For Thursday, December 1st

"Man is the only creature that refuses to be what he is."

* * * Albert Camus

IMPORTANT REMINDER:

DON'T IGNORE THE BTIT INDICATOR!!!

IF YOU'RE HAVING DIFFICULTY WITH THE NEAR TERM VP SIGNALS, THEN TAKE A MORE SERIOUS LOOK AT THE BTIT INDICATOR INCLUDED AND UPDATED IN EACH AND EVERY EVENING BRIEFING, IT HAS AN IMPRESSIVE PERFORMANCE RECORD FOR LONGER TERM POSITIONS AND YOU DO NOT NEED TO WATCH THE MARKET SO CLOSELY... I USE IT MYSELF, IT'S A VERY USER FRIENDLY SIGNAL...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

THE VERTICAL FUND real time performance since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

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 above 2209.30 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 after being stopped out... enter a new long position with a close between 2214.30 and 2215.30... if filled, then place an exit stop to go flat at 2207.30... 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 2209.37...

The last trade at this writing is at 2198.80 in the December...

The main model is now short the December SP from 2209.40 as of Monday, November 28th...

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 - - 2247.64 and must close below that price on Friday, January 20th to confirm a new main model sell signal...

MAJOR - - 2218.71 and must close below that price on Thursday, December 8th to confirm a new main model sell signal...

minor - - 2212.61

MAJOR - - 2209.37 and must close below that price on Friday, January 27th to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2198.80

MAJOR - - 2196.46 and must close below that price on Tuesday, December 6th to confirm a new main model sell signal...

minor - - 2185.19

minor - - 2182.93

minor - - 2160.809

SVP - - none

minor - - none

MAJOR - - (none) and must close above that price on (none) to confirm a new main model buy signal...

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 11/8/16

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 2198.60 would turn the BTIT to neutral...

A close below 2029.408 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 2131.90 as of 11/8/16 - - there are 15 completed trades for a total gain of 288.00 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 December below 2001.76 would turn the MTI to neutral...

A monthly close for December 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 since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

The NT (Near Term) indicator
No movement here at all today...
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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 lines are moving lower, the momentum line is now clearly headed down... the main model remains short for now...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line still continues higher... let's see how long that lasts if this market keeps going down from here... remember, the LT momentum line is a slower line, but it's also extremely accurate calling significant tops and bottoms... so, if this is going to be a more meaningful top, then we'll need to see this momentum line turn downward...

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The FEBRUARY Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 11/23/16

A close above 1338.31 would turn the BTIT to up...

A close above 1265.11 would turn the BTIT to neutral...

The main model is now short the December gold from 1209.70 as of Wednesday, November 23rd...

TOMORROW'S GOLD TRADE STRATEGY:

For Thursday, a close above 1194.90 in the February 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 major VP at 1194.94...

GOLD FEBRUARY VP PRICES

MAJOR - - 1248.99 and must close below that price on Monday, January 2nd to confirm a new main model sell signal...

minor - - 1227.24

SVP - - none

minor - - 1212.27

MAJOR - - 1202.43 and must close above that price on Thursday, December 1st to confirm a new main model buy signal...

minor - - 1202.76

MAJOR - - 1194.94 and must close above that price on Monday, December 5th to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1174.70

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...

GLD closed today right at 111.75 and the anti price for today is also exactly 111.75... so, this market is right now exactly flat... tomorrow's anti price is 111.13, so this market could still move lower tomorrow and have the market close again above the anti price... this market is very iffy, especially that it's not turning higher while so extremely oversold... just take a look at the momentum line...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

No help here... the LT momentum line moves lower relentlessly...

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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 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, November 30th

"Follow your heart but take your brains with you."

* * * Alfred Adler

IMPORTANT REMINDER:

DON'T IGNORE THE BTIT INDICATOR!!!

