For Monday, October 3rd

A celebrity is a person who works hard all his life to become well known, and then wears dark glasses to avoid being recognized.

* * * Fred Allen

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...

TOMORROW'S SP TRADE STRATEGY:
For Monday, a close above 2161.30 in the DECEMBER contract would confirm a new main model buy signal... be sure to review the VP price map directly below for additional VP points that may trigger a buy/sell signal...

For Hoban Rule traders, you are currently flat this market... enter a new long position with a close between 2166.30 and 2167.30... if filled, then place an exit stop to go flat at 2159.30... please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A major VP at 2161.36... Notice this major VP expires on Monday, and once again time and price intersect, this is not random...

The last trade at this writing is at 2159.00 in the December...

The main model is now short the December SP from 2161.40 as of Friday, September 30th...

This market traded higher today without looking back, but then finished with a confirmed sell signal today... if you're catching the signals, then you're nailing this market!!!

THE VP PRICE MAP FOR TOMORROW

The VP map tells you everything you need to know, consult the map daily... knowing the map and the two key trading rules will make you a much more savvy trader, so it is extremely important to be familiar with the VP map...

Secondary Vertical Prices (SVP) are for the aggressive trader who is looking for an additional edge on additional exhaustion points... you will notice that the market responds as well to the SVP as to the standard VP points and are traded the same, but for now the main model will use only the standard VP points for official main model signals...

SP DECEMBER VP PRICES

MAJOR - - 2225.77 and must close below that price on Thursday, October 27th to confirm a new main model sell signal...

MAJOR - - 2218.73 and must close below that price on Wednesday, November 9th to confirm a new main model sell signal...

minor - - 2191.901

minor - - 2185.43

MAJOR - - 2161.36 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2159.00

SVP - - 2157.03

MAJOR - - 2156.16 and must close below that price on Tuesday, October 4th to confirm a new main model sell signal...

minor - - 2148.01

minor - - 2124.23

minor - - 2105.51

MAJOR - - 2103.89 and must close above that price on Thursday, October 27th to confirm a new main model buy signal...

minor - - 2095.48

MAJOR - - 2064.604 and must close above that price on Tuesday, November 1st to confirm a new main model buy signal...

SVP - - 2062.39

The above price map is listed in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

PLEASE NOTE: It is vitally important to know where the market is on this map at all times, the main model buy and sell signals are generated only from this VP map... the trade rules, which you probably already know by now, are very simple and are explained below...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 9/22/16

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... when in NEUTRAL, the BTIT would again reinstate the most recent UP or DOWN trend bias upon the penetration and close of the nearest recent ceiling/floor...

A close below 2161.36 would turn the BTIT to neutral...

A close below 2101.89 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

A long position will be taken when the BTIT turns up and a short position when the BTIT turns down... when the BTIT turns neutral, the position is then closed and will remain flat...

The BTIT is primarily a direction indicator and not a signal indicator, although this format can easily be used as a trading strategy designed for those who prefer a broader longer term trade position without close monitoring... be advised, the price swings are also significantly wider so caution is always highly advised and only a modest position should be taken for this strategy...

The BTIT current trade position: Long from 2154.40 as of 9/2/16 - - there are 13 completed trades for a total gain of 265.00 SP points...

For the BTIT strategy, attention to the market action is still required, treating the signal price the same as a VP signal price... attempting this strategy on a close only basis has not proven successful...

THE MEGA TREND INDICATOR (MTI) - - UP as of 7/29/16

This is a front loaded comparative month by month trading range and weighted average rate of change of the most recent 11 and 14 months and is calculated on the last market day of each month...

A monthly close for October below 2036.09 would turn the MTI to neutral...

A monthly close for October below 1926.10 would turn the MTI to down...

The MTI current trade position: Long from 2168.20, the closing price on 7/29/16...

This model's buy signal is based on the Coppock Curve and has been back tested to 1914 with the DJIA... there have been a total of 22 previous buy signals over the past 102 years since 1914... of the 22 previous buy signals, only two false signals were given, they were given in October, 1938 and in January, 1948... this is a 90.9% accuracy rate since 1914... realize, this is a monthly indicator and these markets can move widely in both directions during mid month...

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 when the opportunity presents itself... also, look at the 1/3 Rule for easy position entry with much less risk...

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... I prefer to combine the Hoban Rule with the 1/3 Rule for more active market participation...

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 38 trades for a net gain of 259.80 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 VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a gross gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016, no action was taken as of today...

The NT (Near Term) indicator
The NT indicator continues higher today and is now deeply into the overbought zone...
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IF YOU PREFER A LONGER TERM TRADING STRATEGY WITHOUT THE FREQUENT VP INS AND OUTS AND ALL THAT MID DAY MARKET NOISE, THEN YOU MAY WELL CONSIDER THE BTIT INDICATOR OR THE LT INDICATOR TRADING METHOD FOR LONGER TERM POSITION TRADING... CHECK THE TUTORIAL BELOW TO LEARN HOW TO USE THESE METHODS EFFECTIVELY...

THE FLAT LINE INDICATOR

All key line look positive while the NT indicator is overbought... so, we could see some selling early next week, but nothing yet to say this is a top of any sort... the momentum line still looks healthy for now... it is noteworthy that while the market was up considerably today, that the flat line has turned downward... this means that the anti price which is currently below the market is moving higher faster than the market itself...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The momentum line still inches higher, but it needs more strength from the market itself to sustain a continued rise...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 9/30/16

A close above 1345.78 would turn the BTIT to up...

A close below 1316.05 would turn the BTIT to down...

The main model is now short the December gold from 1335.20 as of Tuesday, September 27th...

The last trade as of this writing is at 1320.00 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Monday, a close above 1335.10 in the December Gold contract would confirm a new main model buy signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule was expressly designed for the SP market and no other market at this time)

Rationale: A VP at 1335.11...

GOLD DECEMBER VP PRICES

MAJOR - - 1381.72 and must close below that price on Monday, October 17th to confirm a new main model sell signal...

minor - - 1361.54

minor - - 1335.11

TODAY'S CLOSING PRICE - - 1320.00

SVP - - none

minor - - 1302.85

MAJOR - - 1279.59 and must close above that price on Thursday, October 13th to confirm a new main model buy signal...

The above is a price map in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...

All key lines are still moving lower and the BTIT turned from up to neutral today... stay short this market...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The momentum is still moving lower, stay short for now...

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The Main Model Formula

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.

USE ONLY THE LARGE SP FUTURES CONTRACT FOR ALL SIGNALS, THE MINI CONTRACT WILL GIVE YOU FALSE SIGNALS... AND THEN, ONCE A SIGNAL IS TRIGGERED (AND CONFIRMED), THEN YOU CAN TRADE ANY OTHER MARKET FROM THAT SIGNAL...

Light Positions:

It's always wise to hold only a light position in order to tolerate the wild price action of this market... also, if you're not nimble with these markets, then you may want to wait until the market closes for the day to be sure that any new signal is confirmed, this will eliminate all possible mid day whips... to be safer overnight, consider using an exit stop for capital preservation...

Trailing Stops:

Also, trailing stops are completely individual, it is presume that subscribers would have their own personal strategy on how and when to enter and exit the trade, these market can often be vicious... the VP points tell you where and if the market is about to move in one or another direction... for myself, I like to take profits at any time I get the sense I'm satisfied, I don't need to ride out every signal all the way to the last stop, it's really not necessary...

Trading Strategy:

Also, if you're having difficulty with these markets, I strongly urge that you consider a combination of the Hoban Rule and the 1/3 Rule to enter the trade positions, or just wait until the next morning to find a comfortable place to enter the trade, there's never a hurry... this will eliminate all whips...

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...

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 FLAT LINE INDICATOR

The FLI is a handy and easy to read two graph tool to see market tops and bottoms as they occur, the nimble trader could use this FLI each day to enter a trade position based only on the precision data on this graph, this graph includes 2 1/2 years of daily price data...

The FLI will give you more confidence when taking the VP signals...

The FLI lines are color coded for easy reference, there are only three lines to follow...

The color coded lines are:

Price Line - this is the actual daily closing price for the SP front month futures contract, this price is read on the left side of the graph...

Anti Price Line - this is the "shadow" price, this is the price required for the market to close that day for a change in direction to occur, this price is also read on the left side of the graph...

SP Flat Line - this line shows the difference in SP points between the Price Line and the Anti Price Line (PL minus APL), this line is read on the right side of the graph...

Broader Trend Line - this line tells you the broader direction of the market...

When reading this graph you will notice:

1. The flat line tops and bottoms occur right at the actual market price tops and bottoms...

2. when the price line crosses through the anti price line, then the flat line crosses through the zero value turning the flat line to neutral, and therefore the name flat line...

3. The flat line in the second graph crosses above and below the momentum line as a leading indicator ahead of the actual change in market direction...

4. The momentum line in the second graph tells you the market's strength of speed and you will notice how the flat line in that graph turns and crosses through the momentum line ahead of the market itself...

5. The optimal time to take a flat line trade position is when the flat line spike occurs simultaneously with a confirmed VP signal although this tool provides numerous other trade opportunities beyond the VP signals for the more aggressive trader...

Study the relation ships between the three lines at your leisure and you will make these and additional observations which can be useful trading tools...

THE LT PRICE AND MOMENTUM GRAPH

The momentum line very closely correlates with the market price...

THE VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a gross gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

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, September 30th

A celebrity is a person who works hard all his life to become well known, and then wears dark glasses to avoid being recognized.

* * * Fred Allen

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...

TOMORROW'S SP TRADE STRATEGY:

For Friday, a close below 2148.10 in the DECEMBER contract would confirm a new main model sell signal... be sure to review the VP price map directly below for additional VP points that may trigger a buy/sell signal...

For Hoban Rule traders, you are currently flat this market... enter a new short position with a close between 2143.10 and 2142.10... if filled, then place an exit stop to go flat at 2150.10... please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A VP at 2148.01...

The last trade at this writing is at 2148.50 in the December...

The main model is now long the December SP from 2148.10 as of Thursday, September 29th...

This market traded down today without looking back, we had a sell signal with a move below 2161.40, but then the market sold down below 2148.10 and then close above it to give us a confirmed buy signal right on the close... as always, this market does nothing more than move like a ping pong ball between VP points, that's all it ever does, this is why the VP prices are so key to trading this market...

THE VP PRICE MAP FOR TOMORROW

The VP map tells you everything you need to know, consult the map daily... knowing the map and the two key trading rules will make you a much more savvy trader, so it is extremely important to be familiar with the VP map...

Secondary Vertical Prices (SVP) are for the aggressive trader who is looking for an additional edge on additional exhaustion points... you will notice that the market responds as well to the SVP as to the standard VP points and are traded the same, but for now the main model will use only the standard VP points for official main model signals...

SP DECEMBER VP PRICES

MAJOR - - 2225.77 and must close below that price on Thursday, October 27th to confirm a new main model sell signal...

MAJOR - - 2218.73 and must close below that price on Wednesday, November 9th to confirm a new main model sell signal...

minor - - 2191.901

minor - - 2185.43

MAJOR - - 2161.36 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

SVP - - 2157.03

MAJOR - - 2156.16 and must close below that price on Tuesday, October 4th to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2148.50

minor - - 2148.01

minor - - 2124.23

minor - - 2105.51

MAJOR - - 2103.89 and must close above that price on Thursday, October 27th to confirm a new main model buy signal...

minor - - 2095.48

MAJOR - - 2064.604 and must close above that price on Tuesday, November 1st to confirm a new main model buy signal...

