close beyond the floor/ceiling price should be considered a second buy or sell confirmation signal...

How To Read The VP Price

If the market touches and then moves away from the VP very quickly and doesn't return, then this typically indicates a market reversal, but if the market moves away from the VP and then returns within a day or two, maybe sooner, then the move is not over and the market is likely to continue in its current trend... repeated visits to a VP suggests the move is not yet over...

A Suggestion On How To Enter A Position On A New Main Model Signal

One way to enter a new signal trade is to take only 1/3 position only after the market trades through the confirmation price by a few points... after that initial position is taken, let the market do what it does all day... then, late in the day, if the market is still confirming the signal, then add the second 1/3 position... and then, on the close take the final 1/3 position... your average entry price will be above/below the confirmation price but the whips will be significantly reduced... this is a method I use for myself very often...

Another way to enter a new position is to wait for the actual confirmation on the close, and then take the new position...

THE HOBAN RULE

The Hoban Rule is an exclusive proprietary trading strategy that uses the main model signals to trade the SP market only... using this strategy eliminates all whips and is recommended to be used by those who are not market savvy and/or nimble enough to trade free style...

To take the trade, these two prerequisite criteria must be met:

1) The closing price on confirmation day must be within 6 points of the confirmation price, and

2) The confirmation price for the next signal must be more than 5 points from the closing price of that day...

3) Also, you may enter the trade anytime after the signal is confirmed if the market comes back to within 5 points of the original signal confirmation price...

Since you don't yet know the confirmation price for the next signal at that moment, you can either take the trade if the closing price meets the first criteria, or wait for the evening briefing for that information... if you took the trade on the first criteria and the evening briefing reverse confirmation price does not satisfy the second criteria, then simply close out that trade... or, if you did not take the trade and the evening briefing satisfies the second criteria as well, then take the trade in the evening session or in the after hours market if you're trading a market ETF... or you can simply take the trade the following morning...

However, if the closing price is 6 points or more from the confirmation price, then do not take the trade at that time, just stay flat...

In order to take the trade when the closing price is 6 points or more from the confirmation price:

1) Place a limit order to enter the trade when/if the market moves within 5 points of the confirmation price...

To exit the trade:

1) Place an exit stop 2 points beyond the next buy/sell confirmation price... if filled, then stay flat and wait for the next new signal to be confirmed...

2) If the next new signal is confirmed, then begin again with step 1 using the two entry criteria to begin the next new trade position...

3) If the new signal is not confirmed, simply stay flat and wait for the next newly confirmed signal to begin the next trade at step 1, or simply re-enter the original position provided that the closing price that day is within 6 points of the original confirmation price and the reverse confirmation price is at least 5 points above that day's closing price...

4) Very often, you may find the second criteria is not met since the reverse confirmation price is less than 5 points above the closing price... but, on some occasions, a day or two later, the reverse confirmation price could actually move away from the market and would therefore meet the second criteria and subsequently satisfy both prerequisite criteria allowing for an entry provided that day's closing price is still no more than 6 points from the original main model confirmation price...

Applying The Hoban Rule for your trade positions based on the buy/sell confirmation prices as described above, you will find it easy to follow and with less stress than trying to catch the market while not knowing where it will actually close... and, also, all intraday entry whips are completely eliminated...

The Vertical Price Equilibrium Spread

This spread takes advantage of the unique relationship between related markets... this spread can be entered at any time, however to optimize and maximize the benefits of this spread, it should be entered at or near the major VP points... this spread generates profits regardless of market direction... if you would like a full explanation on how to benefit from this spread, then please ask me about it...

Rejected Buy/Sell Signals

Rejected buy and/or sell signals are typically followed by a sharp market move in the opposite direction the following day, this occurs as a general rule... a rejected sell signal is typically followed the next day by a sharp rally... as well, a rejected buy signal is typically followed the next day by a sharp decline... however, if the sharp rally/decline does not occur, then you can expect to see the market make another attempt at that buy/sell signal...

The Long Term (LT) Indicator

The long term (LT) indicator is a myriad of indicators that give you an X-ray view of the market internals and trend...

The green line = the closing price for the specific market

The red line = the confirmation line, the more dominant trend

The purple line = the early warning line

The blue line = the imminent warning line

The purple and blue lines crossing the red line gives you early and imminent warning of a possible change in trend direction...

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The email SUGGESTION BOX is always open and invites your ideas for improving and enhancing your email service, I enjoy hearing from you, many thanks...

NOTICE: I SEND OUT AN EMAIL EVERY WEEKDAY EVENING, IF YOU DO NOT RECEIVE ONE, PLEASE LET ME KNOW, THANKS...

For Wednesday, July 22nd

"The key to navigating bubbles successfully is to panic before everyone else does."

* * * John P. Hussmann, Ph.D.

A BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS can be found at the bottom of every email briefing for your easy quick reference and convenience, please take the time to review it every now and then, a good working knowledge of these tools will make you a better and more informed investor/trader...

The September SP Futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 7/16/15

The broader term intermediate trend (BTIT) bias is determined by the collective penetration of the most near term ceiling and floor prices... when ALL the near term ceiling prices have been penetrated on the close and none of the floor prices are penetrated, then the BTIT bias would be UP... when the reverse occurs, then the BTIT bias would be DOWN... the bias would turn to NEUTRAL when one or more of the ceiling/floor prices are penetrated on the close in the counter direction...

The main model is now Long the September SP from 2060.30 as of Friday, July 10th...

The last trade as of this writing is at 2108.40...