IF YOU'RE HAVING DIFFICULTY WITH THE NEAR TERM VP SIGNALS, THEN TAKE A MORE SERIOUS LOOK AT THE BTIT INDICATOR INCLUDED AND UPDATED IN EACH AND EVERY EVENING BRIEFING, IT HAS AN IMPRESSIVE PERFORMANCE RECORD FOR LONGER TERM POSITIONS AND YOU DO NOT NEED TO WATCH THE MARKET SO CLOSELY... I USE IT MYSELF, IT'S A VERY USER FRIENDLY SIGNAL...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

THE VERTICAL FUND real time performance since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

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 2209.30 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 after being stopped out... enter a new long position with a close between 2214.30 and 2215.30... if filled, then place an exit stop to go flat at 2207.30... 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 2209.37...

The last trade at this writing is at 2203.30 in the December...

The main model is now short the December SP from 2209.40 as of Monday, November 28th...

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 - - 2247.64 and must close below that price on Friday, January 20th to confirm a new main model sell signal...

MAJOR - - 2209.37 and must close below that price on Friday, January 27th to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2203.30

MAJOR - - 2196.46 and must close below that price on Tuesday, December 6th to confirm a new main model sell signal...

minor - - 2185.19

minor - - 2182.93

minor - - 2160.809

SVP - - none

minor - - none

MAJOR - - (none) and must close above that price on (none) to confirm a new main model buy signal...

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 11/8/16

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 2161.19 would turn the BTIT to neutral...

A close below 2029.408 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 2131.90 as of 11/8/16 - - there are 15 completed trades for a total gain of 288.00 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 November below 2001.76 would turn the MTI to neutral...

A monthly close for November 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 since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

The NT (Near Term) indicator
A modest uptick today, going nowhere fast...
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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

Still looking toppy here, the momentum line continues lower...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line continues higher without any hesitation...

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The FEBRUARY Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 11/23/16

A close above 1338.31 would turn the BTIT to up...

A close above 1265.11 would turn the BTIT to neutral...

The main model is now short the December gold from 1209.70 as of Wednesday, November 23rd...

Last night's evening briefing was sent out when the last trade for the gold market was at 1192.80, BUT the market settled at 1190.80 which was NOT a buy signal confirmation... therefore, last night's buy confirmation is nullified... since you're also watching this market, you would have also seen the same thing due to a late settlement close... this does happen although thankfully not too often...

TOMORROW'S GOLD TRADE STRATEGY:

For Wednesday, a close above 1194.90 in the February 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 major VP at 1194.94...

GOLD FEBRUARY VP PRICES

MAJOR - - none and must close below that price on none to confirm a new main model sell signal...

minor - - none

SVP - - none

minor - - 1212.27

MAJOR - - 1202.43 and must close above that price on Thursday, December 1st to confirm a new main model buy signal...

minor - - 1202.76

MAJOR - - 1194.94 and must close above that price on Monday, December 5th to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1190.90

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 ABOVE the anti price and the momentum line is beginning to turn higher... no main model buy signal yet, but it looks like this market is giving it the ol' college try...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line still moves lower without any hesitation... but, it is now well into the oversold zone and we should see something happen...

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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 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, November 29th

"Follow your heart but take your brains with you."

* * * Alfred Adler

IMPORTANT REMINDER:

DON'T IGNORE THE BTIT INDICATOR!!!

IF YOU'RE HAVING DIFFICULTY WITH THE NEAR TERM VP SIGNALS, THEN TAKE A MORE SERIOUS LOOK AT THE BTIT INDICATOR INCLUDED AND UPDATED IN EACH AND EVERY EVENING BRIEFING, IT HAS AN IMPRESSIVE PERFORMANCE RECORD FOR LONGER TERM POSITIONS AND YOU DO NOT NEED TO WATCH THE MARKET SO CLOSELY... I USE IT MYSELF, IT'S A VERY USER FRIENDLY SIGNAL...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

THE VERTICAL FUND real time performance since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

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 2209.30 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 after being stopped out... enter a new long position with a close between 2214.30 and 2215.30... if filled, then place an exit stop to go flat at 2207.30... 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 2209.37...

The last trade at this writing is at 2200.00 in the December...

The main model is now short the December SP from 2209.40 as of Monday, November 28th...

This market had one heck of a rally until 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...

SP DECEMBER VP PRICES

MAJOR - - 2247.64 and must close below that price on Friday, January 20th to confirm a new main model sell signal...