SVP - - 2062.39

The above price map is listed in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

PLEASE NOTE: It is vitally important to know where the market is on this map at all times, the main model buy and sell signals are generated only from this VP map... the trade rules, which you probably already know by now, are very simple and are explained below...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 9/22/16

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... when in NEUTRAL, the BTIT would again reinstate the most recent UP or DOWN trend bias upon the penetration and close of the nearest recent ceiling/floor...

A close below 2139.21 would turn the BTIT to neutral...

A close below 2101.89 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

A long position will be taken when the BTIT turns up and a short position when the BTIT turns down... when the BTIT turns neutral, the position is then closed and will remain flat...

The BTIT is primarily a direction indicator and not a signal indicator, although this format can easily be used as a trading strategy designed for those who prefer a broader longer term trade position without close monitoring... be advised, the price swings are also significantly wider so caution is always highly advised and only a modest position should be taken for this strategy...

The BTIT current trade position: Long from 2154.40 as of 9/2/16 - - there are 13 completed trades for a total gain of 265.00 SP points...

For the BTIT strategy, attention to the market action is still required, treating the signal price the same as a VP signal price... attempting this strategy on a close only basis has not proven successful...

THE MEGA TREND INDICATOR (MTI) - - UP as of 7/29/16

This is a front loaded comparative month by month trading range and weighted average rate of change of the most recent 11 and 14 months and is calculated on the last market day of each month...

A monthly close for September below 2066.601 would turn the MTI to neutral...

A monthly close for September below 1926.10 would turn the MTI to down...

The MTI current trade position: Long from 2168.20, the closing price on 7/29/16...

This model's buy signal is based on the Coppock Curve and has been back tested to 1914 with the DJIA... there have been a total of 22 previous buy signals over the past 102 years since 1914... of the 22 previous buy signals, only two false signals were given, they were given in October, 1938 and in January, 1948... this is a 90.9% accuracy rate since 1914... realize, this is a monthly indicator and these markets can move widely in both directions during mid month...

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 when the opportunity presents itself... also, look at the 1/3 Rule for easy position entry with much less risk...

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... I prefer to combine the Hoban Rule with the 1/3 Rule for more active market participation...

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 38 trades for a net gain of 259.80 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 VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a gross gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016, no action was taken as of today...

The NT (Near Term) indicator
While the market moved lower today, the NT indicator actually moved higher... but not yet overbought...
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IF YOU PREFER A LONGER TERM TRADING STRATEGY WITHOUT THE FREQUENT VP INS AND OUTS AND ALL THAT MID DAY MARKET NOISE, THEN YOU MAY WELL CONSIDER THE BTIT INDICATOR OR THE LT INDICATOR TRADING METHOD FOR LONGER TERM POSITION TRADING... CHECK THE TUTORIAL BELOW TO LEARN HOW TO USE THESE METHODS EFFECTIVELY...

THE FLAT LINE INDICATOR

What is noteworthy today is that the momentum line still moves higher... also, notice that the flat line is beginning to move into the upper ranges which also illustrates that the market price is still well above the anti price... this suggests the market could still work higher from here...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line is beginning to pause right here... let's see what tomorrow brings...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 6/13/16

A close below 1320.98 would turn the BTIT from up to neutral...

A close below 1305.51 would turn the BTIT from neutral to down...

The main model is now short the December gold from 1335.20 as of Tuesday, September 27th...

The last trade as of this writing is at 1324.40 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Friday, a close above 1335.10 in the December Gold contract would confirm a new main model buy signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule was expressly designed for the SP market and no other market at this time)

Rationale: A VP at 1335.11...

GOLD DECEMBER VP PRICES

MAJOR - - 1381.72 and must close below that price on Monday, October 17th to confirm a new main model sell signal...

minor - - 1361.54

minor - - 1335.11

TODAY'S CLOSING PRICE - - 1324.40

SVP - - none

minor - - 1302.85

MAJOR - - 1279.59 and must close above that price on Thursday, October 13th to confirm a new main model buy signal...

The above is a price map in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...

This market continues looking seriously toppy... any further decline will turn the BTIT from up to neutral... this market needs to rally here or it could see another major decline from current levels...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT graph shows the momentum line continuing downward...

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The Main Model Formula

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.

USE ONLY THE LARGE SP FUTURES CONTRACT FOR ALL SIGNALS, THE MINI CONTRACT WILL GIVE YOU FALSE SIGNALS... AND THEN, ONCE A SIGNAL IS TRIGGERED (AND CONFIRMED), THEN YOU CAN TRADE ANY OTHER MARKET FROM THAT SIGNAL...

Light Positions:

It's always wise to hold only a light position in order to tolerate the wild price action of this market... also, if you're not nimble with these markets, then you may want to wait until the market closes for the day to be sure that any new signal is confirmed, this will eliminate all possible mid day whips... to be safer overnight, consider using an exit stop for capital preservation...

Trailing Stops:

Also, trailing stops are completely individual, it is presume that subscribers would have their own personal strategy on how and when to enter and exit the trade, these market can often be vicious... the VP points tell you where and if the market is about to move in one or another direction... for myself, I like to take profits at any time I get the sense I'm satisfied, I don't need to ride out every signal all the way to the last stop, it's really not necessary...

Trading Strategy:

Also, if you're having difficulty with these markets, I strongly urge that you consider a combination of the Hoban Rule and the 1/3 Rule to enter the trade positions, or just wait until the next morning to find a comfortable place to enter the trade, there's never a hurry... this will eliminate all whips...

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...

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 FLAT LINE INDICATOR

The FLI is a handy and easy to read two graph tool to see market tops and bottoms as they occur, the nimble trader could use this FLI each day to enter a trade position based only on the precision data on this graph, this graph includes 2 1/2 years of daily price data...

The FLI will give you more confidence when taking the VP signals...

The FLI lines are color coded for easy reference, there are only three lines to follow...

The color coded lines are:

Price Line - this is the actual daily closing price for the SP front month futures contract, this price is read on the left side of the graph...

Anti Price Line - this is the "shadow" price, this is the price required for the market to close that day for a change in direction to occur, this price is also read on the left side of the graph...

SP Flat Line - this line shows the difference in SP points between the Price Line and the Anti Price Line (PL minus APL), this line is read on the right side of the graph...

Broader Trend Line - this line tells you the broader direction of the market...

When reading this graph you will notice:

1. The flat line tops and bottoms occur right at the actual market price tops and bottoms...

2. when the price line crosses through the anti price line, then the flat line crosses through the zero value turning the flat line to neutral, and therefore the name flat line...

3. The flat line in the second graph crosses above and below the momentum line as a leading indicator ahead of the actual change in market direction...

4. The momentum line in the second graph tells you the market's strength of speed and you will notice how the flat line in that graph turns and crosses through the momentum line ahead of the market itself...

5. The optimal time to take a flat line trade position is when the flat line spike occurs simultaneously with a confirmed VP signal although this tool provides numerous other trade opportunities beyond the VP signals for the more aggressive trader...

Study the relation ships between the three lines at your leisure and you will make these and additional observations which can be useful trading tools...

THE LT PRICE AND MOMENTUM GRAPH

The momentum line very closely correlates with the market price...

THE VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a gross gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

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, September 29th

A celebrity is a person who works hard all his life to become well known, and then wears dark glasses to avoid being recognized.

* * * Fred Allen

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...

TOMORROW'S SP TRADE STRATEGY:
For Thursday, a close below 2161.40 in the DECEMBER contract would confirm a new main model sell signal... be sure to review the VP price map directly below for additional VP points that may trigger a buy/sell signal...

For Hoban Rule traders, you were stopped out at 2154.20 after the market rallied above 2156.20 and then sold off at least two points to exit the trade, a one point gain was made for this trade... you are currently flat this market... enter a new short position with a close between 2156.40 and 2155.40... if filled, then place an exit stop to go flat at 2163.40... please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A major VP at 2161.36...

The last trade at this writing is at 2163.20 in the December...

The main model is now long the December SP from 2148.00 as of Tuesday, September 27th...

A solid rally today...

THE VP PRICE MAP FOR TOMORROW

The VP map tells you everything you need to know, consult the map daily... knowing the map and the two key trading rules will make you a much more savvy trader, so it is extremely important to be familiar with the VP map...

Secondary Vertical Prices (SVP) are for the aggressive trader who is looking for an additional edge on additional exhaustion points... you will notice that the market responds as well to the SVP as to the standard VP points and are traded the same, but for now the main model will use only the standard VP points for official main model signals...

SP DECEMBER VP PRICES

MAJOR - - 2225.77 and must close below that price on Thursday, October 27th to confirm a new main model sell signal...

MAJOR - - 2218.73 and must close below that price on Wednesday, November 9th to confirm a new main model sell signal...

minor - - 2191.901

minor - - 2185.43

TODAY'S CLOSING PRICE - - 2163.20

MAJOR - - 2161.36 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

SVP - - 2157.03

MAJOR - - 2156.16 and must close below that price on Tuesday, October 4th to confirm a new main model sell signal...

minor - - 2148.01

minor - - 2124.23

minor - - 2105.51

MAJOR - - 2103.89 and must close above that price on Thursday, October 27th to confirm a new main model buy signal...

minor - - 2095.48

MAJOR - - 2064.604 and must close above that price on Tuesday, November 1st to confirm a new main model buy signal...

SVP - - 2062.39

The above price map is listed in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

PLEASE NOTE: It is vitally important to know where the market is on this map at all times, the main model buy and sell signals are generated only from this VP map... the trade rules, which you probably already know by now, are very simple and are explained below...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 9/22/16

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... when in NEUTRAL, the BTIT would again reinstate the most recent UP or DOWN trend bias upon the penetration and close of the nearest recent ceiling/floor...

A close below 2134.97 would turn the BTIT to neutral...

A close below 2101.89 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

A long position will be taken when the BTIT turns up and a short position when the BTIT turns down... when the BTIT turns neutral, the position is then closed and will remain flat...

The BTIT is primarily a direction indicator and not a signal indicator, although this format can easily be used as a trading strategy designed for those who prefer a broader longer term trade position without close monitoring... be advised, the price swings are also significantly wider so caution is always highly advised and only a modest position should be taken for this strategy...

The BTIT current trade position: Long from 2154.40 as of 9/2/16 - - there are 13 completed trades for a total gain of 265.00 SP points...

For the BTIT strategy, attention to the market action is still required, treating the signal price the same as a VP signal price... attempting this strategy on a close only basis has not proven successful...

THE MEGA TREND INDICATOR (MTI) - - UP as of 7/29/16

This is a front loaded comparative month by month trading range and weighted average rate of change of the most recent 11 and 14 months and is calculated on the last market day of each month...

A monthly close for September below 2066.601 would turn the MTI to neutral...

A monthly close for September below 1926.10 would turn the MTI to down...

The MTI current trade position: Long from 2168.20, the closing price on 7/29/16...

This model's buy signal is based on the Coppock Curve and has been back tested to 1914 with the DJIA... there have been a total of 22 previous buy signals over the past 102 years since 1914... of the 22 previous buy signals, only two false signals were given, they were given in October, 1938 and in January, 1948... this is a 90.9% accuracy rate since 1914... realize, this is a monthly indicator and these markets can move widely in both directions during mid month...

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 when the opportunity presents itself... also, look at the 1/3 Rule for easy position entry with much less risk...

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... I prefer to combine the Hoban Rule with the 1/3 Rule for more active market participation...