We had a solid sell off today, but the market is between two VP points, so this sell of is still considered to be just a pull back for now... tomorrow, watch for the penetration of the lower VP... you may ask, how come this market sold off so much and we had no sell signal confirmation... the answer is that this market had rallied so sharply in recent days that even a deep pull back is well within the bounds of a normal pull back... of course, much lower from here and this sell off may well develop into something more significant...

Providing two possible strategies in the evening briefing eliminates the need for the occasional mid day updates which is so often missed during your busy mid day activities...

Strategy 1 for Wednesday

For Wednesday, a close below 2100.90 in the September SP contract would confirm a new main model sell signal, otherwise remain long...

For Hoban Rule traders, you are currently flat this market... enter a new short position with a close below 2100.90 but not below 2094.90...

Rationale:

There is a major VP today at 2100.82 which is now below the market, a close below this VP price tomorrow would be negative for this market...

Strategy 2 for Wednesday

If the market trades above 2128.90 and then closes below 2129.00, this would also confirm a new main model sell signal...

Rationale:

We have a minor VP which stands at 2128.99... if the market trades above this ceiling price and then closes below it, this has negative connotations for this market moving forward...

If strategy 2 occurs, then for Hoban Rule traders, enter a new short position with a close below 2129.00 but not below 2123.00... this entry strategy is only if the market does trade above the 2128.99 VP for tomorrow and then closes below it... if the market does not trade above this VP price, then use strategy 1...

Are you having difficulty finding an entry point for a new signal??? Consider the Hoban Rule, even a child could follow the simple rules... I use it myself...

The Hoban Rule will not catch all trades, but will also not incur any entry whips on the entry of any new main model signals... this reliable and profitable strategy is presented here with each briefing only as a possible strategy option, one can use any trading strategy or any combination of strategies with the Hoban Rule that fits one's personal trading disposition... please review some of the other trading strategies in the tutorial at the bottom of each and every evening briefing... the Hoban Rule can be used with any other additional trading strategies that fit your disposition and comfort level...

The Hoban Rule Performance History:

The Hoban Rule was introduced to the evening briefing on 9/4/14... since that time, this strategy has now completed 26 trades for a net gain of 248.00 SP points... this is a simple but elegant strategy for anyone who prefers a less challenging trade plan based on the main model signals... of course, past performance is never a guarantee of future success, but this particular trading strategy has an impressive history and is well worth considering if you have difficulty taking the best advantage of the main model signals... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator (the red line)

A modest buy spike today while in neutral territory...

image

The LT (Long Term) indicator

While the NT indicator has turned higher today, the LT graph has taken a solid down turn and has given a sell spike while in deeply overbought territory...

image (1)
image (2)

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The following are the current upside VPs for the September SP... as long as the due date has not yet passed, the VP is still active and can effect these markets... the VP prices are presented exactly as the formula generates them even though the SP contract itself doesn't trade at that particular decimal point... please note, I may also include the VP prices that are well below the market because their deadline due dates have not yet expired...
minor - - 2082.61 (already reached)
MAJOR - - 2100.82 and must close below that price on Thursday, August 6th to confirm a new main model sell signal... (already reached)
minor - - 2128.99
MAJOR - - 2164.39 and must close below that price on Friday, August 28th to confirm a new main model sell signal...
TOMORROW'S HIGHEST CEILING FLOOR PRICE - - 2319.22
For now, the main model remains long the SP...

The AUGUST Gold futures
BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 6/24/15
The main model is now short the August gold from 1156.00 as of Tuesday, July 14th...

The last trade as of this writing is at 1100.20...

For Wednesday, a close above 1110.90 in the August Gold contract would confirm a new main model buy signal...

@ 13:10 - This Wednesday mid day gold update supersedes ALL previous gold briefings... 

For Wednesday, a close above 1091.90 in the August Gold contract would confirm a new main model buy signal...    August gold is currently trading at 1092.60...

The Hoban Rule was expressly designed for the SP market and no other market at this time...

The LT (Long Term) Indicator

While the market closed lower, the LT graph now shows an ever so modest buy spike in deeply oversold territory... with a buy confirmation, this could well be a significant low forming, the deep blue and purple lines are beginning to appear like capitulation lows...

image (3)
image (4)

The following are the current downside VPs for August gold...

minor - - 1144.23 (already reached)

MAJOR - - 1135.34 and must close above that price on Friday, July 24th to confirm a new main model buy signal... (already reached)

TOMORROW'S LOWEST FLOOR PRICE - - 1082.21 (already reached)

For now, the main model remains short gold...

BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS:

The SP confirmation close ALWAYS refers to the large contract 4:15 pm futures closing price... also, use only the large contract for all official main model signals, the mini contract will give you false signals...

The Confirmation Price

The confirmation price is a specific market price beyond which the market must close in order to confirm a new main model buy or sell signal... the confirmation price is not a top or bottom picker, it is not designed to get you into a new position right at, or near, the top or bottom tick... but rather, it tells you that the trend has more than likely changed direction with a high degree of reliability... as has been demonstrated with better than a 98% reliability, the confirmation price confirms that the market trend has legitimately changed direction and that a new trend has just begun... very often, a buy confirmation price may seem so far above the market that taking a new long position at that high level seems risky... the same can be said for taking a new short position at a sell confirmation price... but factually, these price points are the most ideal place to enter a new position since these confirmation prices occur where most people are likely to take new erroneous positions in the trend that is just ending... this is why the market moves so explosively after the price is confirmed, e.g., the new short holders are scrambling to cover or the new dip buyers are selling out rapidly...