MAJOR - - 2209.37 and must close below that price on Friday, January 27th to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2200.00

MAJOR - - 2196.46 and must close below that price on Tuesday, December 6th to confirm a new main model sell signal...

minor - - 2185.19

minor - - 2182.93

minor - - 2160.809

SVP - - none

minor - - none

MAJOR - - (none) and must close above that price on (none) to confirm a new main model buy signal...

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 11/8/16

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 2161.19 would turn the BTIT to neutral...

A close below 2029.408 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 2131.90 as of 11/8/16 - - there are 15 completed trades for a total gain of 288.00 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 November below 2001.76 would turn the MTI to neutral...

A monthly close for November 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 since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

The NT (Near Term) indicator
A down tick today in the NT indicator...
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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

BIG changes today in the flat line indicator... first, notice that the market closed BELOW the anti price... this is the first time since November 7th... also, the momentum line has now turned downward as of today while in overbought territory... so, this down turn could possibly continue for several weeks... as mentioned earlier, the flat line has been moving lower for the past week even though the market has been moving higher... that was a warning... the flat line is a leading indicator and should be closely monitored...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line has not yet turned downward, but you can see it has a bend in it... another day of selling and we could expect to see this line also turn south...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 11/23/16

A close above 1338.31 would turn the BTIT to up...

A close above 1265.11 would turn the BTIT to neutral...

The main model is now short the December gold from 1209.70 as of Wednesday, November 23st...

The last trade as of this writing is at 1192.80 for December...

TOMORROW'S GOLD TRADE STRATEGY:

TODAY'S GOLD TRADE STRATEGY:
 
For Tuesday, a close above 1194.90 in the February 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 major VP at 1194.94...  

GOLD DECEMBER VP PRICES

MAJOR - - 1399.64 and must close below that price on Wednesday, December 14th to confirm a new main model sell signal...

minor - - 1356.11

SVP - - none

minor - - 1258.89

MAJOR - - 1238.33 and must close above that price on Tuesday, December 6th to confirm a new main model buy signal...

minor - - 1209.67

MAJOR - - 1200.03 and must close above that price on Thursday, December 1st to confirm a new main model buy signal...

minor - - 1199.96

TODAY'S CLOSING PRICE - - 1190.80

MAJOR - - 1191.58 and must close above that price on Monday, December 5th 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 flat line has now turned sharply higher and the market closed just barely below the anti price... tomorrow's anti price is 112.35, so even if GLD closes a bit lower tomorrow, we'll see the flat line cross above the zero line and the momentum line would turn upward... look at how deeply oversold this market currently is according to the momentum line... even a bounce seems reasonable...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line is longer term, so it's a bit slower to turn, but it's clearly in the vicinity of the oversold zone and we could expect to see this line turn upward if we see another day higher for this market...

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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 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, November 28th

"Follow your heart but take your brains with you."

* * * Alfred Adler

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

THE VERTICAL FUND real time performance since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

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 below 2209.40 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 after being stopped out... enter a new short position with a close between 2204.40 and 2203.40... if filled, then place an exit stop to go flat at 2211.40... 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 2209.37...

The last trade at this writing is at 2211.00 in the December...

The main model is now long the December SP from 2182.90 as of Monday, November 21st...

This market finally broke away from that VP that had a grip on this market and the official Christmas rally may have already begun...

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 - - 2247.64 and must close below that price on Friday, January 20th to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2211.00

MAJOR - - 2209.37 and must close below that price on Friday, January 27th to confirm a new main model sell signal...

MAJOR - - 2196.46 and must close below that price on Tuesday, December 6th to confirm a new main model sell signal...

minor - - 2185.19

minor - - 2182.93

minor - - 2160.809

SVP - - none

minor - - none

MAJOR - - (none) and must close above that price on (none) to confirm a new main model buy signal...

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 11/8/16

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 2155.73 would turn the BTIT to neutral...

A close below 2029.408 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 2131.90 as of 11/8/16 - - there are 15 completed trades for a total gain of 288.00 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 November below 2001.76 would turn the MTI to neutral...