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 38 trades for a net gain of 259.80 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 VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a gross gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016, no action was taken as of today...

The NT (Near Term) indicator
A nice up tick in today's NT indicator... and the market is not yet over bought...
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IF YOU PREFER A LONGER TERM TRADING STRATEGY WITHOUT THE FREQUENT VP INS AND OUTS AND ALL THAT MID DAY MARKET NOISE, THEN YOU MAY WELL CONSIDER THE BTIT INDICATOR OR THE LT INDICATOR TRADING METHOD FOR LONGER TERM POSITION TRADING... CHECK THE TUTORIAL BELOW TO LEARN HOW TO USE THESE METHODS EFFECTIVELY...

THE FLAT LINE INDICATOR

The market continues higher... notice that the market has closed above the anti price since September 21st... this trend looks steady... and the momentum line is also moving higher nicely...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line appears to have bottomed at the same place many previous momentum line bottoms were made... this foretells of a possibly more significant rally is now under way... as they say, don't fight the tape...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 6/13/16

A close below 1320.98 would turn the BTIT from up to neutral...

A close below 1305.51 would turn the BTIT from neutral to down...

The main model is now short the December gold from 1335.20 as of Tuesday, September 27th...

The last trade as of this writing is at 1326.60 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Thursday, a close above 1335.10 in the December Gold contract would confirm a new main model buy signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule was expressly designed for the SP market and no other market at this time)

Rationale: A VP at 1335.11...

GOLD DECEMBER VP PRICES

MAJOR - - 1381.72 and must close below that price on Monday, October 17th to confirm a new main model sell signal...

minor - - 1361.54

minor - - 1335.11

TODAY'S CLOSING PRICE - - 1326.60

SVP - - none

minor - - 1302.85

MAJOR - - 1279.59 and must close above that price on Thursday, October 13th to confirm a new main model buy signal...

The above is a price map in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...

While all key lines continue downward, notice that the flat line turned higher today even though the market was down a good amount... we could see a turn around in this market, possibly soon...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line continues lower today, but is actually slowing down its descent as of today, let's watch this market for a possible turn upward from here...

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The Main Model Formula

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.

USE ONLY THE LARGE SP FUTURES CONTRACT FOR ALL SIGNALS, THE MINI CONTRACT WILL GIVE YOU FALSE SIGNALS... AND THEN, ONCE A SIGNAL IS TRIGGERED (AND CONFIRMED), THEN YOU CAN TRADE ANY OTHER MARKET FROM THAT SIGNAL...

Light Positions:

It's always wise to hold only a light position in order to tolerate the wild price action of this market... also, if you're not nimble with these markets, then you may want to wait until the market closes for the day to be sure that any new signal is confirmed, this will eliminate all possible mid day whips... to be safer overnight, consider using an exit stop for capital preservation...

Trailing Stops:

Also, trailing stops are completely individual, it is presume that subscribers would have their own personal strategy on how and when to enter and exit the trade, these market can often be vicious... the VP points tell you where and if the market is about to move in one or another direction... for myself, I like to take profits at any time I get the sense I'm satisfied, I don't need to ride out every signal all the way to the last stop, it's really not necessary...

Trading Strategy:

Also, if you're having difficulty with these markets, I strongly urge that you consider a combination of the Hoban Rule and the 1/3 Rule to enter the trade positions, or just wait until the next morning to find a comfortable place to enter the trade, there's never a hurry... this will eliminate all whips...

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...

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 FLAT LINE INDICATOR

The FLI is a handy and easy to read two graph tool to see market tops and bottoms as they occur, the nimble trader could use this FLI each day to enter a trade position based only on the precision data on this graph, this graph includes 2 1/2 years of daily price data...

The FLI will give you more confidence when taking the VP signals...

The FLI lines are color coded for easy reference, there are only three lines to follow...

The color coded lines are:

Price Line - this is the actual daily closing price for the SP front month futures contract, this price is read on the left side of the graph...

Anti Price Line - this is the "shadow" price, this is the price required for the market to close that day for a change in direction to occur, this price is also read on the left side of the graph...

SP Flat Line - this line shows the difference in SP points between the Price Line and the Anti Price Line (PL minus APL), this line is read on the right side of the graph...

Broader Trend Line - this line tells you the broader direction of the market...

When reading this graph you will notice:

1. The flat line tops and bottoms occur right at the actual market price tops and bottoms...

2. when the price line crosses through the anti price line, then the flat line crosses through the zero value turning the flat line to neutral, and therefore the name flat line...

3. The flat line in the second graph crosses above and below the momentum line as a leading indicator ahead of the actual change in market direction...

4. The momentum line in the second graph tells you the market's strength of speed and you will notice how the flat line in that graph turns and crosses through the momentum line ahead of the market itself...

5. The optimal time to take a flat line trade position is when the flat line spike occurs simultaneously with a confirmed VP signal although this tool provides numerous other trade opportunities beyond the VP signals for the more aggressive trader...

Study the relation ships between the three lines at your leisure and you will make these and additional observations which can be useful trading tools...

THE LT PRICE AND MOMENTUM GRAPH

The momentum line very closely correlates with the market price...

THE VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a gross gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

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, September 28th

With self-discipline most anything is possible.

* * * Author Unknown

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...

TOMORROW'S SP TRADE STRATEGY:

For Wednesday, a close below 2148.10 in the DECEMBER contract would confirm a new main model sell signal... be sure to review the VP price map directly below for additional VP points that may trigger a buy/sell signal...

For Hoban Rule traders, you are currently long this market from about 2153.20... place an exit stop to go flat at 2146.00... also, enter a new short position with a close below 2143.10 and 2142.10... if filled, then place an exit stop to go flat at 2150.10... please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A VP at 2148.01...

The last trade at this writing is at 2153.20 in the December...

The main model is now long the December SP from 2148.00 as of Tuesday, September 27th...

A very nice turn around today...

THE VP PRICE MAP FOR TOMORROW

The VP map tells you everything you need to know, consult the map daily... knowing the map and the two key trading rules will make you a much more savvy trader, so it is extremely important to be familiar with the VP map...

Secondary Vertical Prices (SVP) are for the aggressive trader who is looking for an additional edge on additional exhaustion points... you will notice that the market responds as well to the SVP as to the standard VP points and are traded the same, but for now the main model will use only the standard VP points for official main model signals...

DECEMBER VP PRICES

MAJOR - - 2225.77 and must close below that price on Thursday, October 27th to confirm a new main model sell signal...

MAJOR - - 2218.73 and must close below that price on Wednesday, November 9th to confirm a new main model sell signal...

minor - - 2191.901

minor - - 2185.43

MAJOR - - 2161.36 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

SVP - - 2157.03

MAJOR - - 2156.16 and must close below that price on Tuesday, October 4th to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2153.20

minor - - 2148.01

minor - - 2124.23

MAJOR - - 2103.89 and must close above that price on Thursday, October 27th to confirm a new main model buy signal...

minor - - 2095.48

minor - - 2105.51

MAJOR - - 2064.604 and must close above that price on Tuesday, November 1st to confirm a new main model buy signal...

SVP - - 2062.39

The above price map is listed in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

PLEASE NOTE: It is vitally important to know where the market is on this map at all times, the main model buy and sell signals are generated only from this VP map... the trade rules, which you probably already know by now, are very simple and are explained below...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 9/22/16

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... when in NEUTRAL, the BTIT would again reinstate the most recent UP or DOWN trend bias upon the penetration and close of the nearest recent ceiling/floor...

A close below 2112.73 would turn the BTIT to neutral...

A close below 2101.89 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

A long position will be taken when the BTIT turns up and a short position when the BTIT turns down... when the BTIT turns neutral, the position is then closed and will remain flat...

The BTIT is primarily a direction indicator and not a signal indicator, although this format can easily be used as a trading strategy designed for those who prefer a broader longer term trade position without close monitoring... be advised, the price swings are also significantly wider so caution is always highly advised and only a modest position should be taken for this strategy...

The BTIT current trade position: Long from 2154.40 as of 9/2/16 - - there are 13 completed trades for a total gain of 265.00 SP points...

For the BTIT strategy, attention to the market action is still required, treating the signal price the same as a VP signal price... attempting this strategy on a close only basis has not proven successful...

THE MEGA TREND INDICATOR (MTI) - - UP as of 7/29/16

This is a front loaded comparative month by month trading range and weighted average rate of change of the most recent 11 and 14 months and is calculated on the last market day of each month...

A monthly close for September below 2066.601 would turn the MTI to neutral...

A monthly close for September below 1926.10 would turn the MTI to down...

The MTI current trade position: Long from 2168.20, the closing price on 7/29/16...

This model's buy signal is based on the Coppock Curve and has been back tested to 1914 with the DJIA... there have been a total of 22 previous buy signals over the past 102 years since 1914... of the 22 previous buy signals, only two false signals were given, they were given in October, 1938 and in January, 1948... this is a 90.9% accuracy rate since 1914... realize, this is a monthly indicator and these markets can move widely in both directions during mid month...

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 when the opportunity presents itself... also, look at the 1/3 Rule for easy position entry with much less risk...

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... I prefer to combine the Hoban Rule with the 1/3 Rule for more active market participation...

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 38 trades for a net gain of 259.80 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 VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

The NT (Near Term) indicator
A down spike in the NT indicator for today...
image-7

IF YOU PREFER A LONGER TERM TRADING STRATEGY WITHOUT THE FREQUENT VP INS AND OUTS AND ALL THAT MID DAY MARKET NOISE, THEN YOU MAY WELL CONSIDER THE BTIT INDICATOR OR THE LT INDICATOR TRADING METHOD FOR LONGER TERM POSITION TRADING... CHECK THE TUTORIAL BELOW TO LEARN HOW TO USE THESE METHODS EFFECTIVELY...

THE FLAT LINE INDICATOR

Both the market price and the anti price are moving higher, and the momentum line also is moving higher... so far so good...

image-8
image-9

THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line has again turned upward as of today... we need one more day of upside follow through to feel better...

image-10

The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 6/13/16

A close below 1312.51 would turn the BTIT from up to neutral...

A close below 1305.51 would turn the BTIT from neutral to down...

The main model is now short the December gold from 1335.20 as of Tuesday, September 27th...

The last trade as of this writing is at 1330.90 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Wednesday, a close above 1335.10 in the December Gold contract would confirm a new main model buy signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule was expressly designed for the SP market and no other market at this time)

Rationale: A VP at 1335.11...

THE VP PRICE MAP FOR TOMORROW

MAJOR - - 1381.72 and must close below that price on Monday, October 17th to confirm a new main model sell signal...

minor - - 1361.54

minor - - 1335.11

TODAY'S CLOSING PRICE - - 1330.90

SVP - - none

minor - - 1302.85

MAJOR - - 1279.59 and must close above that price on Thursday, October 13th to confirm a new main model buy signal...

The above is a price map in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...

Everything is moving lower as of today... the market is below the anti price, the flat line has crossed down below zero, and the momentum line is also moving lower... it looks like short may well be the best play for this market right now...

image-11
image-12

THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line is now also moving downward as of today... it looks as if the downside momentum has gained steam...

image-13

The Main Model Formula

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.

USE ONLY THE LARGE SP FUTURES CONTRACT FOR ALL SIGNALS, THE MINI CONTRACT WILL GIVE YOU FALSE SIGNALS... AND THEN, ONCE A SIGNAL IS TRIGGERED (AND CONFIRMED), THEN YOU CAN TRADE ANY OTHER MARKET FROM THAT SIGNAL...