The NT Indicator

The NT indicator is a near term (NT) indicator and is included in the evening briefings for the benefit of those who make counter trend trades... the NT buy and sell spikes are not main model buy and sell signals, these spikes are only very near term, although they could always develop into something more significant over the next few days... using a weather analogy, the buy/sell spikes are much like a developing low pressure area or a tropical wave, they do not indicate a fully blown hurricane, although it could eventually develop... if a fully blown hurricane actually does develop, then the main model signal itself would address that market action...

How To Read The NT Indicator

The best and safest time to take an NT signal is when the market has already trended for some time and is now approaching a VP price, especially a major VP, then the NT spike would indicate that the trend is likely to reverse since the market is already vulnerable at a VP price, the NT spike provides greater certainty for that counter trend trade...

The VP Price

The VP, or Vertical Price, is NOT a target, the market is not required or expected to reach any VP price... however, if reached, the VP price represents where the buying/selling has stretched to its maximum exhaustion point, at least temporarily, and a change in trend is very likely... VP prices behave like magnets, they attract the market price, and when the price touches the VP point, then the polarity reverses and repels price... all this market ever does is ping pong between VP prices...

The main model formula is specifically designed to determine precisely and to the exact market price where the market is most likely to reach complete buying and/or selling exhaustion, there is no guessing about it. This is why the market almost always backs away from those VP points after reaching them, at least for 10 to 12 points before resuming the trend... also, at those VP points, the market is the most vulnerable to a legitimate trend change. Therefore, when the market trades through those VP points and then backs away and closes on the other side of it again, there is a very high likelihood of a trend reversal at that time... these VP point are like magnets, they pull and attract the price until the VP is reached, and then upon reaching the VP it then reverses polarity and repels price... at that point, the market can back away and confirm a new trend signal or return to the VP and resume the original trend... this is where the main model determines the buy and sell confirmation prices...

The Floor/Ceiling Price

The floor price is always there in a down trend, the ceiling price is always there in an up trend... these specific prices are rarely mentioned because the market rarely reaches them... these are not VP prices but can be treated the same as a VP price except floor and ceiling prices change every day while the VP price does not... a close beyond the floor/ceiling price should be considered a second buy or sell confirmation signal...

How To Read The VP Price

If the market touches and then moves away from the VP very quickly and doesn't return, then this typically indicates a market reversal, but if the market moves away from the VP and then returns within a day or two, maybe sooner, then the move is not over and the market is likely to continue in its current trend... repeated visits to a VP suggests the move is not yet over...

A Suggestion On How To Enter A Position On A New Main Model Signal

One way to enter a new signal trade is to take only 1/3 position only after the market trades through the confirmation price by a few points... after that initial position is taken, let the market do what it does all day... then, late in the day, if the market is still confirming the signal, then add the second 1/3 position... and then, on the close take the final 1/3 position... your average entry price will be above/below the confirmation price but the whips will be significantly reduced... this is a method I use for myself very often...

Another way to enter a new position is to wait for the actual confirmation on the close, and then take the new position...

THE HOBAN RULE

The Hoban Rule is an exclusive proprietary trading strategy that uses the main model signals to trade the SP market only... using this strategy eliminates all whips and is recommended to be used by those who are not market savvy and/or nimble enough to trade free style...

To take the trade, these two prerequisite criteria must be met:

1) The closing price on confirmation day must be within 6 points of the confirmation price, and

2) The confirmation price for the next signal must be more than 5 points from the closing price of that day...

3) Also, you may enter the trade anytime after the signal is confirmed if the market comes back to within 5 points of the original signal confirmation price...

Since you don't yet know the confirmation price for the next signal at that moment, you can either take the trade if the closing price meets the first criteria, or wait for the evening briefing for that information... if you took the trade on the first criteria and the evening briefing reverse confirmation price does not satisfy the second criteria, then simply close out that trade... or, if you did not take the trade and the evening briefing satisfies the second criteria as well, then take the trade in the evening session or in the after hours market if you're trading a market ETF... or you can simply take the trade the following morning...

However, if the closing price is 6 points or more from the confirmation price, then do not take the trade at that time, just stay flat...

In order to take the trade when the closing price is 6 points or more from the confirmation price:

1) Place a limit order to enter the trade when/if the market moves within 5 points of the confirmation price...

To exit the trade:

1) Place an exit stop 2 points beyond the next buy/sell confirmation price... if filled, then stay flat and wait for the next new signal to be confirmed...

2) If the next new signal is confirmed, then begin again with step 1 using the two entry criteria to begin the next new trade position...

3) If the new signal is not confirmed, simply stay flat and wait for the next newly confirmed signal to begin the next trade at step 1, or simply re-enter the original position provided that the closing price that day is within 6 points of the original confirmation price and the reverse confirmation price is at least 5 points above that day's closing price...

4) Very often, you may find the second criteria is not met since the reverse confirmation price is less than 5 points above the closing price... but, on some occasions, a day or two later, the reverse confirmation price could actually move away from the market and would therefore meet the second criteria and subsequently satisfy both prerequisite criteria allowing for an entry provided that day's closing price is still no more than 6 points from the original main model confirmation price...

Applying The Hoban Rule for your trade positions based on the buy/sell confirmation prices as described above, you will find it easy to follow and with less stress than trying to catch the market while not knowing where it will actually close... and, also, all intraday entry whips are completely eliminated...

The Vertical Price Equilibrium Spread

This spread takes advantage of the unique relationship between related markets... this spread can be entered at any time, however to optimize and maximize the benefits of this spread, it should be entered at or near the major VP points... this spread generates profits regardless of market direction... if you would like a full explanation on how to benefit from this spread, then please ask me about it...