A monthly close for November 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 since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

The NT (Near Term) indicator
The NT indicator continues inching higher but is not at all 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

Notice how the flat line is still moving lower white the market itself is moving higher... this means that, although the trend is still upwards, the momentum is losing steam... notice the momentum line is now already approaching the overbought zone... but, no sell signal here...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line is not as overbought as the flat line momentum line... more upside to go seems very plausible...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 11/23/16

A close above 1338.31 would turn the BTIT to up...

A close above 1265.11 would turn the BTIT to neutral...

The main model is now short the December gold from 1209.70 as of Wednesday, November 23st...

This recent long position didn't last very long... it seems the gold market is in a perpetual bear market with an occasional bear bounce every once in a while...

The last trade as of this writing is at 1183.50 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Monday, a close above 1191.50 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 major VP at 1191.58...

GOLD DECEMBER VP PRICES

MAJOR - - 1399.64 and must close below that price on Wednesday, December 14th to confirm a new main model sell signal...

minor - - 1356.11

SVP - - none

minor - - 1258.89

MAJOR - - 1238.33 and must close above that price on Tuesday, December 6th to confirm a new main model buy signal...

minor - - 1209.67

MAJOR - - 1200.03 and must close above that price on Thursday, December 1st to confirm a new main model buy signal...

minor - - 1199.96

MAJOR - - 1191.58 and must close above that price on Monday, December 5th to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1183.50

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 most striking thing about this flat line indicator is how the market price fell so dramatically after breaking that "do or die" support level... also, notice how deeply oversold the momentum line is as of today... the last time this market was this oversold, the market fell yet another 30 bucks before finding any support... so, 1150 for gold seems doable here... let's just stay short per the main model and not get too cute trying to pick a bottom...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

This momentum line says it all... very oversold but no buy signal in sight...

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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 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, November 25th

"Follow your heart but take your brains with you."

* * * Alfred Adler

NOTICE:

ALL U.S. MARKETS WILL BE CLOSE ON THURSDAY TO OBSERVE THANKSGIVING DAY AND WILL RE-OPEN AGAIN ON FRIDAY, THE MARKET WILL THEN CLOSE ON FRIDAY AT 1:00 PM DAYLIGHT SAVINGS TIME... THE EVENING BRIEFING WILL NOT BE DELIVERED ON THURSDAY SINCE THE MARKETS ARE CLOSED BUT WILL AGAIN BE DELIVERED INTO YOUR EMAIL INBOX ON FRIDAY... HAVE A WONDERFUL AND HAPPY THANKSGIVING TO ALL!!!

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

THE VERTICAL FUND real time performance since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

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 2196.50 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 after being stopped out... enter a new short position with a close between 2191.50 and 2190.50... if filled, then place an exit stop to go flat at 2198.50... 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 2196.46...

The last trade at this writing is at 2201.00 in the December...

The main model is now long the December SP from 2182.90 as of Monday, November 21st...

This market finally broke away from that VP that had a grip on this market... so typical...

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 - - 2209.37 and must close below that price on Friday, January 27th to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2201.00

MAJOR - - 2196.46 and must close below that price on Tuesday, December 6th to confirm a new main model sell signal...

minor - - 2182.93

minor - - 2160.809

SVP - - none

minor - - none

MAJOR - - (none) and must close above that price on (none) to confirm a new main model buy signal...

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 11/8/16

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 2150.38 would turn the BTIT to neutral...

A close below 2029.408 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 2131.90 as of 11/8/16 - - there are 15 completed trades for a total gain of 288.00 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 November below 2001.76 would turn the MTI to neutral...

A monthly close for November 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 since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

The NT (Near Term) indicator
Follow through higher today for the NT indicator...
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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

Everything pointing still higher, there's nothing stopping this runaway freight train... that is, until it stops... notice the flat line is still moving counter to the market... the market rise is slowing down for the moment...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The same thing here, the momentum line continues higher without any hesitation... yet...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: DOWN since 11/23/16

A close above 1338.31 would turn the BTIT to up...

A close above 1265.11 would turn the BTIT to neutral...

The main model is now short the December gold from 1209.70 as of Wednesday, November 23st...

This recent long position didn't last very long... it seems the gold market is in a perpetual bear market with an occasional bear bounce every once in a while...

