For Tuesday, January 3rd

"Make things as simple as possible, but not simpler."

* * * Albert Einstein

THE MARKETS WILL BE CLOSED ON MONDAY TO OBSERVE NEWS YEAR'S DAY AND WILL REOPEN ON TUESDAY...

HERE'S WISHING EACH AND EVERY ONE OF YOU A HAPPY NEW YEAR AND MAY ALL YOUR DREAMS COME TRUE IN 2017!!!

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 - - not all trades are posted since the primary focus of the trading team is on the markets

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 -.39%%... 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 2241.10 in the MARCH 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 2246.10 and 2247.10... if filled, then place an exit stop to go flat at 2239.10... please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A VP at 2241.18...

The last trade at this writing is at 2235.00 in the March...

The main model is now short the March SP from 2250.70 as of Friday, December 30th...

This market rallied above the 2250.65 VP early in the day and then sold down without looking back... the mini contract did trade below the next lower VP, but all signals are taken from the large contract since the mini very often gives false signals...

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 MARCH VP PRICES

MAJOR - - 2283.705 and must close below that price on Thursday, January 19th to confirm a new main model sell signal...

MAJOR - - 2284.46 and must close below that price on Friday, January 13th to confirm a new main model sell signal...

minor - - 2271.66

minor - - 2271.29

minor - - 2250.65

MAJOR - - 2243.12 and must close above that price on Thursday, January 5th to confirm a new main model buy signal...

minor - - 2241.18

TODAY'S CLOSING PRICE - - 2235.00

MAJOR - - 2228.63 and must close above that price on Friday, January 6th to confirm a new main model buy signal...

minor - - 2176.74

SVP - - none

MAJOR - - 2143.001 and must close above that price on Wednesday, February 1st 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: DOWN as of 12/28/16

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

A close above 2264.98 would turn the BTIT to up...

A close above 2255.37 would turn the BTIT to neutral...

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 optimized trading strategy is a reliable, valid, and profitable strategy designed for those who prefer a broader longer term trade position without close daily monitoring... 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: Short from 2252.60 as of 12/28/16 - - there are now 17 completed trades for a total gain of 447.90 SP points...

VERY IMPORTANT: Please note, all price signals must be taken from the large contract and then the mini can be traded, the mini gives too many false signals... therefore, the following instructions apply only for the large contract... so, get the signal from the large contract and then trade the mini on that large contract signal... 17 completed trades following this format has generated 447.90 SP points profit over the past 16 months... you could take the large contract signal and then trade any SP based ETF on that signal...

For the BTIT trader, you are now short from 2252.60... place a buy stop to go flat at 2257.40... go long at 2265.00 on a straight stop, if filled place a sell stop at 2255.00...

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 January below 2119.36 would turn the MTI to neutral...

A monthly close for January 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 -.39%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund - - not all trades are posted since the primary focus of the trading team is on the markets

The NT (Near Term) indicator
Big decline today in the NT indicator...

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

THE FLAT LINE INDICATOR

All key line continue lower... it looks like the top is in place for the near term, at least...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The momentum line speaks for itself, down and dirty...

The FEBRUARY Gold futures

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

A close above 1331.11 would turn the BTIT to up...

A close above 1200.11 would turn the BTIT to neutral...

The main model is now long the February gold from 1133.30 as of Tuesday, December 27th...

TOMORROW'S GOLD TRADE STRATEGY:

For Tuesday, a close below 1142.70 in the February 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 key floor price at 1142.603...

GOLD FEBRUARY VP PRICES

MAJOR - - 1190.27 and must close below that price on Wednesday, January 18th to confirm a new main model sell signal...

minor - - 1172.21

SVP - - none

TODAY'S CLOSING PRICE - - 1151.40

Key floor price - - 1142.603

minor - - 1126.63

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

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

The Two Main Model Trade Rules:

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

Flat Line Indicator (FLI) for GLD...

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

The momentum line continues higher, but we can now see the flat line move into the overbought zone... expect a possible pull back... just, maybe...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line still continues higher from a deeply oversold level...

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...

Rules for automatic and optimal BTIT trading:

USE ONLY THE LARGE CONTRACT FOR ALL SIGNALS

1) Enter a new position on a straight stop and use a simple 10 point exit stop from the BTIT signal entry price for the day the trade is entered...

For example: If 2254.19 turns the BTIT down, then place a sell stop to go short at 2254.10 and also place an exit buy stop at 2264.10 to go flat... or, if 2254.19 turns the BTIT up, then place a buy stop to go long at 2254.20 and also place an exit sell stop at 2242.20 to go flat...

2) If the signal is not confirmed on the close and you're not stopped out, then close it out at the market and wait for the next signal...