Rejected Buy/Sell Signals

Rejected buy and/or sell signals are typically followed by a sharp market move in the opposite direction the following day, this occurs as a general rule... a rejected sell signal is typically followed the next day by a sharp rally... as well, a rejected buy signal is typically followed the next day by a sharp decline... however, if the sharp rally/decline does not occur, then you can expect to see the market make another attempt at that buy/sell signal...

The Long Term (LT) Indicator

The long term (LT) indicator is a myriad of indicators that give you an X-ray view of the market internals and trend...

The green line = the closing price for the specific market

The red line = the confirmation line, the more dominant trend

The purple line = the early warning line

The blue line = the imminent warning line

The purple and blue lines crossing the red line gives you early and imminent warning of a possible change in trend direction...

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The email SUGGESTION BOX is always open and invites your ideas for improving and enhancing your email service, I enjoy hearing from you, many thanks...

NOTICE: I SEND OUT AN EMAIL EVERY WEEKDAY EVENING, IF YOU DO NOT RECEIVE ONE, PLEASE LET ME KNOW, THANKS...

For Tuesday, July 21st

"The key to navigating bubbles successfully is to panic before everyone else does."

* * * John P. Hussmann, Ph.D.

A BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS can be found at the bottom of every email briefing for your easy quick reference and convenience, please take the time to review it every now and then, a good working knowledge of these tools will make you a better and more informed investor/trader...

The September SP Futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 7/16/15

The broader term intermediate trend (BTIT) bias is determined by the collective penetration of the most near term ceiling and floor prices... when ALL the near term ceiling prices have been penetrated on the close and none of the floor prices are penetrated, then the BTIT bias would be UP... when the reverse occurs, then the BTIT bias would be DOWN... the bias would turn to NEUTRAL when one or more of the ceiling/floor prices are penetrated on the close in the counter direction...

The main model is now Long the September SP from 2060.30 as of Friday, July 10th...

The last trade as of this writing is at 2120.80...

Providing two possible strategies in the evening briefing eliminates the need for the occasional mid day updates which is so often missed during your busy mid day activities...

Strategy 1 for Tuesday

For Tuesday, a close below 2100.90 in the September SP contract would confirm a new main model sell signal, otherwise remain long...

For Hoban Rule traders, you are currently flat this market... enter a new short position with a close below 2100.90 but not below 2094.90...

Rationale:

There is a major VP today at 2100.82 which is now below the market, a close below this VP price tomorrow would be negative for this market...

Strategy 2 for Tuesday

If the market trades above 2128.90 and then closes below 2129.00, this would also confirm a new main model sell signal...

Rationale:

We have a minor VP which stands at 2128.99... if the market trades above this ceiling price and then closes below it, this has negative connotations for this market moving forward...

If strategy 2 occurs, then for Hoban Rule traders, enter a new short position with a close below 2129.00 but not below 2123.00... this entry strategy is only if the market does trade above the 2128.99 VP for tomorrow and then closes below it... if the market does not trade above this VP price, then use strategy 1...

Are you having difficulty finding an entry point for a new signal??? Consider the Hoban Rule, even a child could follow the simple rules... I use it myself...

The Hoban Rule will not catch all trades, but will also not incur any entry whips on the entry of any new main model signals... this reliable and profitable strategy is presented here with each briefing only as a possible strategy option, one can use any trading strategy or any combination of strategies with the Hoban Rule that fits one's personal trading disposition... please review some of the other trading strategies in the tutorial at the bottom of each and every evening briefing... the Hoban Rule can be used with any other additional trading strategies that fit your disposition and comfort level...

The Hoban Rule Performance History:

The Hoban Rule was introduced to the evening briefing on 9/4/14... since that time, this strategy has now completed 26 trades for a net gain of 248.00 SP points... this is a simple but elegant strategy for anyone who prefers a less challenging trade plan based on the main model signals... of course, past performance is never a guarantee of future success, but this particular trading strategy has an impressive history and is well worth considering if you have difficulty taking the best advantage of the main model signals... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator (the red line)

This market appear to be working off a overbought condition for now...

image

The LT (Long Term) indicator

The blue line has now stalled and gone sideways for today, the purple line has actually turned lower even with a modestly higher market close... this market appears to be losing some steam, watch for the possible reach higher tomorrow for the overhead VP...

image (1)
image (2)

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The following are the current upside VPs for the September SP... as long as the due date has not yet passed, the VP is still active and can effect these markets... the VP prices are presented exactly as the formula generates them even though the SP contract itself doesn't trade at that particular decimal point... please note, I may also include the VP prices that are well below the market because their deadline due dates have not yet expired...
minor - - 2082.61 (already reached)
MAJOR - - 2100.82 and must close below that price on Thursday, August 6th to confirm a new main model sell signal... (already reached)
minor - - 2128.99
MAJOR - - 2164.39 and must close below that price on Friday, August 28th to confirm a new main model sell signal...
TOMORROW'S HIGHEST CEILING FLOOR PRICE - - 2319.22
For now, the main model remains long the SP...

The AUGUST Gold futures
BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 6/24/15
The main model is now short the August gold from 1156.00 as of Tuesday, July 14th...

The last trade as of this writing is at 1102.20...

For Tuesday, a close above 1135.30   1110.90  in the August Gold contract would confirm a new main model buy signal...

The Hoban Rule was expressly designed for the SP market and no other market at this time...