Light Positions:

It's always wise to hold only a light position in order to tolerate the wild price action of this market... also, if you're not nimble with these markets, then you may want to wait until the market closes for the day to be sure that any new signal is confirmed, this will eliminate all possible mid day whips... to be safer overnight, consider using an exit stop for capital preservation...

Trailing Stops:

Also, trailing stops are completely individual, it is presume that subscribers would have their own personal strategy on how and when to enter and exit the trade, these market can often be vicious... the VP points tell you where and if the market is about to move in one or another direction... for myself, I like to take profits at any time I get the sense I'm satisfied, I don't need to ride out every signal all the way to the last stop, it's really not necessary...

Trading Strategy:

Also, if you're having difficulty with these markets, I strongly urge that you consider a combination of the Hoban Rule and the 1/3 Rule to enter the trade positions, or just wait until the next morning to find a comfortable place to enter the trade, there's never a hurry... this will eliminate all whips...

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...

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 FLAT LINE INDICATOR

The FLI is a handy and easy to read two graph tool to see market tops and bottoms as they occur, the nimble trader could use this FLI each day to enter a trade position based only on the precision data on this graph, this graph includes 2 1/2 years of daily price data...

The FLI will give you more confidence when taking the VP signals...

The FLI lines are color coded for easy reference, there are only three lines to follow...

The color coded lines are:

Price Line - this is the actual daily closing price for the SP front month futures contract, this price is read on the left side of the graph...

Anti Price Line - this is the "shadow" price, this is the price required for the market to close that day for a change in direction to occur, this price is also read on the left side of the graph...

SP Flat Line - this line shows the difference in SP points between the Price Line and the Anti Price Line (PL minus APL), this line is read on the right side of the graph...

Broader Trend Line - this line tells you the broader direction of the market...

When reading this graph you will notice:

1. The flat line tops and bottoms occur right at the actual market price tops and bottoms...

2. when the price line crosses through the anti price line, then the flat line crosses through the zero value turning the flat line to neutral, and therefore the name flat line...

3. The flat line in the second graph crosses above and below the momentum line as a leading indicator ahead of the actual change in market direction...

4. The momentum line in the second graph tells you the market's strength of speed and you will notice how the flat line in that graph turns and crosses through the momentum line ahead of the market itself...

5. The optimal time to take a flat line trade position is when the flat line spike occurs simultaneously with a confirmed VP signal although this tool provides numerous other trade opportunities beyond the VP signals for the more aggressive trader...

Study the relation ships between the three lines at your leisure and you will make these and additional observations which can be useful trading tools...

THE LT PRICE AND MOMENTUM GRAPH

The momentum line very closely correlates with the market price...

THE VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

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, September 27th

With self-discipline most anything is possible.

* * * Author Unknown

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...

TOMORROW'S SP TRADE STRATEGY:
For Tuesday, a close above 2148.00 in the DECEMBER contract would confirm a new main model buy signal... be sure to review the VP price map directly below for additional VP points that may trigger a buy/sell signal...

For Hoban Rule traders, you are currently flat this market... take a long position with a close between 2153.00 and 2157.00 only... if filled, place an exit stop to go flat at 2146.00... also, please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A VP at 2148.01...

The last trade at this writing is at 2140.20 in the December...

The main model is now short the December SP from 2161.40 as of Friday, September 23rd...

Is this going to be the big one the bears have been waiting for???

THE VP PRICE MAP FOR TOMORROW

The VP map tells you everything you need to know, consult the map daily... knowing the map and the two key trading rules will make you a much more savvy trader, so it is extremely important to be familiar with the VP map...

Secondary Vertical Prices (SVP) are for the aggressive trader who is looking for an additional edge on additional exhaustion points... you will notice that the market responds as well to the SVP as to the standard VP points and are traded the same, but for now the main model will use only the standard VP points for official main model signals...

DECEMBER VP PRICES

MAJOR - - 2225.77 and must close below that price on Thursday, October 27th to confirm a new main model sell signal...

MAJOR - - 2218.73 and must close below that price on Wednesday, November 9th to confirm a new main model sell signal...

minor - - 2191.901

minor - - 2185.43

MAJOR - - 2161.36 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

SVP - - 2057.03

MAJOR - - 2156.16 and must close below that price on Tuesday, October 4th to confirm a new main model sell signal...

minor - - 2148.01

TODAY'S CLOSING PRICE - - 2140.20

minor - - 2124.23

MAJOR - - 2103.89 and must close above that price on Thursday, October 27th to confirm a new main model buy signal...

minor - - 2095.48

minor - - 2105.51

MAJOR - - 2064.604 and must close above that price on Tuesday, November 1st to confirm a new main model buy signal...

SVP - - 2062.39

The above price map is listed in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

PLEASE NOTE: It is vitally important to know where the market is on this map at all times, the main model buy and sell signals are generated only from this VP map... the trade rules, which you probably already know by now, are very simple and are explained below...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 9/22/16

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... when in NEUTRAL, the BTIT would again reinstate the most recent UP or DOWN trend bias upon the penetration and close of the nearest recent ceiling/floor...

A close below 2130.29 would turn the BTIT to neutral...

A close below 2101.89 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

A long position will be taken when the BTIT turns up and a short position when the BTIT turns down... when the BTIT turns neutral, the position is then closed and will remain flat...

The BTIT is primarily a direction indicator and not a signal indicator, although this format can easily be used as a trading strategy designed for those who prefer a broader longer term trade position without close monitoring... be advised, the price swings are also significantly wider so caution is always highly advised and only a modest position should be taken for this strategy...

The BTIT current trade position: Long from 2154.40 as of 9/2/16 - - there are 13 completed trades for a total gain of 265.00 SP points...

For the BTIT strategy, attention to the market action is still required, treating the signal price the same as a VP signal price... attempting this strategy on a close only basis has not proven successful...

THE MEGA TREND INDICATOR (MTI) - - UP as of 7/29/16

This is a front loaded comparative month by month trading range and weighted average rate of change of the most recent 11 and 14 months and is calculated on the last market day of each month...

A monthly close for September below 2066.601 would turn the MTI to neutral...

A monthly close for September below 1926.10 would turn the MTI to down...

The MTI current trade position: Long from 2168.20, the closing price on 7/29/16...

This model's buy signal is based on the Coppock Curve and has been back tested to 1914 with the DJIA... there have been a total of 22 previous buy signals over the past 102 years since 1914... of the 22 previous buy signals, only two false signals were given, they were given in October, 1938 and in January, 1948... this is a 90.9% accuracy rate since 1914... realize, this is a monthly indicator and these markets can move widely in both directions during mid month...

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 when the opportunity presents itself... also, look at the 1/3 Rule for easy position entry with much less risk...

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... I prefer to combine the Hoban Rule with the 1/3 Rule for more active market participation...

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 38 trades for a net gain of 259.80 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 VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

The NT (Near Term) indicator
Another day with no meaningful movement for the NT indicator...
image

IF YOU PREFER A LONGER TERM TRADING STRATEGY WITHOUT THE FREQUENT VP INS AND OUTS AND ALL THAT MID DAY MARKET NOISE, THEN YOU MAY WELL CONSIDER THE BTIT INDICATOR OR THE LT INDICATOR TRADING METHOD FOR LONGER TERM POSITION TRADING... CHECK THE TUTORIAL BELOW TO LEARN HOW TO USE THESE METHODS EFFECTIVELY...

THE FLAT LINE INDICATOR

It looks like the selling early this week has begun ans mentioned in Friday's evening briefing... even though the market closed lower, the flat line actually turned higher today... it could be forming a wiggle type top here, but it's still too soon to say... the momentum line continues higher...

image-1
image-2

THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line has now turned downward as of today... this suggests a more severe decline, but more downside follow though would be more convincing...

image-3

The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 6/13/16

A close below 1312.51 would turn the BTIT from up to neutral...

A close below 1305.51 would turn the BTIT from neutral to down...

The main model is now long the December gold from 1332.50 as of Wednesday, September 21st...

The last trade as of this writing is at 1340.90 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Tuesday, a close below 1335.20 in the December Gold contract would confirm a new main model sell signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule was expressly designed for the SP market and no other market at this time)

Rationale: A VP at 1335.11...

THE VP PRICE MAP FOR TOMORROW

MAJOR - - 1381.72 and must close below that price on Monday, October 17th to confirm a new main model sell signal...

minor - - 1361.54

TODAY'S CLOSING PRICE - - 1340.90

minor - - 1335.11

SVP - - none

minor - - 1302.85

MAJOR - - 1279.59 and must close above that price on Thursday, October 13th to confirm a new main model buy signal...

The above is a price map in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...

I see several things going on here in the GLD market... first of all, the market closed today below the anti price... and the momentum line which was bending sideways on Friday has now turned downward as of today... further downside follow through would not be helpful for this market...

image-4
image-5

THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line is slower to turn, let's keep a close watch on this one...

image-6

The Main Model Formula

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.

USE ONLY THE LARGE SP FUTURES CONTRACT FOR ALL SIGNALS, THE MINI CONTRACT WILL GIVE YOU FALSE SIGNALS... AND THEN, ONCE A SIGNAL IS TRIGGERED (AND CONFIRMED), THEN YOU CAN TRADE ANY OTHER MARKET FROM THAT SIGNAL...

Light Positions:

It's always wise to hold only a light position in order to tolerate the wild price action of this market... also, if you're not nimble with these markets, then you may want to wait until the market closes for the day to be sure that any new signal is confirmed, this will eliminate all possible mid day whips... to be safer overnight, consider using an exit stop for capital preservation...

Trailing Stops:

Also, trailing stops are completely individual, it is presume that subscribers would have their own personal strategy on how and when to enter and exit the trade, these market can often be vicious... the VP points tell you where and if the market is about to move in one or another direction... for myself, I like to take profits at any time I get the sense I'm satisfied, I don't need to ride out every signal all the way to the last stop, it's really not necessary...

Trading Strategy:

Also, if you're having difficulty with these markets, I strongly urge that you consider a combination of the Hoban Rule and the 1/3 Rule to enter the trade positions, or just wait until the next morning to find a comfortable place to enter the trade, there's never a hurry... this will eliminate all whips...

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...

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 FLAT LINE INDICATOR

The FLI is a handy and easy to read two graph tool to see market tops and bottoms as they occur, the nimble trader could use this FLI each day to enter a trade position based only on the precision data on this graph, this graph includes 2 1/2 years of daily price data...

The FLI will give you more confidence when taking the VP signals...

The FLI lines are color coded for easy reference, there are only three lines to follow...

The color coded lines are:

Price Line - this is the actual daily closing price for the SP front month futures contract, this price is read on the left side of the graph...

Anti Price Line - this is the "shadow" price, this is the price required for the market to close that day for a change in direction to occur, this price is also read on the left side of the graph...

SP Flat Line - this line shows the difference in SP points between the Price Line and the Anti Price Line (PL minus APL), this line is read on the right side of the graph...

Broader Trend Line - this line tells you the broader direction of the market...

When reading this graph you will notice:

1. The flat line tops and bottoms occur right at the actual market price tops and bottoms...

2. when the price line crosses through the anti price line, then the flat line crosses through the zero value turning the flat line to neutral, and therefore the name flat line...

3. The flat line in the second graph crosses above and below the momentum line as a leading indicator ahead of the actual change in market direction...

4. The momentum line in the second graph tells you the market's strength of speed and you will notice how the flat line in that graph turns and crosses through the momentum line ahead of the market itself...