The last trade as of this writing is at 1188.60 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Friday, a close above 1200.00 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 1209.67...

GOLD DECEMBER VP PRICES

MAJOR - - 1399.64 and must close below that price on Wednesday, December 14th to confirm a new main model sell signal...

minor - - 1356.11

SVP - - none

minor - - 1258.89

MAJOR - - 1238.33 and must close above that price on Tuesday, December 6th to confirm a new main model buy signal...

minor - - 1209.67

MAJOR - - 1200.03 and must close above that price on Thursday, December 1st to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1188.60

THERE ARE NO VP PRICES BELOW THIS MARKET AT THIS TIME...

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...

Well, so much for that buy wiggle pattern in the flat line... I said earlier this week that if this market doesn't bottom here then we could be looking at yet another leg downward into the deep dark abyss... of course, I didn't think it would happen, not many did, but it did happen... thank goodness the main model took a short position early in this decline... look at how deeply over done the momentum line is right now... looks like serious liquidation going on, but who knows... just stay short and wait for the next signal... a return above 1200 would likely trigger a rally...

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image-5

THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

Very oversold here, but clearly this market should not be bought until a buy signal is trigger (and confirmed)...

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 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, November 23rd

"Sometimes the smallest step in the right direction ends up being the biggest step of your life."

* * * Benjamin Franklin

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

THE VERTICAL FUND real time performance since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

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 2196.50 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 after being stopped out... enter a new short position with a close between 2191.50 and 2190.50... if filled, then place an exit stop to go flat at 2198.50... 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 2196.46...

The last trade at this writing is at 2200.70 in the December...

The main model is now long the December SP from 2182.90 as of Monday, November 21st...

This market finally broke away from that VP that had a grip on this market... so typical...

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 - - 2209.37 and must close below that price on Friday, January 27th to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2200.70

MAJOR - - 2196.46 and must close below that price on Tuesday, December 6th to confirm a new main model sell signal...

minor - - 2182.93

minor - - 2160.809

SVP - - none

minor - - none

MAJOR - - (none) and must close above that price on (none) to confirm a new main model buy signal...

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 11/8/16

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 2150.38 would turn the BTIT to neutral...

A close below 2029.408 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 2131.90 as of 11/8/16 - - there are 15 completed trades for a total gain of 288.00 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 November below 2001.76 would turn the MTI to neutral...

A monthly close for November 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 since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

The NT (Near Term) indicator
A solid buy spike 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

The flat line is still moving lower despite the higher market... this indicates this market is currently overbought and losing some steam... but, no sell signal yet... the momentum line continues higher but is now approaching the overbought zone...

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image-9

THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line is also still moving higher but caution is now advised...

image-10

The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 11/11/16

A close above 1230.29 would turn the BTIT to up...

A close below 1208.01 would turn the BTIT to down...

The main model is now long the December gold from 1209.60 as of Monday, November 21st...

The last trade as of this writing is at 1212.80 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Wednesday, a close below 1209.70 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 1209.67...

GOLD DECEMBER VP PRICES

MAJOR - - 1399.64 and must close below that price on Wednesday, December 14th to confirm a new main model sell signal...

minor - - 1356.11

SVP - - none

minor - - 1258.89

MAJOR - - 1238.33 and must close above that price on Tuesday, December 6th to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1212.80

minor - - 1209.67

MAJOR - - 1200.03 and must close above that price on Thursday, December 1st 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...

Looks like this market may well have made a meaningful bottom here... the market is going sideways and the flat line continues higher...

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image-12

THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The momentum line continues lower, but we'll see what happens over the next few days...

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 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, November 22nd

"Sometimes the smallest step in the right direction ends up being the biggest step of your life."

* * * Benjamin Franklin

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

THE VERTICAL FUND real time performance since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.29%... this will be updated each Monday in the evening briefing...

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:   Continue reading

For Monday, November 21st

"Sometimes the smallest step in the right direction ends up being the biggest step of your life."

* * * Benjamin Franklin

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

THE VERTICAL FUND real time performance since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.59%... this will be updated each Monday in the evening briefing...