The LT (Long Term) Indicator

This market is now as oversold as it has been in the past 3 years shown in the graph... today could have been a key low, but the main model isn't confirming a low until this market can show a little more strength... there was a chance this morning, but it fizzled out as the day went on... today's lowest floor price was 1082.21 and the low of the day was 1080.00, not bad...

image (3)
image (4)

The following are the current downside VPs for August gold...

minor - - 1144.23 (already reached)

MAJOR - - 1135.34 and must close above that price on Friday, July 24th to confirm a new main model buy signal... (already reached)

TOMORROW'S LOWEST FLOOR PRICE - - 1082.21 (already reached)

For now, the main model remains short gold...

BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS:

The SP confirmation close ALWAYS refers to the large contract 4:15 pm futures closing price... also, use only the large contract for all official main model signals, the mini contract will give you false signals...

The Confirmation Price

The confirmation price is a specific market price beyond which the market must close in order to confirm a new main model buy or sell signal... the confirmation price is not a top or bottom picker, it is not designed to get you into a new position right at, or near, the top or bottom tick... but rather, it tells you that the trend has more than likely changed direction with a high degree of reliability... as has been demonstrated with better than a 98% reliability, the confirmation price confirms that the market trend has legitimately changed direction and that a new trend has just begun... very often, a buy confirmation price may seem so far above the market that taking a new long position at that high level seems risky... the same can be said for taking a new short position at a sell confirmation price... but factually, these price points are the most ideal place to enter a new position since these confirmation prices occur where most people are likely to take new erroneous positions in the trend that is just ending... this is why the market moves so explosively after the price is confirmed, e.g., the new short holders are scrambling to cover or the new dip buyers are selling out rapidly...

The NT Indicator

The NT indicator is a near term (NT) indicator and is included in the evening briefings for the benefit of those who make counter trend trades... the NT buy and sell spikes are not main model buy and sell signals, these spikes are only very near term, although they could always develop into something more significant over the next few days... using a weather analogy, the buy/sell spikes are much like a developing low pressure area or a tropical wave, they do not indicate a fully blown hurricane, although it could eventually develop... if a fully blown hurricane actually does develop, then the main model signal itself would address that market action...

How To Read The NT Indicator

The best and safest time to take an NT signal is when the market has already trended for some time and is now approaching a VP price, especially a major VP, then the NT spike would indicate that the trend is likely to reverse since the market is already vulnerable at a VP price, the NT spike provides greater certainty for that counter trend trade...

The VP Price

The VP, or Vertical Price, is NOT a target, the market is not required or expected to reach any VP price... however, if reached, the VP price represents where the buying/selling has stretched to its maximum exhaustion point, at least temporarily, and a change in trend is very likely... VP prices behave like magnets, they attract the market price, and when the price touches the VP point, then the polarity reverses and repels price... all this market ever does is ping pong between VP prices...

The main model formula is specifically designed to determine precisely and to the exact market price where the market is most likely to reach complete buying and/or selling exhaustion, there is no guessing about it. This is why the market almost always backs away from those VP points after reaching them, at least for 10 to 12 points before resuming the trend... also, at those VP points, the market is the most vulnerable to a legitimate trend change. Therefore, when the market trades through those VP points and then backs away and closes on the other side of it again, there is a very high likelihood of a trend reversal at that time... these VP point are like magnets, they pull and attract the price until the VP is reached, and then upon reaching the VP it then reverses polarity and repels price... at that point, the market can back away and confirm a new trend signal or return to the VP and resume the original trend... this is where the main model determines the buy and sell confirmation prices...

The Floor/Ceiling Price

The floor price is always there in a down trend, the ceiling price is always there in an up trend... these specific prices are rarely mentioned because the market rarely reaches them... these are not VP prices but can be treated the same as a VP price except floor and ceiling prices change every day while the VP price does not... a close beyond the floor/ceiling price should be considered a second buy or sell confirmation signal...

How To Read The VP Price

If the market touches and then moves away from the VP very quickly and doesn't return, then this typically indicates a market reversal, but if the market moves away from the VP and then returns within a day or two, maybe sooner, then the move is not over and the market is likely to continue in its current trend... repeated visits to a VP suggests the move is not yet over...

A Suggestion On How To Enter A Position On A New Main Model Signal

One way to enter a new signal trade is to take only 1/3 position only after the market trades through the confirmation price by a few points... after that initial position is taken, let the market do what it does all day... then, late in the day, if the market is still confirming the signal, then add the second 1/3 position... and then, on the close take the final 1/3 position... your average entry price will be above/below the confirmation price but the whips will be significantly reduced... this is a method I use for myself very often...

Another way to enter a new position is to wait for the actual confirmation on the close, and then take the new position...

THE HOBAN RULE

The Hoban Rule is an exclusive proprietary trading strategy that uses the main model signals to trade the SP market only... using this strategy eliminates all whips and is recommended to be used by those who are not market savvy and/or nimble enough to trade free style...

To take the trade, these two prerequisite criteria must be met:

1) The closing price on confirmation day must be within 6 points of the confirmation price, and

2) The confirmation price for the next signal must be more than 5 points from the closing price of that day...

3) Also, you may enter the trade anytime after the signal is confirmed if the market comes back to within 5 points of the original signal confirmation price...

Since you don't yet know the confirmation price for the next signal at that moment, you can either take the trade if the closing price meets the first criteria, or wait for the evening briefing for that information... if you took the trade on the first criteria and the evening briefing reverse confirmation price does not satisfy the second criteria, then simply close out that trade... or, if you did not take the trade and the evening briefing satisfies the second criteria as well, then take the trade in the evening session or in the after hours market if you're trading a market ETF... or you can simply take the trade the following morning...