5. The optimal time to take a flat line trade position is when the flat line spike occurs simultaneously with a confirmed VP signal although this tool provides numerous other trade opportunities beyond the VP signals for the more aggressive trader...

Study the relation ships between the three lines at your leisure and you will make these and additional observations which can be useful trading tools...

THE LT PRICE AND MOMENTUM GRAPH

The momentum line very closely correlates with the market price...

THE VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

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, September 26th

I'm having an out of money experience.

* * * Author Unknown

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...

TOMORROW'S SP TRADE STRATEGY:

For Monday, a close above 2161.30 in the DECEMBER contract would confirm a new main model Buy signal... be sure to review the VP price map directly below for additional VP points that may trigger a buy/sell signal...

For Hoban Rule traders, you are currently flat this market... take a long position with a close between 2166.30 and 2167.30 only... if filled, place an exit stop to go flat at 2159.30... also, please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A major VP at 2161.36...

The last trade at this writing is at 2158.00 in the December...

The main model is now short the December SP from 2161.40 as of Friday, September 23rd...

Is this going to be the big one the bears have been waiting for???

THE VP PRICE MAP FOR TOMORROW

The VP map tells you everything you need to know, consult the map daily... knowing the map and the two key trading rules will make you a much more savvy trader, so it is extremely important to be familiar with the VP map...

Secondary Vertical Prices (SVP) are for the aggressive trader who is looking for an additional edge on additional exhaustion points... you will notice that the market responds as well to the SVP as to the standard VP points and are traded the same, but for now the main model will use only the standard VP points for official main model signals...

DECEMBER VP PRICES

MAJOR - - 2225.77 and must close below that price on Thursday, October 27th to confirm a new main model sell signal...

MAJOR - - 2218.73 and must close below that price on Wednesday, November 9th to confirm a new main model sell signal...

minor - - 2191.901

minor - - 2185.43

MAJOR - - 2161.36 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2158.00

SVP - - 2057.03

MAJOR - - 2156.16 and must close below that price on Tuesday, October 4th to confirm a new main model sell signal...

minor - - 2148.01

minor - - 2146.56

MAJOR - - 2134.53 and must close above that price on Monday, September 26th to confirm a new main model buy signal...

minor - - 2105.51

SVP - - 2062.39

The above price map is listed in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

PLEASE NOTE: It is vitally important to know where the market is on this map at all times, the main model buy and sell signals are generated only from this VP map... the trade rules, which you probably already know by now, are very simple and are explained below...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 9/22/16

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... when in NEUTRAL, the BTIT would again reinstate the most recent UP or DOWN trend bias upon the penetration and close of the nearest recent ceiling/floor...

A close below 2129.201 would turn the BTIT to neutral...

A close below 2073.62 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

A long position will be taken when the BTIT turns up and a short position when the BTIT turns down... when the BTIT turns neutral, the position is then closed and will remain flat...

The BTIT is primarily a direction indicator and not a signal indicator, although this format can easily be used as a trading strategy designed for those who prefer a broader longer term trade position without close monitoring... be advised, the price swings are also significantly wider so caution is always highly advised and only a modest position should be taken for this strategy...

The BTIT current trade position: Long from 2154.40 as of 9/2/16 - - there are 13 completed trades for a total gain of 265.00 SP points...

For the BTIT strategy, attention to the market action is still required, treating the signal price the same as a VP signal price... attempting this strategy on a close only basis has not proven successful...

THE MEGA TREND INDICATOR (MTI) - - UP as of 7/29/16

This is a front loaded comparative month by month trading range and weighted average rate of change of the most recent 11 and 14 months and is calculated on the last market day of each month...

A monthly close for September below 2066.601 would turn the MTI to neutral...

A monthly close for September below 1926.10 would turn the MTI to down...

The MTI current trade position: Long from 2168.20, the closing price on 7/29/16...

This model's buy signal is based on the Coppock Curve and has been back tested to 1914 with the DJIA... there have been a total of 22 previous buy signals over the past 102 years since 1914... of the 22 previous buy signals, only two false signals were given, they were given in October, 1938 and in January, 1948... this is a 90.9% accuracy rate since 1914... realize, this is a monthly indicator and these markets can move widely in both directions during mid month...

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 when the opportunity presents itself... also, look at the 1/3 Rule for easy position entry with much less risk...

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... I prefer to combine the Hoban Rule with the 1/3 Rule for more active market participation...

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 38 trades for a net gain of 259.80 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 VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange, and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

The NT (Near Term) indicator
No meaningful movement in the NT today...
image-1

IF YOU PREFER A LONGER TERM TRADING STRATEGY WITHOUT THE FREQUENT VP INS AND OUTS AND ALL THAT MID DAY MARKET NOISE, THEN YOU MAY WELL CONSIDER THE BTIT INDICATOR OR THE LT INDICATOR TRADING METHOD FOR LONGER TERM POSITION TRADING... CHECK THE TUTORIAL BELOW TO LEARN HOW TO USE THESE METHODS EFFECTIVELY...

THE FLAT LINE INDICATOR

Since the momentum line is still moving higher, this looks like only a near term pull back at the moment... expect a few days of selling beginning early next week...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line still continues higher, so this may well be just a temporary pull back beginning...

image-3

The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 6/13/16

A close below 1312.51 would turn the BTIT from up to neutral...

A close below 1305.51 would turn the BTIT from neutral to down...

The main model is now long the December gold from 1332.50 as of Wednesday, September 21st...

The last trade as of this writing is at 1341.50 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Monday, a close below 1335.20 in the December Gold contract would confirm a new main model sell signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule was expressly designed for the SP market and no other market at this time)

Rationale: A VP at 1335.11...

THE VP PRICE MAP FOR TOMORROW

MAJOR - - 1381.72 and must close below that price on Monday, October 17th to confirm a new main model sell signal...

minor - - 1361.54

TODAY'S CLOSING PRICE - - 1341.50

minor - - 1335.11

SVP - - none

minor - - 1302.85

MAJOR - - 1279.59 and must close above that price on Thursday, October 13th to confirm a new main model buy signal...

The above is a price map in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...

The momentum line continues higher although we can see the price line begin to bend sideways... we could see a possible few days lower, the flat line is beginning to form that wiggle pattern...

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image-5

THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The momentum line continues higher, this is encouraging...

image-6

The Main Model Formula

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.

USE ONLY THE LARGE SP FUTURES CONTRACT FOR ALL SIGNALS, THE MINI CONTRACT WILL GIVE YOU FALSE SIGNALS... AND THEN, ONCE A SIGNAL IS TRIGGERED (AND CONFIRMED), THEN YOU CAN TRADE ANY OTHER MARKET FROM THAT SIGNAL...

Light Positions:

It's always wise to hold only a light position in order to tolerate the wild price action of this market... also, if you're not nimble with these markets, then you may want to wait until the market closes for the day to be sure that any new signal is confirmed, this will eliminate all possible mid day whips... to be safer overnight, consider using an exit stop for capital preservation...

Trailing Stops:

Also, trailing stops are completely individual, it is presume that subscribers would have their own personal strategy on how and when to enter and exit the trade, these market can often be vicious... the VP points tell you where and if the market is about to move in one or another direction... for myself, I like to take profits at any time I get the sense I'm satisfied, I don't need to ride out every signal all the way to the last stop, it's really not necessary...

Trading Strategy:

Also, if you're having difficulty with these markets, I strongly urge that you consider a combination of the Hoban Rule and the 1/3 Rule to enter the trade positions, or just wait until the next morning to find a comfortable place to enter the trade, there's never a hurry... this will eliminate all whips...

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...

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 FLAT LINE INDICATOR

The FLI is a handy and easy to read two graph tool to see market tops and bottoms as they occur, the nimble trader could use this FLI each day to enter a trade position based only on the precision data on this graph, this graph includes 2 1/2 years of daily price data...

The FLI will give you more confidence when taking the VP signals...

The FLI lines are color coded for easy reference, there are only three lines to follow...

The color coded lines are:

Price Line - this is the actual daily closing price for the SP front month futures contract, this price is read on the left side of the graph...

Anti Price Line - this is the "shadow" price, this is the price required for the market to close that day for a change in direction to occur, this price is also read on the left side of the graph...

SP Flat Line - this line shows the difference in SP points between the Price Line and the Anti Price Line (PL minus APL), this line is read on the right side of the graph...

Broader Trend Line - this line tells you the broader direction of the market...

When reading this graph you will notice:

1. The flat line tops and bottoms occur right at the actual market price tops and bottoms...

2. when the price line crosses through the anti price line, then the flat line crosses through the zero value turning the flat line to neutral, and therefore the name flat line...

3. The flat line in the second graph crosses above and below the momentum line as a leading indicator ahead of the actual change in market direction...

4. The momentum line in the second graph tells you the market's strength of speed and you will notice how the flat line in that graph turns and crosses through the momentum line ahead of the market itself...

5. The optimal time to take a flat line trade position is when the flat line spike occurs simultaneously with a confirmed VP signal although this tool provides numerous other trade opportunities beyond the VP signals for the more aggressive trader...

Study the relation ships between the three lines at your leisure and you will make these and additional observations which can be useful trading tools...

THE LT PRICE AND MOMENTUM GRAPH

The momentum line very closely correlates with the market price...

THE VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange, and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

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, September 23rd

"A conclusion is the place where you get tired of thinking."

* * * Martin H. Fischer

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...

TOMORROW'S SP TRADE STRATEGY:

For Friday, a close below 2161.40 in the DECEMBER contract would confirm a new main model sell signal... be sure to review the VP price map directly below for additional VP points that may trigger a buy/sell signal...

For Hoban Rule traders, you are currently flat this market... take a short position with a close between 2141.60 and 2140.60 only... if filled, place an exit stop to go flat at 2148.60... also, please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A major VP at 2161.36...

The last trade at this writing is at 2169.00 in the December...

The main model is now long the December SP from 2134.50 as of Wednesday, September 21st...

A nervous market, but holding steady for now...

THE VP PRICE MAP FOR TOMORROW

The VP map tells you everything you need to know, consult the map daily... knowing the map and the two key trading rules will make you a much more savvy trader, so it is extremely important to be familiar with the VP map...

Secondary Vertical Prices (SVP) are for the aggressive trader who is looking for an additional edge on additional exhaustion points... you will notice that the market responds as well to the SVP as to the standard VP points and are traded the same, but for now the main model will use only the standard VP points for official main model signals...

DECEMBER VP PRICES

MAJOR - - 2225.77 and must close below that price on Thursday, October 27th to confirm a new main model sell signal...

MAJOR - - 2218.73 and must close below that price on Wednesday, November 9th to confirm a new main model sell signal...

minor - - 2191.901

minor - - 2185.43

TODAY'S CLOSING PRICE - - 2169.00

MAJOR - - 2161.36 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

SVP - - 2057.03

minor - - 2146.56

MAJOR - - 2134.53 and must close above that price on Monday, September 26th to confirm a new main model buy signal...

minor - - 2105.51

SVP - - 2062.39

The above price map is listed in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

PLEASE NOTE: It is vitally important to know where the market is on this map at all times, the main model buy and sell signals are generated only from this VP map... the trade rules, which you probably already know by now, are very simple and are explained below...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 9/22/16

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... when in NEUTRAL, the BTIT would again reinstate the most recent UP or DOWN trend bias upon the penetration and close of the nearest recent ceiling/floor...

A close below 2112.04 would turn the BTIT to neutral...