3) If the signal is confirmed on the close, then place an exit stop for each day 2 points beyond the next day's BTIT "turn to neutral" price listed in the evening briefing that evening...

For Example: if you're long and the 2258.43 turns the BTIT to neutral, then place a sell stop to go flat at 2256.40... if you're short and the 2258.43 turns the BTIT to neutral, then place a buy stop to go flat at 2260.50...it makes no difference what the market does after that, your BTIT position would be flat, and then wait for the next new signal... there is nothing to think about and nothing to decide...

17 completed trades following this format has generated 447.90 SP points profit over the past 16 months... any questions, just ask...

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, December 30th

"There are no mistakes in your past if you learned from them."

* * * Anonymous

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 - - not all trades are posted since the primary focus of the trading team is on the markets

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 -.39%%... 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 2243.20 in the MARCH 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 2238.20 and 2237.20... if filled, then place an exit stop to go flat at 2245.20... 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 2243.12...

The last trade at this writing is at 2245.00 in the March...

The main model is now long the March SP from 2241.10 as of Thursday, December 29th...

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 MARCH VP PRICES

MAJOR - - 2287.17 and must close below that price on Thursday, January 5th to confirm a new main model sell signal...

MAJOR - - 2277.52 and must close below that price on Tuesday, January 3rd to confirm a new main model sell signal...

minor - - 2274.79

minor - - 2270.49

minor - - 2250.65

TODAY'S CLOSING PRICE - - 2245.00

MAJOR - - 2243.12 and must close above that price on Thursday, January 5th to confirm a new main model buy signal...

minor - - 2241.18

MAJOR - - 2228.63 and must close above that price on Friday, January 6th to confirm a new main model buy signal...

minor - - 2176.74

SVP - - none

MAJOR - - 2143.001 and must close above that price on Wednesday, February 1st 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: DOWN as of 12/28/16

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

A close above 2267.11 would turn the BTIT to up...

A close above 2262.48 would turn the BTIT to neutral...

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 optimized trading strategy is a reliable, valid, and profitable strategy designed for those who prefer a broader longer term trade position without close daily monitoring... 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: Short from 2252.60 as of 12/28/16 - - there are now 17 completed trades for a total gain of 447.90 SP points... the BTIT closed out the 17th trade today, a long position for a profit of 46.60 SP points...

VERY IMPORTANT: Please note, all price signals must be taken from the large contract and then the mini can be traded, the mini gives too many false signals... therefore, the following instructions apply only for the large contract... so, get the signal from the large contract and then trade the mini on that large contract signal... 17 completed trades following this format has generated 447.90 SP points profit over the past 16 months... you could take the large contract signal and then trade any SP based ETF on that signal...

For the BTIT trader, you are now short from 2252.60... place a buy stop to go flat at 2264.50...

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 -.39%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund - - not all trades are posted since the primary focus of the trading team is on the markets

The NT (Near Term) indicator
Absolutely no change whatsoever today...

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... notice today that the flat line is at a place where the market price and anti price begin to move closer together... this suggests a possible rally here while the bias is still downward for now, according to the momentum line...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line continues lower from a highly overbought level...

The FEBRUARY Gold futures

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

A close above 1331.11 would turn the BTIT to up...

A close above 1200.11 would turn the BTIT to neutral...

The main model is now long the February gold from 1133.30 as of Tuesday, December 27th...

TOMORROW'S GOLD TRADE STRATEGY:

For Friday, a close below 1126.70 in the February 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 and 1126.63...

GOLD FEBRUARY VP PRICES

MAJOR - - 1190.27 and must close below that price on Wednesday, January 18th to confirm a new main model sell signal...

minor - - 1172.21

SVP - - none

TODAY'S CLOSING PRICE - - 1158.10

minor - - 1126.63

MAJOR - - (none) and must close above that price on (none) 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 graph shows a market that is ready to jump out and do flips... this is a bullish picture...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

This LT graph is bullish, hold the long gold position per the main model signal...

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...

Rules for automatic and optimal BTIT trading:

USE ONLY THE LARGE CONTRACT FOR ALL SIGNALS

1) Enter a new position on a straight stop and use a simple 10 point exit stop from the BTIT signal entry price for the day the trade is entered...

For example: If 2254.19 turns the BTIT down, then place a sell stop to go short at 2254.10 and also place an exit buy stop at 2264.10 to go flat... or, if 2254.19 turns the BTIT up, then place a buy stop to go long at 2254.20 and also place an exit sell stop at 2242.20 to go flat...

2) If the signal is not confirmed on the close and you're not stopped out, then close it out at the market and wait for the next signal...