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 2182.90 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 after being stopped out... enter a new long position with a close between 2187.90 and 2188.90... if filled, then place an exit stop to go flat at 2180.90... 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 2182.93...

The last trade at this writing is at 2180.00 in the December...

The main model is now short the December SP from 2183.00 as of Friday, November 18th...

This market has done nothing but orbit around this VP price for several days now, this is so typical and is explained in the tutorial found below... once this VP lets go, this market is likely going to move significantly...

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 - - 2209.37 and must close below that price on Friday, January 27th to confirm a new main model sell signal...

MAJOR - - 2196.46 and must close below that price on Tuesday, December 6th to confirm a new main model sell signal...

minor - - 2182.93

TODAY'S CLOSING PRICE - - 2180.00

minor - - 2160.809

MAJOR - - 2131.39 and must close above that price on Thursday, December 8th to confirm a new main model buy signal...

minor - - 2046.32

SVP - - none

minor - - 2102.44

minor - - 2071.54

MAJOR - - 2065.706 and must close above that price on Tuesday, December 20th to confirm a new main model buy signal...

MAJOR - - 2026.52 and must close above that price on Thursday, January 26th to confirm a new main model buy signal...

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 11/8/16

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 2150.38 would turn the BTIT to neutral...

A close below 2029.408 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 2131.90 as of 11/8/16 - - there are 15 completed trades for a total gain of 288.00 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 November below 2001.76 would turn the MTI to neutral...

A monthly close for November 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 since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.59%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

The NT (Near Term) indicator
This market is now beginning to move away from its long overbought condition... notice the NT line move towards the neutral zone after holding in the overbought zone for a long time...
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

If you draw a line along the 3 highest descending peaks and the 3 lowest rising bottoms of the flat line, then you will see a very large wedge pattern... this pattern has been forming for more than a full year and is not visible when looking at the price chart itself... at this point, I'm not sure exactly what this wedge pattern suggests, maybe a deeper decline than expected... who knows, we'll see what happens next week, but it does appear that the bias is beginning to move downward... the momentum line, while still continuing higher, is now above the neutral zone and could turn here without appearing suspicious...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line still continues higher for now...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 11/11/16

A close above 1309.31 would turn the BTIT to up...

A close below 1208.01 would turn the BTIT to down... ALMOST!!!

The main model is now short the December gold from 1258.90 as of Thursday, November 10th...

The last trade as of this writing is at 1208.60 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Monday, a close above 1238.30 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 major VP at 1238.33...

GOLD DECEMBER VP PRICES

MAJOR - - 1399.64 and must close below that price on Wednesday, December 14th to confirm a new main model sell signal...

minor - - 1356.11

SVP - - none

minor - - 1258.89

MAJOR - - 1238.33 and must close above that price on Tuesday, December 6th to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1208.60

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 moving lower, possibly reaching a low of some sort, look at how oversold the flat line is right now... also, the momentum line is deeply oversold, as well... but, no buy signal yet...

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image-5

THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The gold bulls are probably not too happy right now, this market is slipping to yet another coma...

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 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, November 18th

"Nothing holds you back more than your own insecurities."

* * * Anonymous

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

THE VERTICAL FUND real time performance since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.59%... this will be updated each Monday in the evening briefing...

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 2183.00 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 after being stopped out... enter a new short position with a close between 2178.00 and 2177.00... if filled, then place an exit stop to go flat at 2185.00... 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 2182.93...

The last trade at this writing is at 2184.20 in the December...

The main model is now long the December SP from 2182.90 as of Thursday, November 17th...

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 - - 2209.37 and must close below that price on Friday, January 27th to confirm a new main model sell signal...

MAJOR - - 2196.46 and must close below that price on Tuesday, December 6th to confirm a new main model sell signal...

TODAY'S CLOSING PRICE - - 2184.20

minor - - 2182.93

minor - - 2160.809

MAJOR - - 2131.39 and must close above that price on Thursday, December 8th to confirm a new main model buy signal...

minor - - 2046.32

SVP - - none

minor - - 2102.44

minor - - 2071.54

MAJOR - - 2065.706 and must close above that price on Tuesday, December 20th to confirm a new main model buy signal...