A close below 2073.62 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

A long position will be taken when the BTIT turns up and a short position when the BTIT turns down... when the BTIT turns neutral, the position is then closed and will remain flat...

The BTIT is primarily a direction indicator and not a signal indicator, although this format can easily be used as a trading strategy designed for those who prefer a broader longer term trade position without close monitoring... be advised, the price swings are also significantly wider so caution is always highly advised and only a modest position should be taken for this strategy...

The BTIT current trade position: Long from 2154.40 as of 9/2/16 - - there are 13 completed trades for a total gain of 265.00 SP points...

For the BTIT strategy, attention to the market action is still required, treating the signal price the same as a VP signal price... attempting this strategy on a close only basis has not proven successful...

THE MEGA TREND INDICATOR (MTI) - - UP as of 7/29/16

This is a front loaded comparative month by month trading range and weighted average rate of change of the most recent 11 and 14 months and is calculated on the last market day of each month...

A monthly close for September below 2066.601 would turn the MTI to neutral...

A monthly close for September below 1926.10 would turn the MTI to down...

The MTI current trade position: Long from 2168.20, the closing price on 7/29/16...

This model's buy signal is based on the Coppock Curve and has been back tested to 1914 with the DJIA... there have been a total of 22 previous buy signals over the past 102 years since 1914... of the 22 previous buy signals, only two false signals were given, they were given in October, 1938 and in January, 1948... this is a 90.9% accuracy rate since 1914... realize, this is a monthly indicator and these markets can move widely in both directions during mid month...

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 when the opportunity presents itself... also, look at the 1/3 Rule for easy position entry with much less risk...

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... I prefer to combine the Hoban Rule with the 1/3 Rule for more active market participation...

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 38 trades for a net gain of 259.80 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 VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange, and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

The NT (Near Term) indicator
A modest down tick today, nothing meaningful yet...

image

IF YOU PREFER A LONGER TERM TRADING STRATEGY WITHOUT THE FREQUENT VP INS AND OUTS AND ALL THAT MID DAY MARKET NOISE, THEN YOU MAY WELL CONSIDER THE BTIT INDICATOR OR THE LT INDICATOR TRADING METHOD FOR LONGER TERM POSITION TRADING... CHECK THE TUTORIAL BELOW TO LEARN HOW TO USE THESE METHODS EFFECTIVELY...

THE FLAT LINE INDICATOR

All key lines are now moving higher, the flat line is well above the zero line and the market price is well above the anti price, all systems looking promising for a continued rally from here with some scattered pull backs along the way...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line is moving higher now for two consecutive days, good news... it's only reasonable to expect to see this rally continue for a while...

image-3

The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 6/13/16

A close below 1312.51 would turn the BTIT from up to neutral...

A close below 1305.51 would turn the BTIT from neutral to down...

The main model is now long the December gold from 1332.50 as of Wednesday, September 21st...

The last trade as of this writing is at 1341.20 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Friday, a close below 1335.20 in the December Gold contract would confirm a new main model sell signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule was expressly designed for the SP market and no other market at this time)

Rationale: A VP at 1335.11...

THE VP PRICE MAP FOR TOMORROW

MAJOR - - 1381.72 and must close below that price on Monday, October 17th to confirm a new main model sell signal...

minor - - 1361.54

TODAY'S CLOSING PRICE - - 1341.20

minor - - 1335.11

SVP - - none

minor - - 1302.85

MAJOR - - 1279.59 and must close above that price on Thursday, October 13th to confirm a new main model buy signal...

The above is a price map in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...

All key lines are moving higher, this includes the momentum line... so far, so good... the market price is above the anti price, this is encouraging...

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image-5

THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

This market bounced right at the support line and the momentum line is moving higher for two consecutive days, this is encouraging...

image-6

The Main Model Formula

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.

USE ONLY THE LARGE SP FUTURES CONTRACT FOR ALL SIGNALS, THE MINI CONTRACT WILL GIVE YOU FALSE SIGNALS... AND THEN, ONCE A SIGNAL IS TRIGGERED (AND CONFIRMED), THEN YOU CAN TRADE ANY OTHER MARKET FROM THAT SIGNAL...

Light Positions:

It's always wise to hold only a light position in order to tolerate the wild price action of this market... also, if you're not nimble with these markets, then you may want to wait until the market closes for the day to be sure that any new signal is confirmed, this will eliminate all possible mid day whips... to be safer overnight, consider using an exit stop for capital preservation...

Trailing Stops:

Also, trailing stops are completely individual, it is presume that subscribers would have their own personal strategy on how and when to enter and exit the trade, these market can often be vicious... the VP points tell you where and if the market is about to move in one or another direction... for myself, I like to take profits at any time I get the sense I'm satisfied, I don't need to ride out every signal all the way to the last stop, it's really not necessary...

Trading Strategy:

Also, if you're having difficulty with these markets, I strongly urge that you consider a combination of the Hoban Rule and the 1/3 Rule to enter the trade positions, or just wait until the next morning to find a comfortable place to enter the trade, there's never a hurry... this will eliminate all whips...

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...

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 FLAT LINE INDICATOR

The FLI is a handy and easy to read two graph tool to see market tops and bottoms as they occur, the nimble trader could use this FLI each day to enter a trade position based only on the precision data on this graph, this graph includes 2 1/2 years of daily price data...

The FLI will give you more confidence when taking the VP signals...

The FLI lines are color coded for easy reference, there are only three lines to follow...

The color coded lines are:

Price Line - this is the actual daily closing price for the SP front month futures contract, this price is read on the left side of the graph...

Anti Price Line - this is the "shadow" price, this is the price required for the market to close that day for a change in direction to occur, this price is also read on the left side of the graph...

SP Flat Line - this line shows the difference in SP points between the Price Line and the Anti Price Line (PL minus APL), this line is read on the right side of the graph...

Broader Trend Line - this line tells you the broader direction of the market...

When reading this graph you will notice:

1. The flat line tops and bottoms occur right at the actual market price tops and bottoms...

2. when the price line crosses through the anti price line, then the flat line crosses through the zero value turning the flat line to neutral, and therefore the name flat line...

3. The flat line in the second graph crosses above and below the momentum line as a leading indicator ahead of the actual change in market direction...

4. The momentum line in the second graph tells you the market's strength of speed and you will notice how the flat line in that graph turns and crosses through the momentum line ahead of the market itself...

5. The optimal time to take a flat line trade position is when the flat line spike occurs simultaneously with a confirmed VP signal although this tool provides numerous other trade opportunities beyond the VP signals for the more aggressive trader...

Study the relation ships between the three lines at your leisure and you will make these and additional observations which can be useful trading tools...

THE LT PRICE AND MOMENTUM GRAPH

The momentum line very closely correlates with the market price...

THE VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange, and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

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, September 22nd

Give a man a fish and he'll eat for a day, teach a man to fish and he'll sit in the boat all day drinking beer.

* * * Benjamin Franklin

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...

TOMORROW'S SP TRADE STRATEGY:
For Thursday, a close below 2146.60 in the DECEMBER contract would confirm a new main model sell signal... be sure to review the VP price map directly below for additional VP points that may trigger a buy/sell signal...

For Hoban Rule traders, you are currently flat this market... take a short position with a close between 2141.60 and 2140.60 only... if filled, place an exit stop to go flat at 2148.60... also, please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A VP at 2146.56...

The last trade at this writing is at 2156.50 in the December...

The main model is now long the December SP from 2134.50 as of Wednesday, September 21st...

The FED made its announcement and the market responded...

THE VP PRICE MAP FOR TOMORROW

The VP map tells you everything you need to know, consult the map daily... knowing the map and the two key trading rules will make you a much more savvy trader, so it is extremely important to be familiar with the VP map...

Secondary Vertical Prices (SVP) are for the aggressive trader who is looking for an additional edge on additional exhaustion points... you will notice that the market responds as well to the SVP as to the standard VP points and are traded the same, but for now the main model will use only the standard VP points for official main model signals...

DECEMBER VP PRICES

MAJOR - - 2218.73 and must close below that price on Wednesday, November 9th to confirm a new main model sell signal...

minor - - 2185.43

MAJOR - - 2161.36 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2156.50

minor - - 2146.56

MAJOR - - 2134.53 and must close above that price on Monday, September 26th to confirm a new main model buy signal...

minor - - 2105.51

SVP - - 2062.39

The above price map is listed in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

PLEASE NOTE: It is vitally important to know where the market is on this map at all times, the main model buy and sell signals are generated only from this VP map... the trade rules, which you probably already know by now, are very simple and are explained below...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL as of 9/9/16

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... when in NEUTRAL, the BTIT would again reinstate the most recent UP or DOWN trend bias upon the penetration and close of the nearest recent ceiling/floor...

A close above 2154.37 would turn the BTIT to up...

A close below 2073.62 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

A long position will be taken when the BTIT turns up and a short position when the BTIT turns down... when the BTIT turns neutral, the position is then closed and will remain flat...

The BTIT is primarily a direction indicator and not a signal indicator, although this format can easily be used as a trading strategy designed for those who prefer a broader longer term trade position without close monitoring... be advised, the price swings are also significantly wider so caution is always highly advised and only a modest position should be taken for this strategy...

The BTIT current trade position: Flat from 2159.50 as of 9/9/16 - - there are 13 completed trades for a total gain of 265.00 SP points...

For the BTIT strategy, attention to the market action is still required, treating the signal price the same as a VP signal price... attempting this strategy on a close only basis has not proven successful...

THE MEGA TREND INDICATOR (MTI) - - UP as of 7/29/16

This is a front loaded comparative month by month trading range and weighted average rate of change of the most recent 11 and 14 months and is calculated on the last market day of each month...

A monthly close for September below 2066.601 would turn the MTI to neutral...

A monthly close for September below 1926.10 would turn the MTI to down...

The MTI current trade position: Long from 2168.20, the closing price on 7/29/16...

This model's buy signal is based on the Coppock Curve and has been back tested to 1914 with the DJIA... there have been a total of 22 previous buy signals over the past 102 years since 1914... of the 22 previous buy signals, only two false signals were given, they were given in October, 1938 and in January, 1948... this is a 90.9% accuracy rate since 1914... realize, this is a monthly indicator and these markets can move widely in both directions during mid month...

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 when the opportunity presents itself... also, look at the 1/3 Rule for easy position entry with much less risk...

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... I prefer to combine the Hoban Rule with the 1/3 Rule for more active market participation...

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 38 trades for a net gain of 259.80 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 VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange, and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

The NT (Near Term) indicator
The NT indicator continues higher... it has been moving higher all week...

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IF YOU PREFER A LONGER TERM TRADING STRATEGY WITHOUT THE FREQUENT VP INS AND OUTS AND ALL THAT MID DAY MARKET NOISE, THEN YOU MAY WELL CONSIDER THE BTIT INDICATOR OR THE LT INDICATOR TRADING METHOD FOR LONGER TERM POSITION TRADING... CHECK THE TUTORIAL BELOW TO LEARN HOW TO USE THESE METHODS EFFECTIVELY...

THE FLAT LINE INDICATOR

The flat line jiggle pattern has again done its magic and signaled a market rally... the market is now clearly above the anti price... AND the momentum line has turn upward today... this looks like the possible beginning of a new bull leg higher... so, now we hold our long positions and see...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

Look at the momentum line, moving higher as of today... this is encouraging for the new long position...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 6/13/16

A close below 1312.51 would turn the BTIT from up to neutral...

A close below 1305.51 would turn the BTIT from neutral to down...

The main model is now long the December gold from 1332.50 as of Wednesday, September 21st...