3) If the signal is confirmed on the close, then place an exit stop for each day 2 points beyond the next day's BTIT "turn to neutral" price listed in the evening briefing that evening...

For Example: if you're long and the 2258.43 turns the BTIT to neutral, then place a sell stop to go flat at 2256.40... if you're short and the 2258.43 turns the BTIT to neutral, then place a buy stop to go flat at 2260.50...it makes no difference what the market does after that, your BTIT position would be flat, and then wait for the next new signal... there is nothing to think about and nothing to decide...

17 completed trades following this format has generated 447.90 SP points profit over the past 16 months... any questions, just ask...

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, December 29th

"There are no mistakes in your past if you learned from them."

* * * Anonymous

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...

The optimized BTIT trading strategy is explained below in the BTIT section and will be found in the tutorial section after today... any questions, just ask...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund - - not all trades are posted since the primary focus of the trading team is on the markets

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 -.39%%... 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 2252.60 in the MARCH 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 2257.60 and 2258.60... if filled, then place an exit stop to go flat at 2250.60... 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 2250.65...

The last trade at this writing is at 2245.00 in the March...

The main model is now short the March SP from 2252.60 as of Wednesday, December 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 MARCH VP PRICES

MAJOR - - 2287.17 and must close below that price on Thursday, January 5th to confirm a new main model sell signal...

MAJOR - - 2277.52 and must close below that price on Tuesday, January 3rd to confirm a new main model sell signal...

minor - - 2274.79

minor - - 2270.49

minor - - 2250.65

TODAY'S CLOSING PRICE - - 2245.00

MAJOR - - 2243.12 and must close above that price on Thursday, January 5th to confirm a new main model buy signal...

minor - - 2241.18

MAJOR - - 2228.63 and must close above that price on Friday, January 6th to confirm a new main model buy signal...

minor - - 2176.74

SVP - - none

MAJOR - - 2143.001 and must close above that price on Wednesday, February 1st 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: DOWN as of 12/28/16

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

A close above 2268.04 would turn the BTIT to up...

A close above 2265.08 would turn the BTIT to neutral...

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 optimized trading strategy is a reliable, valid, and profitable strategy designed for those who prefer a broader longer term trade position without close daily monitoring... 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: Short from 2252.60 as of 12/28/16 - - there are now 17 completed trades for a total gain of 447.90 SP points... the BTIT closed out the 17th trade today, a long position for a profit of 46.60 SP points...

VERY IMPORTANT: Please note, all price signals must be taken from the large contract and then the mini can be traded, the mini gives too many false signals... therefore, the following instructions apply only for the large contract... so, get the signal from the large contract and then trade the mini on that large contract signal... 16 completed trades following this format has generated 447.90 SP points profit over the past 16 months... you could take the large contract signal and then trade any SP based ETF on that signal...

The market is currently 6 points below the BTIT entry point, so if you wanted to take this new short BTIT position, then the risk would be 6 points greater...

For the BTIT trader, you are now short from 2252.60... place a buy stop to go flat at 2267.10...

Rules for automatic and optimal BTIT trading:

1) Enter a new position on a straight stop and use a simple 10 point exit stop from the BTIT signal entry price for the day the trade is entered...

For example: If 2254.19 turns the BTIT down, then place a sell stop to go short at 2254.10 and also place an exit buy stop at 2264.10 to go flat... or, if 2254.19 turns the BTIT up, then place a buy stop to go long at 2254.20 and also place an exit sell stop at 2242.20 to go flat...

2) If the signal is not confirmed on the close and you're not stopped out, then close it out at the market and wait for the next signal...

3) If the signal is confirmed on the close, then place an exit stop for each day 2 points beyond the next day's BTIT "turn to neutral" price listed in the evening briefing that evening...

For Example: if you're long and the 2258.43 turns the BTIT to neutral, then place a sell stop to go flat at 2256.40... if you're short and the 2258.43 turns the BTIT to neutral, then place a buy stop to go flat at 2260.50...it makes no difference what the market does after that, your BTIT position would be flat, and then wait for the next new signal... there is nothing to think about and nothing to decide...

17 completed trades following this format has generated 447.90 SP points profit over the past 16 months... any questions, just ask...

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 -.39%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund - - not all trades are posted since the primary focus of the trading team is on the markets

The NT (Near Term) indicator
No visible movement for the NT indicator today...

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 main model is short... notice how the market price moved below the anti price several days ago, that was a clear advance warning...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT momentum line has been moving lower for several days in advance of today's sell signal... that was a warning...

The FEBRUARY Gold futures

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

A close above 1331.11 would turn the BTIT to up...

A close above 1200.11 would turn the BTIT to neutral...