MAJOR - - 2026.52 and must close above that price on Thursday, January 26th to confirm a new main model buy signal...

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 11/8/16

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 2148.67 would turn the BTIT to neutral...

A close below 2029.408 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 2131.90 as of 11/8/16 - - there are 15 completed trades for a total gain of 288.00 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 November below 2001.76 would turn the MTI to neutral...

A monthly close for November 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 since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.59%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

The NT (Near Term) indicator
A modest uptick today, but no longer so 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

All key lines are moving higher with nothing getting in the way...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line moving almost vertically higher...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 11/11/16

A close above 1309.31 would turn the BTIT to up...

A close below 1208.01 would turn the BTIT to down...

The main model is now short the December gold from 1258.90 as of Thursday, November 10th...

The last trade as of this writing is at 1217.30 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Friday, a close above 1238.30 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 major VP at 1238.33...

GOLD DECEMBER VP PRICES

MAJOR - - 1399.64 and must close below that price on Wednesday, December 14th to confirm a new main model sell signal...

minor - - 1356.11

SVP - - none

minor - - 1258.89

MAJOR - - 1238.33 and must close above that price on Tuesday, December 6th to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1217.30

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 shows a market already oversold, but all key lines continue downward...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

There's nothing stopping this market from moving still lower... surely, a firm dollar isn't helping gold...

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 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, November 17th

"Nothing holds you back more than your own insecurities."

* * * Anonymous

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

THE VERTICAL FUND real time performance since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.59%... this will be updated each Monday in the evening briefing...

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 above 2182.90 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 after being stopped out... enter a new short position with a close between 2155.80 and 2164.80... if filled, then place an exit stop to go flat at 2162.80... 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 2182.93...

The last trade at this writing is at 2173.80 in the December...

The main model is now short the December SP from 2182.90 as of Wednesday, November 16th...

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 - - 2209.37 and must close below that price on Friday, January 27th to confirm a new main model sell signal...

MAJOR - - 2196.46 and must close below that price on Tuesday, December 6th to confirm a new main model sell signal...

minor - - 2182.93

TODAY'S CLOSING PRICE - - 2173.80

minor - - 2160.809

MAJOR - - 2132.13 and must close above that price on Wednesday, December 7th to confirm a new main model buy signal...

minor - - 2046.405

SVP - - none

minor - - 2102.44

minor - - 2071.54

MAJOR - - 2065.706 and must close above that price on Tuesday, December 20th to confirm a new main model buy signal...

MAJOR - - 2027.78 and must close above that price on Wednesday, January 25th to confirm a new main model buy signal...

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 11/8/16

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 2148.67 would turn the BTIT to neutral...

A close below 2029.408 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 2131.90 as of 11/8/16 - - there are 15 completed trades for a total gain of 288.00 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 November below 2001.76 would turn the MTI to neutral...

A monthly close for November 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 since its inception on 9/30/16 currently stands as of this past Friday with a net gain of +0.59%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund

The NT (Near Term) indicator
The NT indicator shows a substantial sell spike today... liquidation going on???
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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 in deep into the overbought zone... a sell off of some sort would be healthy here...

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THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line continues higher but is no longer oversold...

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The DECEMBER Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 11/11/16

A close above 1309.31 would turn the BTIT to up...

A close below 1208.01 would turn the BTIT to down...

The main model is now short the December gold from 1258.90 as of Thursday, November 10th...

The last trade as of this writing is at 1224.80 for December...

TOMORROW'S GOLD TRADE STRATEGY:

For Thursday, a close above 1238.30 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 major VP at 1238.33...

GOLD DECEMBER VP PRICES

MAJOR - - 1399.64 and must close below that price on Wednesday, December 14th to confirm a new main model sell signal...

minor - - 1356.11

SVP - - none

minor - - 1258.89

MAJOR - - 1238.33 and must close above that price on Tuesday, December 6th to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1224.80

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 flat line is moving lower again as of today, it could be forming one of those bottoming wiggle patterns which are typically reliable and give advanced notice of a main model buy signal... but for now, not yet...

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THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

If this market doesn't hold here and rally soon, then we could well witness another major leg downward for gold...

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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 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...