The last trade as of this writing is at 1336.80 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Thursday, a close below 1302.90 in the December Gold contract would confirm a new main model sell signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule was expressly designed for the SP market and no other market at this time)

Rationale: A VP at 1302.85...

THE VP PRICE MAP FOR TOMORROW

MAJOR - - 1381.72 and must close below that price on Monday, October 17th to confirm a new main model sell signal...

minor - - 1361.54

TODAY'S CLOSING PRICE - - 1337.20

SVP - - none

minor - - 1302.85

MAJOR - - 1279.59 and must close above that price on Thursday, October 13th to confirm a new main model buy signal...

The above is a price map in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...

The market is now above the anti price and the momentum line is also moving upward... overnight in the Intensive Care Unit was apparently enough to turn this market around...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

As of today, the LT momentum line is again moving higher... it looks like a possible new bull rally is beginning in this market, also...

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The Main Model Formula

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.

USE ONLY THE LARGE SP FUTURES CONTRACT FOR ALL SIGNALS, THE MINI CONTRACT WILL GIVE YOU FALSE SIGNALS... AND THEN, ONCE A SIGNAL IS TRIGGERED (AND CONFIRMED), THEN YOU CAN TRADE ANY OTHER MARKET FROM THAT SIGNAL...

Light Positions:

It's always wise to hold only a light position in order to tolerate the wild price action of this market... also, if you're not nimble with these markets, then you may want to wait until the market closes for the day to be sure that any new signal is confirmed, this will eliminate all possible mid day whips... to be safer overnight, consider using an exit stop for capital preservation...

Trailing Stops:

Also, trailing stops are completely individual, it is presume that subscribers would have their own personal strategy on how and when to enter and exit the trade, these market can often be vicious... the VP points tell you where and if the market is about to move in one or another direction... for myself, I like to take profits at any time I get the sense I'm satisfied, I don't need to ride out every signal all the way to the last stop, it's really not necessary...

Trading Strategy:

Also, if you're having difficulty with these markets, I strongly urge that you consider a combination of the Hoban Rule and the 1/3 Rule to enter the trade positions, or just wait until the next morning to find a comfortable place to enter the trade, there's never a hurry... this will eliminate all whips...

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...

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 FLAT LINE INDICATOR

The FLI is a handy and easy to read two graph tool to see market tops and bottoms as they occur, the nimble trader could use this FLI each day to enter a trade position based only on the precision data on this graph, this graph includes 2 1/2 years of daily price data...

The FLI will give you more confidence when taking the VP signals...

The FLI lines are color coded for easy reference, there are only three lines to follow...

The color coded lines are:

Price Line - this is the actual daily closing price for the SP front month futures contract, this price is read on the left side of the graph...

Anti Price Line - this is the "shadow" price, this is the price required for the market to close that day for a change in direction to occur, this price is also read on the left side of the graph...

SP Flat Line - this line shows the difference in SP points between the Price Line and the Anti Price Line (PL minus APL), this line is read on the right side of the graph...

Broader Trend Line - this line tells you the broader direction of the market...

When reading this graph you will notice:

1. The flat line tops and bottoms occur right at the actual market price tops and bottoms...

2. when the price line crosses through the anti price line, then the flat line crosses through the zero value turning the flat line to neutral, and therefore the name flat line...

3. The flat line in the second graph crosses above and below the momentum line as a leading indicator ahead of the actual change in market direction...

4. The momentum line in the second graph tells you the market's strength of speed and you will notice how the flat line in that graph turns and crosses through the momentum line ahead of the market itself...

5. The optimal time to take a flat line trade position is when the flat line spike occurs simultaneously with a confirmed VP signal although this tool provides numerous other trade opportunities beyond the VP signals for the more aggressive trader...

Study the relation ships between the three lines at your leisure and you will make these and additional observations which can be useful trading tools...

THE LT PRICE AND MOMENTUM GRAPH

The momentum line very closely correlates with the market price...

THE VERTICAL FUND: The Vertical Fund is now live and ongoing... this fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange, and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

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, September 21st

Give a man a fish and he'll eat for a day, teach a man to fish and he'll sit in the boat all day drinking beer.

* * * Benjamin Franklin

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...

TOMORROW'S SP TRADE STRATEGY:
For Wednesday, a close above 2134.50 in the DECEMBER contract would confirm a new main model buy signal... be sure to review the VP price map directly below for additional VP points that may trigger a buy/sell signal...

For Hoban Rule traders, you are currently flat this market... take a long position with a close between 2139.50 and 2140.50 only... if filled, place an exit stop to go flat at 2132.50... also, please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A major VP at 2134.53...

The last trade at this writing is at 2132.50 in the December...

The main model is now short the December SP from 2134.50 as of Friday, September 16th...

Another sleepy day with the market holding a buy signal until the close and then falling below the VP for yet another non confirmation...

THE VP PRICE MAP FOR TOMORROW

The VP map tells you everything you need to know, consult the map daily... knowing the map and the two key trading rules will make you a much more savvy trader, so it is extremely important to be familiar with the VP map...

Secondary Vertical Prices (SVP) are for the aggressive trader who is looking for an additional edge on additional exhaustion points... you will notice that the market responds as well to the SVP as to the standard VP points and are traded the same, but for now the main model will use only the standard VP points for official main model signals...

DECEMBER VP PRICES

MAJOR - - 2218.73 and must close below that price on Wednesday, November 9th to confirm a new main model sell signal...

minor - - 2185.43

MAJOR - - 2161.36 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

minor - - 2146.56

MAJOR - - 2134.53 and must close above that price on Monday, September 26th to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 2132.50

minor - - 2105.51

SVP - - 2062.39

The above price map is listed in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

PLEASE NOTE: It is vitally important to know where the market is on this map at all times, the main model buy and sell signals are generated only from this VP map... the trade rules, which you probably already know by now, are very simple and are explained below...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL as of 9/9/16

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... when in NEUTRAL, the BTIT would again reinstate the most recent UP or DOWN trend bias upon the penetration and close of the nearest recent ceiling/floor...

A close above 2165.04 would turn the BTIT to up...

A close below 2073.62 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

A long position will be taken when the BTIT turns up and a short position when the BTIT turns down... when the BTIT turns neutral, the position is then closed and will remain flat...

The BTIT is primarily a direction indicator and not a signal indicator, although this format can easily be used as a trading strategy designed for those who prefer a broader longer term trade position without close monitoring... be advised, the price swings are also significantly wider so caution is always highly advised and only a modest position should be taken for this strategy...

The BTIT current trade position: Flat from 2159.50 as of 9/9/16 - - there are 13 completed trades for a total gain of 265.00 SP points...

For the BTIT strategy, attention to the market action is still required, treating the signal price the same as a VP signal price... attempting this strategy on a close only basis has not proven successful...

THE MEGA TREND INDICATOR (MTI) - - UP as of 7/29/16

This is a front loaded comparative month by month trading range and weighted average rate of change of the most recent 11 and 14 months and is calculated on the last market day of each month...

A monthly close for September below 2066.601 would turn the MTI to neutral...

A monthly close for September below 1926.10 would turn the MTI to down...

The MTI current trade position: Long from 2168.20, the closing price on 7/29/16...

This model's buy signal is based on the Coppock Curve and has been back tested to 1914 with the DJIA... there have been a total of 22 previous buy signals over the past 102 years since 1914... of the 22 previous buy signals, only two false signals were given, they were given in October, 1938 and in January, 1948... this is a 90.9% accuracy rate since 1914... realize, this is a monthly indicator and these markets can move widely in both directions during mid month...

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 when the opportunity presents itself... also, look at the 1/3 Rule for easy position entry with much less risk...

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... I prefer to combine the Hoban Rule with the 1/3 Rule for more active market participation...

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 38 trades for a net gain of 259.80 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 VERTICAL FUND: The Vertical Fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange, and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

The NT (Near Term) indicator
The NT continues higher despite the market weakness...

image

IF YOU PREFER A LONGER TERM TRADING STRATEGY WITHOUT THE FREQUENT VP INS AND OUTS AND ALL THAT MID DAY MARKET NOISE, THEN YOU MAY WELL CONSIDER THE BTIT INDICATOR OR THE LT INDICATOR TRADING METHOD FOR LONGER TERM POSITION TRADING... CHECK THE TUTORIAL BELOW TO LEARN HOW TO USE THESE METHODS EFFECTIVELY...

THE FLAT LINE INDICATOR

All key lines continue lower... notice the anti price is actually rising today... this now raises the bar for the market to perform...

image-1

image-2

THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The momentum index also continues downward today...

image-3

The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 6/13/16

A close below 1315.201 would turn the BTIT from up to neutral...

A close below 1305.51 would turn the BTIT from neutral to down...

The main model is now short the December gold from 1325.40 as of Tuesday, September 13th...

The last trade as of this writing is at 1317.70 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Wednesday, a close above 1332.50 in the December Gold contract would confirm a new main model buy signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule was expressly designed for the SP market and no other market at this time)

Rationale: A VP at 1368.61...

THE VP PRICE MAP FOR TOMORROW

MAJOR - - 1395.03 and must close below that price on Thursday, September 29th to confirm a new main model sell signal...

MAJOR - - 1394.42 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

minor - - 1371.44

minor - - 1368.61

TODAY'S CLOSING PRICE - - 1318.00

SVP - - none

minor - - 1302.85

MAJOR - - 1279.59 and must close above that price on Thursday, October 13th to confirm a new main model buy signal...

The above is a price map in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...

Today, the market closed below the anti price and the momentum line has now turned downward...

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image-5

THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

Okay, this market is ready to be admitted into the Intensive Care unit for more observation, all key lines are moving lower... if this market doesn't turn higher by tomorrow, the BTIT Index will turn from up to neutral...

image-6

The Main Model Formula

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.

USE ONLY THE LARGE SP FUTURES CONTRACT FOR ALL SIGNALS, THE MINI CONTRACT WILL GIVE YOU FALSE SIGNALS... AND THEN, ONCE A SIGNAL IS TRIGGERED (AND CONFIRMED), THEN YOU CAN TRADE ANY OTHER MARKET FROM THAT SIGNAL...

Light Positions:

It's always wise to hold only a light position in order to tolerate the wild price action of this market... also, if you're not nimble with these markets, then you may want to wait until the market closes for the day to be sure that any new signal is confirmed, this will eliminate all possible mid day whips... to be safer overnight, consider using an exit stop for capital preservation...

Trailing Stops:

Also, trailing stops are completely individual, it is presume that subscribers would have their own personal strategy on how and when to enter and exit the trade, these market can often be vicious... the VP points tell you where and if the market is about to move in one or another direction... for myself, I like to take profits at any time I get the sense I'm satisfied, I don't need to ride out every signal all the way to the last stop, it's really not necessary...

Trading Strategy:

Also, if you're having difficulty with these markets, I strongly urge that you consider a combination of the Hoban Rule and the 1/3 Rule to enter the trade positions, or just wait until the next morning to find a comfortable place to enter the trade, there's never a hurry... this will eliminate all whips...

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...

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 FLAT LINE INDICATOR

The FLI is a handy and easy to read two graph tool to see market tops and bottoms as they occur, the nimble trader could use this FLI each day to enter a trade position based only on the precision data on this graph, this graph includes 2 1/2 years of daily price data...

The FLI will give you more confidence when taking the VP signals...

The FLI lines are color coded for easy reference, there are only three lines to follow...