The main model is now long the February gold from 1133.30 as of Tuesday, December 27th...

TOMORROW'S GOLD TRADE STRATEGY:

For Thursday, a close below 1126.70 in the February 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 and 1126.63...

GOLD FEBRUARY VP PRICES

MAJOR - - 1190.27 and must close below that price on Wednesday, January 18th to confirm a new main model sell signal...

minor - - 1172.21

SVP - - none

TODAY'S CLOSING PRICE - - 1143.40

minor - - 1126.63

MAJOR - - 1121.59 and must close above that price on Thursday, December 29th to confirm a new main model buy signal... THIS VP EXPIRES TOMORROW, THE BUY SIGNAL IS ALREADY IN PLACE...

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

The Two Main Model Trade Rules:

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

Flat Line Indicator (FLI) for GLD...

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

This flat line graph is beginning to look bullish... but, we already know how the gold market is full of surprises...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

So far so good, the momentum line continues higher... and you you recall the two weekly charts I included yesterday, this could well be the beginning of a more extended rally... but, time will tell..

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, December 28th

"There are no mistakes in your past if you learned from them."

* * * Anonymous

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...

Some time this week, probably tomorrow, I will introduce an optimized BTIT trading strategy that can be used automatically without having to watch the market, only stops will need to be placed and nothing more... it will be very much like and as easy to use as the current Hoban Rule...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund - - not all trades are posted since the primary focus of the trading team is on the markets

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 -.39%%... 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 2252.60 in the MARCH 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 2247.60 and 2246.60... if filled, then place an exit stop to go flat at 2254.60... 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 key floor price at 2252.52...

The last trade at this writing is at 2261.50 in the March...

The main model is now long the March SP from 2199.40 basis the December SP from 2182.90 as of Monday, December 5th...

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 MARCH VP PRICES

MAJOR - - 2287.17 and must close below that price on Thursday, January 5th to confirm a new main model sell signal...

MAJOR - - 2277.52 and must close below that price on Tuesday, January 3rd to confirm a new main model sell signal...

minor - - 2274.79

minor - - 2270.49

TODAY'S CLOSING PRICE - - 2261.50

key floor price - - 2252.52

minor - - 2241.46

MAJOR - - 2230.73 and must close above that price on Wednesday, January 4th to confirm a new main model buy signal...

minor - - 2176.74

SVP - - none

MAJOR - - 2143.001 and must close above that price on Wednesday, February 1st 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 12/7/16

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 2255.91 would turn the BTIT to neutral...

A close below 2252.52 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 2206.00 as of 12/7/16 - - there are 16 completed trades for a total gain of 401.30 SP points...

For the BTIT strategy, attention to the market action is still required when the market approaches the signal price, treating the signal price the same as a VP signal price, attempting this strategy on a close only basis is not as 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 -.39%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund - - not all trades are posted since the primary focus of the trading team is on the markets

The NT (Near Term) indicator

The NT indicator moved a bit higher again today, basically drifting up and back without any real conviction...

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 caution here is that all key lines are now moving lower and the market price is below the anti price... this suggests the real possibility of a down trend forming... the momentum line is clearly moving lower and has been moving lower for several days... this is not a bullish sign, at least not for the near term...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

Further warning of a possible downward move can be seen here... notice that the market doesn't necessarily have to move lower as soon as the momentum line moves lower, look at the patterns earlier in this chart, you can see how the market may just drift sideways for a while, but then there is always some sort of market decline before the momentum line turns back up... so, we could see a market that goes sideways and/or lower for a brief while... but be on the look out...

The FEBRUARY Gold futures

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

A close above 1331.11 would turn the BTIT to up...

A close above 1200.11 would turn the BTIT to neutral...

The main model is now long the February gold from 1133.30 as of Tuesday, December 27th...

TOMORROW'S GOLD TRADE STRATEGY:

For Wednesday, a close below 1126.70 in the February 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 and 1126.63...

GOLD FEBRUARY VP PRICES

MAJOR - - 1190.27 and must close below that price on Wednesday, January 18th to confirm a new main model sell signal...

minor - - 1172.21

SVP - - none

TODAY'S CLOSING PRICE - - 1140.20

minor - - 1126.63

MAJOR - - 1121.59 and must close above that price on Thursday, December 29th 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...

Here we have what looks like the inverse of the SP flat line chart... the GLD flat line pattern looks bullish for now, all lines are moving higher, and the market price is above the anti price... this is a bullish picture, the main model now holds a long position and will remain long for now...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line is now clearly moving higher... if you look at all the previous momentum lines, you will notice that when this line turns upwards that the market also turns upwards... this is a good indication that gold may well have bottomed here for a while and a sustainable rally could have begun as of today...