However, if the closing price is 6 points or more from the confirmation price, then do not take the trade at that time, just stay flat...

In order to take the trade when the closing price is 6 points or more from the confirmation price:

1) Place a limit order to enter the trade when/if the market moves within 5 points of the confirmation price...

To exit the trade:

1) Place an exit stop 2 points beyond the next buy/sell confirmation price... if filled, then stay flat and wait for the next new signal to be confirmed...

2) If the next new signal is confirmed, then begin again with step 1 using the two entry criteria to begin the next new trade position...

3) If the new signal is not confirmed, simply stay flat and wait for the next newly confirmed signal to begin the next trade at step 1, or simply re-enter the original position provided that the closing price that day is within 6 points of the original confirmation price and the reverse confirmation price is at least 5 points above that day's closing price...

4) Very often, you may find the second criteria is not met since the reverse confirmation price is less than 5 points above the closing price... but, on some occasions, a day or two later, the reverse confirmation price could actually move away from the market and would therefore meet the second criteria and subsequently satisfy both prerequisite criteria allowing for an entry provided that day's closing price is still no more than 6 points from the original main model confirmation price...

Applying The Hoban Rule for your trade positions based on the buy/sell confirmation prices as described above, you will find it easy to follow and with less stress than trying to catch the market while not knowing where it will actually close... and, also, all intraday entry whips are completely eliminated...

The Vertical Price Equilibrium Spread

This spread takes advantage of the unique relationship between related markets... this spread can be entered at any time, however to optimize and maximize the benefits of this spread, it should be entered at or near the major VP points... this spread generates profits regardless of market direction... if you would like a full explanation on how to benefit from this spread, then please ask me about it...

Rejected Buy/Sell Signals

Rejected buy and/or sell signals are typically followed by a sharp market move in the opposite direction the following day, this occurs as a general rule... a rejected sell signal is typically followed the next day by a sharp rally... as well, a rejected buy signal is typically followed the next day by a sharp decline... however, if the sharp rally/decline does not occur, then you can expect to see the market make another attempt at that buy/sell signal...

The Long Term (LT) Indicator

The long term (LT) indicator is a myriad of indicators that give you an X-ray view of the market internals and trend...

The green line = the closing price for the specific market

The red line = the confirmation line, the more dominant trend

The purple line = the early warning line

The blue line = the imminent warning line

The purple and blue lines crossing the red line gives you early and imminent warning of a possible change in trend direction...

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The email SUGGESTION BOX is always open and invites your ideas for improving and enhancing your email service, I enjoy hearing from you, many thanks...

NOTICE: I SEND OUT AN EMAIL EVERY WEEKDAY EVENING, IF YOU DO NOT RECEIVE ONE, PLEASE LET ME KNOW, THANKS...

For Monday, July 20th

"The key to navigating bubbles successfully is to panic before everyone else does."

* * * John P. Hussmann, Ph.D.

A BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS can be found at the bottom of every email briefing for your easy quick reference and convenience, please take the time to review it every now and then, a good working knowledge of these tools will make you a better and more informed investor/trader...

The September SP Futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 7/16/15

The broader term intermediate trend (BTIT) bias is determined by the collective penetration of the most near term ceiling and floor prices... when ALL the near term ceiling prices have been penetrated on the close and none of the floor prices are penetrated, then the BTIT bias would be UP... when the reverse occurs, then the BTIT bias would be DOWN... the bias would turn to NEUTRAL when one or more of the ceiling/floor prices are penetrated on the close in the counter direction...

The main model is now Long the September SP from 2060.30 as of Friday, July 10th...

The last trade as of this writing is at 2119.40...

EGADS!!! It seems there's no stopping this market...

Providing two possible strategies in the evening briefing eliminates the need for the occasional mid day updates which is so often missed during your busy mid day activities...

Strategy 1 for Monday

For Monday, a close below 2100.90 in the September SP contract would confirm a new main model sell signal, otherwise remain long...

For Hoban Rule traders, you are currently flat this market... enter a new short position with a close below 2100.90 but not below 2094.90...

Rationale:

There is a major VP today at 2100.82 which is now below the market, a close below this VP price tomorrow would be negative for this market...

Strategy 2 for Monday

If the market trades above 2128.90 and then closes below 2129.00, this would also confirm a new main model sell signal...

Rationale:

We have a minor VP which stands at 2128.99... if the market trades above this ceiling price and then closes below it, this has negative connotations for this market moving forward...

If strategy 2 occurs, then for Hoban Rule traders, enter a new short position with a close below 2129.00 but not below 2123.00... this entry strategy is only if the market does trade above the 2128.99 VP for tomorrow and then closes below it... if the market does not trade above this VP price, then use strategy 1...

Are you having difficulty finding an entry point for a new signal??? Consider the Hoban Rule, even a child could follow the simple rules... I use it myself...

The Hoban Rule will not catch all trades, but will also not incur any entry whips on the entry of any new main model signals... this reliable and profitable strategy is presented here with each briefing only as a possible strategy option, one can use any trading strategy or any combination of strategies with the Hoban Rule that fits one's personal trading disposition... please review some of the other trading strategies in the tutorial at the bottom of each and every evening briefing... the Hoban Rule can be used with any other additional trading strategies that fit your disposition and comfort level...