The color coded lines are:

Price Line - this is the actual daily closing price for the SP front month futures contract, this price is read on the left side of the graph...

Anti Price Line - this is the "shadow" price, this is the price required for the market to close that day for a change in direction to occur, this price is also read on the left side of the graph...

SP Flat Line - this line shows the difference in SP points between the Price Line and the Anti Price Line (PL minus APL), this line is read on the right side of the graph...

Broader Trend Line - this line tells you the broader direction of the market...

When reading this graph you will notice:

1. The flat line tops and bottoms occur right at the actual market price tops and bottoms...

2. when the price line crosses through the anti price line, then the flat line crosses through the zero value turning the flat line to neutral, and therefore the name flat line...

3. The flat line in the second graph crosses above and below the momentum line as a leading indicator ahead of the actual change in market direction...

4. The momentum line in the second graph tells you the market's strength of speed and you will notice how the flat line in that graph turns and crosses through the momentum line ahead of the market itself...

5. The optimal time to take a flat line trade position is when the flat line spike occurs simultaneously with a confirmed VP signal although this tool provides numerous other trade opportunities beyond the VP signals for the more aggressive trader...

Study the relation ships between the three lines at your leisure and you will make these and additional observations which can be useful trading tools...

THE LT PRICE AND MOMENTUM GRAPH

The momentum line very closely correlates with the market price...

THE VERTICAL FUND: The Vertical Fund trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange, and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

THE VERTICAL FUND real time performance will be posted here now that the fund has gone live effective September 20th, 2016.

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, September 20th

There is only one quality worse than hardness of heart and that is softness of head.

* * * Abraham Lincoln

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...

TOMORROW'S SP TRADE STRATEGY:

For Tuesday, a close above 2134.50 in the DECEMBER contract would confirm a new main model buy signal... be sure to review the VP price map directly below for additional VP points that may trigger a buy/sell signal...

For Hoban Rule traders, you are currently flat this market... take a long position with a close between 2139.50 and 2140.50 only... if filled, place an exit stop to go flat at 2132.50... also, please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A major VP at 2134.53...

The last trade at this writing is at 2132.20 in the December...

The main model is now short the December SP from 2134.50 as of Friday, September 16th...

An incredibly choppy market which flirted with a buy signal most of the day, but it failed and didn't confirm...

THE VP PRICE MAP FOR TOMORROW

The VP map tells you everything you need to know, consult the map daily... knowing the map and the two key trading rules will make you a much more savvy trader, so it is extremely important to be familiar with the VP map...

Secondary Vertical Prices (SVP) are for the aggressive trader who is looking for an additional edge on additional exhaustion points... you will notice that the market responds as well to the SVP as to the standard VP points and are traded the same, but for now the main model will use only the standard VP points for official main model signals...

DECEMBER VP PRICES

MAJOR - - 2218.73 and must close below that price on Wednesday, November 9th to confirm a new main model sell signal...

minor - - 2185.43

MAJOR - - 2161.36 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

minor - - 2146.56

MAJOR - - 2134.53 and must close above that price on Monday, September 26th to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 2132.20

minor - - 2105.51

SVP - - 2062.39

The above price map is listed in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

PLEASE NOTE: It is vitally important to know where the market is on this map at all times, the main model buy and sell signals are generated only from this VP map... the trade rules, which you probably already know by now, are very simple and are explained below...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL as of 9/9/16

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... when in NEUTRAL, the BTIT would again reinstate the most recent UP or DOWN trend bias upon the penetration and close of the nearest recent ceiling/floor...

A close above 2165.04 would turn the BTIT to up...

A close below 2057.07 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

A long position will be taken when the BTIT turns up and a short position when the BTIT turns down... when the BTIT turns neutral, the position is then closed and will remain flat...

The BTIT is primarily a direction indicator and not a signal indicator, although this format can easily be used as a trading strategy designed for those who prefer a broader longer term trade position without close monitoring... be advised, the price swings are also significantly wider so caution is always highly advised and only a modest position should be taken for this strategy...

The BTIT current trade position: Flat from 2159.50 as of 9/9/16 - - there are 13 completed trades for a total gain of 265.00 SP points...

For the BTIT strategy, attention to the market action is still required, treating the signal price the same as a VP signal price... attempting this strategy on a close only basis has not proven successful...

THE MEGA TREND INDICATOR (MTI) - - UP as of 7/29/16

This is a front loaded comparative month by month trading range and weighted average rate of change of the most recent 11 and 14 months and is calculated on the last market day of each month...

A monthly close for September below 2066.601 would turn the MTI to neutral...

A monthly close for September below 1926.10 would turn the MTI to down...

The MTI current trade position: Long from 2168.20, the closing price on 7/29/16...

This model's buy signal is based on the Coppock Curve and has been back tested to 1914 with the DJIA... there have been a total of 22 previous buy signals over the past 102 years since 1914... of the 22 previous buy signals, only two false signals were given, they were given in October, 1938 and in January, 1948... this is a 90.9% accuracy rate since 1914... realize, this is a monthly indicator and these markets can move widely in both directions during mid month...

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 when the opportunity presents itself... also, look at the 1/3 Rule for easy position entry with much less risk...

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... I prefer to combine the Hoban Rule with the 1/3 Rule for more active market participation...

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 38 trades for a net gain of 259.80 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...

PROFESSIONAL ACCOUNT MANAGEMENT IS AVAILABLE: After all is said and done, and if you still find it a struggle to enter the trade positions properly even when you know the market is likely to change directions at the Vertical Prices, then ask about our professionally managed fund, The Vertical Fund, which trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange, and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

The NT (Near Term) indicator
A solid up spike today in the NT indicator... keep an eye on the market action at the nearby VP price... meanwhile, the main model remains short this market...

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IF YOU PREFER A LONGER TERM TRADING STRATEGY WITHOUT THE FREQUENT VP INS AND OUTS AND ALL THAT MID DAY MARKET NOISE, THEN YOU MAY WELL CONSIDER THE BTIT INDICATOR OR THE LT INDICATOR TRADING METHOD FOR LONGER TERM POSITION TRADING... CHECK THE TUTORIAL BELOW TO LEARN HOW TO USE THESE METHODS EFFECTIVELY...

THE FLAT LINE INDICATOR

The anti price remains above the market and the momentum still continues lower...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

We can see that the LT momentum indicator can turn upward at this level, but it hasn't yet...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: UP since 6/13/16

A close below 1308.201 would turn the BTIT from up to neutral...

A close below 1208.21 would turn the BTIT from neutral to down...

The main model is now short the December gold from 1325.40 as of Tuesday, September 13th...

The last trade as of this writing is at 1316.40 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Tuesday, a close above 1332.50 in the December Gold contract would confirm a new main model buy signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule was expressly designed for the SP market and no other market at this time)

Rationale: A VP at 1368.61...

THE VP PRICE MAP FOR TOMORROW

MAJOR - - 1395.03 and must close below that price on Thursday, September 29th to confirm a new main model sell signal...

MAJOR - - 1394.42 and must close below that price on Monday, October 3rd to confirm a new main model sell signal...

minor - - 1371.44

minor - - 1368.61

TODAY'S CLOSING PRICE - - 1316.40

SVP - - none

minor - - 1302.85

MAJOR - - 1279.59 and must close above that price on Thursday, October 13th to confirm a new main model buy signal...

The above is a price map in descending order of all currently active vertical prices above and below the market... those in red were generated on previously confirmed buy signals, those in green were generated on previously confirmed sell signals... today's closing price is also included to provide you with a GPS type reading of where the market currently is in relation to all VP points on both sides of the market...

The Two Main Model Trade Rules:

1) Any time the market trades above any overhead VP price and then closes below it, this would confirm a new main model sell signal...
2) Any time the market trades below any lower VP price and then closes above it, this would confirm a new main model buy signal...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...

Still looking rather toppy, and the momentum line which had been moving higher has turned sideways as of today... the main model remains short this market...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line has been moving lower for some time and has not looked back once...

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The Main Model Formula

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.

USE ONLY THE LARGE SP FUTURES CONTRACT FOR ALL SIGNALS, THE MINI CONTRACT WILL GIVE YOU FALSE SIGNALS... AND THEN, ONCE A SIGNAL IS TRIGGERED (AND CONFIRMED), THEN YOU CAN TRADE ANY OTHER MARKET FROM THAT SIGNAL...

Light Positions:

It's always wise to hold only a light position in order to tolerate the wild price action of this market... also, if you're not nimble with these markets, then you may want to wait until the market closes for the day to be sure that any new signal is confirmed, this will eliminate all possible mid day whips... to be safer overnight, consider using an exit stop for capital preservation...

Trailing Stops:

Also, trailing stops are completely individual, it is presume that subscribers would have their own personal strategy on how and when to enter and exit the trade, these market can often be vicious... the VP points tell you where and if the market is about to move in one or another direction... for myself, I like to take profits at any time I get the sense I'm satisfied, I don't need to ride out every signal all the way to the last stop, it's really not necessary...

Trading Strategy:

Also, if you're having difficulty with these markets, I strongly urge that you consider a combination of the Hoban Rule and the 1/3 Rule to enter the trade positions, or just wait until the next morning to find a comfortable place to enter the trade, there's never a hurry... this will eliminate all whips...

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...

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 FLAT LINE INDICATOR

The FLI is a handy and easy to read two graph tool to see market tops and bottoms as they occur, the nimble trader could use this FLI each day to enter a trade position based only on the precision data on this graph, this graph includes 2 1/2 years of daily price data...

The FLI will give you more confidence when taking the VP signals...

The FLI lines are color coded for easy reference, there are only three lines to follow...

The color coded lines are:

Price Line - this is the actual daily closing price for the SP front month futures contract, this price is read on the left side of the graph...

Anti Price Line - this is the "shadow" price, this is the price required for the market to close that day for a change in direction to occur, this price is also read on the left side of the graph...

SP Flat Line - this line shows the difference in SP points between the Price Line and the Anti Price Line (PL minus APL), this line is read on the right side of the graph...

Broader Trend Line - this line tells you the broader direction of the market...

When reading this graph you will notice:

1. The flat line tops and bottoms occur right at the actual market price tops and bottoms...

2. when the price line crosses through the anti price line, then the flat line crosses through the zero value turning the flat line to neutral, and therefore the name flat line...

3. The flat line in the second graph crosses above and below the momentum line as a leading indicator ahead of the actual change in market direction...

4. The momentum line in the second graph tells you the market's strength of speed and you will notice how the flat line in that graph turns and crosses through the momentum line ahead of the market itself...

5. The optimal time to take a flat line trade position is when the flat line spike occurs simultaneously with a confirmed VP signal although this tool provides numerous other trade opportunities beyond the VP signals for the more aggressive trader...

Study the relation ships between the three lines at your leisure and you will make these and additional observations which can be useful trading tools...

THE LT PRICE AND MOMENTUM GRAPH

The momentum line very closely correlates with the market price...

PROFESSIONAL ACCOUNT MANAGEMENT IS AVAILABLE: After all is said and done, and if you still find it a struggle to enter the trade positions properly even when you know the market is likely to change directions at the Vertical Prices, then ask about our professionally managed fund, The Vertical Fund, which trades the same main model VP signals presented in each evening briefing... the difference is that The Vertical Fund is professionally managed by our own professional expert Trading Team, members with a Seat on the Chicago Mercantile Exchange, and with more than 30 years experience located right on the floor of the Chicago Mercantile Exchange... since its inception on July, 2015 the fund's real time simulator performance shows a net gain of 62.05%...

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...