Here's the weekly gold chart... it looks like we're looking at a good place to bounce...

Here's a weekly gold miner's chart, the same thing can be said for a bounce here...


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, December 27th

"If at first you don't succeed, then skydiving is not for you."

* * * Anonymous

THE MARKETS WILL BE CLOSED ON MONDAY TO OBSERVED THE CHRISTMAS HOLIDAY AND WILL REOPEN ON TUESDAY...

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 - - not all trades are posted since the primary focus of the trading team is on the markets

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 -.39%%... 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 below 2250.00 in the MARCH 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 2245.00 and 2244.00... if filled, then place an exit stop to go flat at 2252.00... 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 key floor price at 2249.91...

The last trade at this writing is at 2259.70 in the March...

The main model is now long the March SP from 2199.40 basis the December SP from 2182.90 as of Monday, December 5th...

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 MARCH VP PRICES

MAJOR - - 2287.17 and must close below that price on Thursday, January 5th to confirm a new main model sell signal...

minor - - 2274.79

TODAY'S CLOSING PRICE - - 2259.70

key floor price - - 2249.91

minor - - 2241.46

MAJOR - - 2230.73 and must close above that price on Wednesday, January 4th to confirm a new main model buy signal...

minor - - 2176.74

SVP - - none

MAJOR - - 2143.001 and must close above that price on Wednesday, February 1st 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 12/7/16

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 2249.91 would turn the BTIT to neutral...

A close below 2114.62 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

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

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

The BTIT current trade position: Long from 2206.00 as of 12/7/16 - - there are 16 completed trades for a total gain of 354.70 SP points...

For the BTIT strategy, attention to the market action is still required when the market approaches the signal price, treating the signal price the same as a VP signal price, attempting this strategy on a close only basis is not as 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 -.39%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund - - not all trades are posted since the primary focus of the trading team is on the markets

The NT (Near Term) indicator
After the NT indicator moved closer to the neutral zone, it gave another buy spike today...

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 indicator does looks toppy, look at the momentum line... although the market itself isn't going down at the moment...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

Look how deeply overbought the momentum line is... caution here...

The FEBRUARY Gold futures

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

A close above 1331.11 would turn the BTIT to up...

A close above 1200.11 would turn the BTIT to neutral...

The main model is now short the February gold from 1159.10 as of Wednesday, December 14th...

It's definitely very good to be short this gold market...

TOMORROW'S GOLD TRADE STRATEGY:

For Tuesday, a close above 1133.30 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 key ceiling price at 1133.35...

GOLD FEBRUARY VP PRICES

MAJOR - - 1190.27 and must close below that price on Wednesday, January 18th to confirm a new main model sell signal...

minor - - 1172.21

SVP - - none

key ceiling price - - 1133.35

TODAY'S CLOSING PRICE - - 1133.10

minor - - 1126.63

MAJOR - - 1121.59 and must close above that price on Thursday, December 29th 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 is again beginning to look bullish... this market is so oversold and now the deeply oversold momentum line is again moving higher... we could see a rally here, keep your watch on the key ceiling price no far from today's close...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

Okay, check this out!!! The momentum line actually turned higher today... this market may well be ripe for a good rally from here...

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, December 23rd

"If at first you don't succeed, then skydiving is not for you."

* * * Anonymous

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 - - not all trades are posted since the primary focus of the trading team is on the markets

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 -.39%%... 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 2246.10 in the MARCH 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 2241.10 and 2240.10... if filled, then place an exit stop to go flat at 2246.90... 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 key floor price at 2246.03...

The last trade at this writing is at 2257.50 in the March...

The main model is now long the March SP from 2199.40 basis the December SP from 2182.90 as of Monday, December 5th...

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 MARCH VP PRICES

MAJOR - - 2287.17 and must close below that price on Thursday, January 5th to confirm a new main model sell signal...

minor - - 2274.79

TODAY'S CLOSING PRICE - - 2257.50

key floor price - - 2246.03

minor - - 2241.46

MAJOR - - 2230.73 and must close above that price on Wednesday, January 4th to confirm a new main model buy signal...

minor - - 2176.74

SVP - - none

MAJOR - - 2143.001 and must close above that price on Wednesday, February 1st 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 12/7/16

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 2246.03 would turn the BTIT to neutral...

A close below 2114.62 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

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

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

The BTIT current trade position: Long from 2206.00 as of 12/7/16 - - there are 16 completed trades for a total gain of 354.70 SP points...