The Hoban Rule Performance History:

The Hoban Rule was introduced to the evening briefing on 9/4/14... since that time, this strategy has now completed 26 trades for a net gain of 248.00 SP points... this is a simple but elegant strategy for anyone who prefers a less challenging trade plan based on the main model signals... of course, past performance is never a guarantee of future success, but this particular trading strategy has an impressive history and is well worth considering if you have difficulty taking the best advantage of the main model signals... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator (the red line)

While the market continues higher, the NT indicator's sell spike continues lower... there are two possible explanations for this particular phenomenon...

1) This market is digesting its recent gains in a sideways pattern which would imply a much higher market from here OR,

2) This market is moving higher on momentum of the remaining little bit of fumes and is about to run our of steam...

Either way, this market is now highly vulnerable to a pull back... the best opportunity for any pull back would be at the next higher VP point at 2128.99 which is also a major VP and should not be dismissed too quickly...

image

The LT (Long Term) indicator

This LT graph speaks for itself... look at the blue and purple lines, both now entering deeply into the over bought zone... clearly, this market is moving higher with a powerful thrust... it's a good thing the main model remains long this market... for now, anyway...

image (1)
image (2)

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The following are the current upside VPs for the September SP... as long as the due date has not yet passed, the VP is still active and can effect these markets... the VP prices are presented exactly as the formula generates them even though the SP contract itself doesn't trade at that particular decimal point... please note, I may also include the VP prices that are well below the market because their deadline due dates have not yet expired...
minor - - 2082.61 (already reached)
MAJOR - - 2100.82 and must close below that price on Thursday, August 6th to confirm a new main model sell signal... (already reached)
minor - - 2128.99
MAJOR - - 2164.39 and must close below that price on Friday, August 28th to confirm a new main model sell signal...
TOMORROW'S HIGHEST CEILING FLOOR PRICE - - 2319.22
For now, the main model remains long the SP...

The AUGUST Gold futures
BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 6/24/15
The main model is now short the August gold from 1156.00 as of Tuesday, July 14th...

The last trade as of this writing is at 1132.70...

Gold reached a low today at 1129.60 today... we have a major VP at 1135.34, so this market has now closed below this major VP point after stalling its decline for a day or so at the minor VP before a further decline... t gold to stall again at this major VP point... in fact, the main if this market rallies from this VP point, then the rally could be significant...

For Monday, a close above 1135.30  1091.90  in the August Gold contract would confirm a new main model buy signal...  at the time of this edit (11:15am), August gold is currently trading at 1104.70...

The Hoban Rule was expressly designed for the SP market and no other market at this time...

The LT (Long Term) Indicator

You could almost see a support line along the three most recent lows in the blue line... since this market is currently at a major VP point, it certainly is very possible we should see a bounce in gold on Monday... although, this is certainly not a guarantee of any bottom... a buy confirmation on Monday could trigger a respectable rally for this market, after all, this market is now sitting just below the major downside VP on the close...

image (3)
image (4)

The following are the current downside VPs for August gold...

minor - - 1144.23 (already reached)

MAJOR - - 1135.34 and must close above that price on Friday, July 24th to confirm a new main model buy signal... (already reached)

TOMORROW'S LOWEST FLOOR PRICE - - 1082.21

For now, the main model remains short gold...

BRIEF TUTORIAL OF MAIN MODEL APPLICATIONS:

The SP confirmation close ALWAYS refers to the large contract 4:15 pm futures closing price... also, use only the large contract for all official main model signals, the mini contract will give you false signals...

The Confirmation Price

The confirmation price is a specific market price beyond which the market must close in order to confirm a new main model buy or sell signal... the confirmation price is not a top or bottom picker, it is not designed to get you into a new position right at, or near, the top or bottom tick... but rather, it tells you that the trend has more than likely changed direction with a high degree of reliability... as has been demonstrated with better than a 98% reliability, the confirmation price confirms that the market trend has legitimately changed direction and that a new trend has just begun... very often, a buy confirmation price may seem so far above the market that taking a new long position at that high level seems risky... the same can be said for taking a new short position at a sell confirmation price... but factually, these price points are the most ideal place to enter a new position since these confirmation prices occur where most people are likely to take new erroneous positions in the trend that is just ending... this is why the market moves so explosively after the price is confirmed, e.g., the new short holders are scrambling to cover or the new dip buyers are selling out rapidly...

The NT Indicator

The NT indicator is a near term (NT) indicator and is included in the evening briefings for the benefit of those who make counter trend trades... the NT buy and sell spikes are not main model buy and sell signals, these spikes are only very near term, although they could always develop into something more significant over the next few days... using a weather analogy, the buy/sell spikes are much like a developing low pressure area or a tropical wave, they do not indicate a fully blown hurricane, although it could eventually develop... if a fully blown hurricane actually does develop, then the main model signal itself would address that market action...

How To Read The NT Indicator

The best and safest time to take an NT signal is when the market has already trended for some time and is now approaching a VP price, especially a major VP, then the NT spike would indicate that the trend is likely to reverse since the market is already vulnerable at a VP price, the NT spike provides greater certainty for that counter trend trade...

The VP Price

The VP, or Vertical Price, is NOT a target, the market is not required or expected to reach any VP price... however, if reached, the VP price represents where the buying/selling has stretched to its maximum exhaustion point, at least temporarily, and a change in trend is very likely... VP prices behave like magnets, they attract the market price, and when the price touches the VP point, then the polarity reverses and repels price... all this market ever does is ping pong between VP prices...