For the BTIT strategy, attention to the market action is still required when the market approaches the signal price, treating the signal price the same as a VP signal price, attempting this strategy on a close only basis is not as 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 -.39%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund - - not all trades are posted since the primary focus of the trading team is on the markets

The NT (Near Term) indicator

The NT is inching lower, apparently working off an overbought condition... today's market action looked more like a typical down day in an up trend, nothing too scary yet...

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 move lower and the closing price is now below the anti price but not far from it... the momentum line is moving lower and that could become a problem for the longs...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The LT is also moving lower... a top??? Let's keep a watch on the slowly rising BTIT floor price for a signal...

The FEBRUARY Gold futures

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

A close above 1331.11 would turn the BTIT to up...

A close above 1200.11 would turn the BTIT to neutral...

The main model is now short the February gold from 1159.10 as of Wednesday, December 14th...

It's definitely very good to be short this gold market...

TOMORROW'S GOLD TRADE STRATEGY:

For Friday, a close above 1146.80 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 1146.82...

GOLD FEBRUARY VP PRICES

MAJOR - - 1254.04 and must close below that price on Tuesday, January 10th to confirm a new main model sell signal...

minor - - 1228.85

SVP - - none

minor - - 1156.99

MAJOR - - 1146.82 and must close above that price on Friday, December 23rd to confirm a new main model buy signal... BIG DAY TOMORROW, THIS VP EXPIRES IF NOT TRIGGERED AND CONFIRMED...

TODAY'S CLOSING PRICE - - 1130.00

THERE ARE NO VP'S BELOW THIS MARKET!!!

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, this is the flat line indicator, and everything for this market is FLAT... okay... the momentum line is aimless while holding in deeply oversold territory... we're staying short this market for now...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The obvious question here is how low can the momentum line go before this market comes back to life???

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, December 22nd

"Money is the root of all wealth."

* * * Anonymous

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 - - not all trades are posted since the primary focus of the trading team is on the markets

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 -.39%%... 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 below 2244.90 in the MARCH 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 2239.90 and 2238.90... if filled, then place an exit stop to go flat at 2246.90... 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 key floor price at 2244.86...

The last trade at this writing is at 2260.50 in the March...

The main model is now long the March SP from 2199.40 basis the December SP from 2182.90 as of Monday, December 5th...

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 MARCH VP PRICES

MAJOR - - 2287.17 and must close below that price on Thursday, January 5th to confirm a new main model sell signal... xxx

minor - - 2274.79xxx

TODAY'S CLOSING PRICE - - 2260.50

key floor price - - 2244.86

minor - - 2241.701xxx

MAJOR - - 2231.405 and must close above that price on Tuesday, January 3rd to confirm a new main model buy signal... xxx

minor - - 2176.74xxx

SVP - - none

MAJOR - - 2143.001 and must close above that price on Wednesday, February 1st to confirm a new main model buy signal... xxx

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 12/7/16

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 2243.97 would turn the BTIT to neutral...

A close below 2114.62 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

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

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

The BTIT current trade position: Long from 2206.00 as of 12/7/16 - - there are 16 completed trades for a total gain of 354.70 SP points...

For the BTIT strategy, attention to the market action is still required when the market approaches the signal price, treating the signal price the same as a VP signal price, attempting this strategy on a close only basis is not as 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 -.39%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund - - not all trades are posted since the primary focus of the trading team is on the markets

The NT (Near Term) indicator
A solid down tick in the NT indicator for today, it looks like the selling may have started today...

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

Today's closing price is getting near the anti price, this could be the beginning of a down trend... a close watch tomorrow is warranted... also, the momentum line is beginning to bend just a bit...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

This momentum line is now perfectly flat for two consecutive days... caution here... and, of course, this momentum line is so extremely overbought and sitting right now in the bull trap vicinity, don't get caught in a trap...

An interesting market note for today:

Today is the Winter Solstice... according to W.D. Gann, today marks the day the market sentiment is the most vulnerable to change... I thought we would actually rally today, but it looks like Mr. Gann may well be on to something here... it should be interesting to see how this plays itself out...

The FEBRUARY Gold futures

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

A close above 1331.11 would turn the BTIT to up...

A close above 1200.11 would turn the BTIT to neutral...

The main model is now short the February gold from 1159.10 as of Wednesday, December 14th...

It's definitely very good to be short this gold market...

TOMORROW'S GOLD TRADE STRATEGY:

For Thursday, a close above 1146.80 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 1146.82...

GOLD FEBRUARY VP PRICES

MAJOR - - 1254.04 and must close below that price on Tuesday, January 10th to confirm a new main model sell signal...

minor - - 1228.85

SVP - - none

minor - - 1156.99

MAJOR - - 1146.82 and must close above that price on Friday, December 23rd to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1132.50

THERE ARE NO VP'S BELOW THIS MARKET!!!

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

The Two Main Model Trade Rules:

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

Flat Line Indicator (FLI) for GLD...

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

This market is drifting with no direction, but also no buy signals in range today...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

A slow drip downward... oversold, but no buy signal...

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, December 21st

"Money is the root of all wealth."

* * * Anonymous

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 - - not all trades are posted since the primary focus of the trading team is on the markets

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 -.39%%... 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 2244.00 in the MARCH 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 2239.00 and 2238.00... if filled, then place an exit stop to go flat at 2246.00... 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 key floor price at 2243.97...

The last trade at this writing is at 2266.50 in the March...

The main model is now long the March SP from 2199.40 basis the December SP from 2182.90 as of Monday, December 5th...

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 MARCH VP PRICES

MAJOR - - 2287.17 and must close below that price on Thursday, January 5th to confirm a new main model sell signal...

minor - - 2274.79

TODAY'S CLOSING PRICE - - 2266.50

key floor price - - 2243.97

MAJOR - - 2223.01 and must close below that price on Monday, December 26th to confirm a new main model sell signal...

minor - - 2209.32

minor - - 2176.74

minor - - 2175.21

SVP - - none

MAJOR - - 2143.001 and must close above that price on Wednesday, February 1st 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 12/7/16

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 2243.97 would turn the BTIT to neutral...

A close below 2114.62 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

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

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

The BTIT current trade position: Long from 2206.00 as of 12/7/16 - - there are 16 completed trades for a total gain of 354.70 SP points...

For the BTIT strategy, attention to the market action is still required when the market approaches the signal price, treating the signal price the same as a VP signal price, attempting this strategy on a close only basis is not as 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 -.39%... this will be updated each Monday in the evening briefing...

You can now follow The Vertical Fund's trading action on Twitter @theverticalfund - - not all trades are posted since the primary focus of the trading team is on the markets

The NT (Near Term) indicator

A solid up spike today...

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... the main model remains long this market...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

Look how deeply into the overbought zone this momentum line has gone... and is still going...

The FEBRUARY Gold futures

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

A close above 1331.11 would turn the BTIT to up...

A close above 1200.11 would turn the BTIT to neutral...

The main model is now short the February gold from 1159.10 as of Wednesday, December 14th...

It's definitely very good to be short this gold market...

TOMORROW'S GOLD TRADE STRATEGY:

For Wednesday, a close above 1146.80 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 1146.82...

GOLD FEBRUARY VP PRICES

MAJOR - - 1254.04 and must close below that price on Tuesday, January 10th to confirm a new main model sell signal...

minor - - 1228.85

SVP - - none

minor - - 1156.99

MAJOR - - 1146.82 and must close above that price on Friday, December 23rd to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1133.10

THERE ARE NO VP'S BELOW THIS MARKET!!!

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

The Two Main Model Trade Rules:

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

Flat Line Indicator (FLI) for GLD...

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

The market price and the anti price are tracking each other within a point or so while the momentum line is basically drifting sideways... this market has no direction and is simply drifting... the main model remains short this market...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The momentum line here is seriously oversold, but clearly no buy signal anywhere to be found... we'll stay short this market until it give a signal...

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, December 20th…

"Money is the root of all wealth."

* * * Anonymous

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 -.39%%... 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 below 2243.40 in the MARCH 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 2238.40 and 2237.40... if filled, then place an exit stop to go flat at 2245.40... 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 key floor price at 2243.35...

The last trade at this writing is at 2258.30 in the March...

The main model is now long the March SP from 2199.40 basis the December SP from 2182.90 as of Monday, December 5th...

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 MARCH VP PRICES

MAJOR - - 2287.17 and must close below that price on Thursday, January 5th to confirm a new main model sell signal...

minor - - 2274.79

TODAY'S CLOSING PRICE - - 2258.30

key floor price - - 2243.35

MAJOR - - 2223.01 and must close below that price on Monday, December 26th to confirm a new main model sell signal...

minor - - 2209.32

minor - - 2176.74

minor - - 2175.21

SVP - - none

MAJOR - - 2143.001 and must close above that price on Wednesday, February 1st 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 12/7/16

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 2243.35 would turn the BTIT to neutral...

A close below 2114.62 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

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

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

The BTIT current trade position: Long from 2206.00 as of 12/7/16 - - there are 16 completed trades for a total gain of 354.70 SP points...

For the BTIT strategy, attention to the market action is still required when the market approaches the signal price, treating the signal price the same as a VP signal price, attempting this strategy on a close only basis is not as 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 -.39%... 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 moving lower while it works off an overbought condition...