The main model formula is specifically designed to determine precisely and to the exact market price where the market is most likely to reach complete buying and/or selling exhaustion, there is no guessing about it. This is why the market almost always backs away from those VP points after reaching them, at least for 10 to 12 points before resuming the trend... also, at those VP points, the market is the most vulnerable to a legitimate trend change. Therefore, when the market trades through those VP points and then backs away and closes on the other side of it again, there is a very high likelihood of a trend reversal at that time... these VP point are like magnets, they pull and attract the price until the VP is reached, and then upon reaching the VP it then reverses polarity and repels price... at that point, the market can back away and confirm a new trend signal or return to the VP and resume the original trend... this is where the main model determines the buy and sell confirmation prices...

The Floor/Ceiling Price

The floor price is always there in a down trend, the ceiling price is always there in an up trend... these specific prices are rarely mentioned because the market rarely reaches them... these are not VP prices but can be treated the same as a VP price except floor and ceiling prices change every day while the VP price does not... a close beyond the floor/ceiling price should be considered a second buy or sell confirmation signal...

How To Read The VP Price

If the market touches and then moves away from the VP very quickly and doesn't return, then this typically indicates a market reversal, but if the market moves away from the VP and then returns within a day or two, maybe sooner, then the move is not over and the market is likely to continue in its current trend... repeated visits to a VP suggests the move is not yet over...

A Suggestion On How To Enter A Position On A New Main Model Signal

One way to enter a new signal trade is to take only 1/3 position only after the market trades through the confirmation price by a few points... after that initial position is taken, let the market do what it does all day... then, late in the day, if the market is still confirming the signal, then add the second 1/3 position... and then, on the close take the final 1/3 position... your average entry price will be above/below the confirmation price but the whips will be significantly reduced... this is a method I use for myself very often...

Another way to enter a new position is to wait for the actual confirmation on the close, and then take the new position...

THE HOBAN RULE

The Hoban Rule is an exclusive proprietary trading strategy that uses the main model signals to trade the SP market only... using this strategy eliminates all whips and is recommended to be used by those who are not market savvy and/or nimble enough to trade free style...

To take the trade, these two prerequisite criteria must be met:

1) The closing price on confirmation day must be within 6 points of the confirmation price, and

2) The confirmation price for the next signal must be more than 5 points from the closing price of that day...

3) Also, you may enter the trade anytime after the signal is confirmed if the market comes back to within 5 points of the original signal confirmation price...

Since you don't yet know the confirmation price for the next signal at that moment, you can either take the trade if the closing price meets the first criteria, or wait for the evening briefing for that information... if you took the trade on the first criteria and the evening briefing reverse confirmation price does not satisfy the second criteria, then simply close out that trade... or, if you did not take the trade and the evening briefing satisfies the second criteria as well, then take the trade in the evening session or in the after hours market if you're trading a market ETF... or you can simply take the trade the following morning...

However, if the closing price is 6 points or more from the confirmation price, then do not take the trade at that time, just stay flat...

In order to take the trade when the closing price is 6 points or more from the confirmation price:

1) Place a limit order to enter the trade when/if the market moves within 5 points of the confirmation price...

To exit the trade:

1) Place an exit stop 2 points beyond the next buy/sell confirmation price... if filled, then stay flat and wait for the next new signal to be confirmed...

2) If the next new signal is confirmed, then begin again with step 1 using the two entry criteria to begin the next new trade position...

3) If the new signal is not confirmed, simply stay flat and wait for the next newly confirmed signal to begin the next trade at step 1, or simply re-enter the original position provided that the closing price that day is within 6 points of the original confirmation price and the reverse confirmation price is at least 5 points above that day's closing price...

4) Very often, you may find the second criteria is not met since the reverse confirmation price is less than 5 points above the closing price... but, on some occasions, a day or two later, the reverse confirmation price could actually move away from the market and would therefore meet the second criteria and subsequently satisfy both prerequisite criteria allowing for an entry provided that day's closing price is still no more than 6 points from the original main model confirmation price...

Applying The Hoban Rule for your trade positions based on the buy/sell confirmation prices as described above, you will find it easy to follow and with less stress than trying to catch the market while not knowing where it will actually close... and, also, all intraday entry whips are completely eliminated...

The Vertical Price Equilibrium Spread

This spread takes advantage of the unique relationship between related markets... this spread can be entered at any time, however to optimize and maximize the benefits of this spread, it should be entered at or near the major VP points... this spread generates profits regardless of market direction... if you would like a full explanation on how to benefit from this spread, then please ask me about it...

Rejected Buy/Sell Signals

Rejected buy and/or sell signals are typically followed by a sharp market move in the opposite direction the following day, this occurs as a general rule... a rejected sell signal is typically followed the next day by a sharp rally... as well, a rejected buy signal is typically followed the next day by a sharp decline... however, if the sharp rally/decline does not occur, then you can expect to see the market make another attempt at that buy/sell signal...

The Long Term (LT) Indicator

The long term (LT) indicator is a myriad of indicators that give you an X-ray view of the market internals and trend...

The green line = the closing price for the specific market

The red line = the confirmation line, the more dominant trend

The purple line = the early warning line

The blue line = the imminent warning line

The purple and blue lines crossing the red line gives you early and imminent warning of a possible change in trend direction...

If you have a particular stock, ETF, index, or any trading market instrument that you would like to see through the analysis of the LT graph, then just let me know, just send me the market symbol, I can create an LT graph for that selection and keep it on file with me to update for you later on...

The email SUGGESTION BOX is always open and invites your ideas for improving and enhancing your email service, I enjoy hearing from you, many thanks...

NOTICE: I SEND OUT AN EMAIL EVERY WEEKDAY EVENING, IF YOU DO NOT RECEIVE ONE, PLEASE LET ME KNOW, THANKS...