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 continues its sideways drift while the momentum line continues higher...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

The first thing you may want to notice is how deeply into the overbought zone the momentum line has gone... even if this were the biggest bull market in history, the buying is getting a bit over done for the time being, according to this momentum line...

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 1236.11 would turn the BTIT to neutral...

The main model is now short the February gold from 1159.10 as of Wednesday, December 14th...

It's definitely very good to be short this gold market...

TOMORROW'S GOLD TRADE STRATEGY:

For Tuesday, a close above 1146.80 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 1146.82...

GOLD FEBRUARY VP PRICES

MAJOR - - 1254.04 and must close below that price on Tuesday, January 10th to confirm a new main model sell signal...

minor - - 1228.85

SVP - - none

minor - - 1156.99

MAJOR - - 1146.82 and must close above that price on Friday, December 23rd to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1140.90

THERE ARE NO VP'S BELOW THIS MARKET!!!

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

The Two Main Model Trade Rules:

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

Flat Line Indicator (FLI) for GLD...

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

While the flat line closed below the anti price yesterday, it closed just barely above it today... also, the momentum line is actually drifting sideways to lower right now... this market is aimless and looking for direction... meanwhile, the main model remains short...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

Look how oversold this momentum line has become... and it's still moving lower... EGADS!!! I would not suggest trying to pick a bottom, this market could turn around overnight or it could keep moving lower for another few months... just stay with the main model short position and let the market tell us when and if to buy...

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, December 19th

"I'm great at multitasking; I can waste time, be unproductive, and procrastinate all at the same time."

* * * Anonymous

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 +0.19%... 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 2243.00 in the MARCH 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 2238.00 and 2237.00... if filled, then place an exit stop to go flat at 2245.00... 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 key floor price at 2242.99...

The last trade at this writing is at 2255.20 in the March...

The main model is now long the December SP from 2182.90 as of Monday, December 5th...

NEW SP VP POINTS TODAY!!! AND CLOSER TO THE MARKET!!!

THE VP PRICE MAP FOR TOMORROW

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

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

SP MARCH VP PRICES

MAJOR - - 2287.17 and must close below that price on Thursday, January 5th to confirm a new main model sell signal...

minor - - 2274.79

TODAY'S CLOSING PRICE - - 2255.20

key floor price - - 2242.99

MAJOR - - 2223.01 and must close below that price on Monday, December 26th to confirm a new main model sell signal...

minor - - 2209.32

minor - - 2176.74

minor - - 2175.21

SVP - - none

MAJOR - - 2143.001 and must close above that price on Wednesday, February 1st 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 12/7/16

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 2242.99 would turn the BTIT to neutral...

A close below 2114.62 would turn the BTIT to down...

THE BTIT LONGER TERM TRADING STRATEGY

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

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

The BTIT current trade position: Long from 2206.00 as of 12/7/16 - - there are 16 completed trades for a total gain of 354.70 SP points...

For the BTIT strategy, attention to the market action is still required when the market approaches the signal price, treating the signal price the same as a VP signal price, attempting this strategy on a close only basis is not as 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 +0.19%... 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 is beginning to inch lower today working off an overbought condition...

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 beginning to move sideways as of today, no clear direction here, looks like a stall... the main model remains long and the momentum line still works higher...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:

Notice how the momentum line is now rolling over... this started as of today and this momentum line is seriously overbought... the BTIT neutral price is not far away from the market now and that same price is also a key floor price for this market now... just use some caution ahead......

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 1236.11 would turn the BTIT to neutral...

The main model is now short the February gold from 1159.10 as of Wednesday, December 14th...

It's definitely very good to be short this gold market...

TOMORROW'S GOLD TRADE STRATEGY:

For Monday, a close above 1146.80 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 1146.82...

GOLD FEBRUARY VP PRICES

MAJOR - - 1254.04 and must close below that price on Tuesday, January 10th to confirm a new main model sell signal...

minor - - 1228.85

SVP - - none

minor - - 1170.85

MAJOR - - 1159.05 and must close above that price on Monday, December 19th to confirm a new main model buy signal... GOOD LUCK HERE!!!

minor - - 1156.99

MAJOR - - 1146.82 and must close above that price on Friday, December 23rd to confirm a new main model buy signal...

TODAY'S CLOSING PRICE - - 1133.20

THERE ARE NO VP'S BELOW THIS MARKET!!!

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...

Nothing looks good here, the momentum line is moving yet lower and deeply into the oversold zone where no momentum line has gone before... look at the momentum line earlier, you can see a major rounding price bottom after the momentum line when it moved this far down previously... when this market finally bottoms, then I think we could see a multi year low... who knows...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

Wow... look how low this momentum line has gone... so far... and with nothing to turn it around, not yet... the main model remains short this market...

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...