For Friday, February 10th

"A ship is safe in harbor, but that's not what ships are for."

* * * Benjamin Franklin

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: 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...

THE VERTICAL FUND is in real time since its inception on 9/30/16, however due to the ongoing confusion between the weekly and monthly performance updates, if you're interested in knowing the current performance history, then go to our Website at at https://www.theverticalfund .com/ and also ask me for a password for you to enter through the member's page on that Website... the BTIT optimized trading method is now included in the fund's trading strategy as of 1/4/17...

A BRIEF TUTORIAL OF ALL MAIN MODEL APPLICATIONS is at the bottom of every evening briefing, 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...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 1/24/17

A close below 2282.204 would turn the BTIT to neutral...

A close below 2267.99 would turn the BTIT to down...

BTIT Optimized Trade Instructions For Tomorrow:

For the BTIT optimized trader... you are now long from 2293.80 on a buy stop... for tomorrow, place a sell stop to go flat at 2280.20... the optimized strategy provides a predetermined limited risk with the optimal time for market participation...

For the BTIT optimized trader... place a sell stop to go short at 2267.90, and if filled place a buy stop to go flat at 2278.00... if filled and not stopped out, and the market finishes the day back inside the buy/sell price, then close it out on the close... there may be another opportunity next week for another long position optimized entry...

THE BTIT LONGER TERM TRADING STRATEGY

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 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 non optimized trade position: Long from 2269.40 as of 1/24/17 - - there are now 19 completed trades for a total gain of 445.10 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... you can take the large contract signal and then trade any SP based ETF on that signal...

TOMORROW'S VP SP TRADE STRATEGY:

For Friday, a close below 2301.20 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... enter a new short position with a close between 2296.20 and 2295.20... if filled, then place an exit stop to go flat at 2303.20... 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...

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... 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...

Rationale: A VP at 2301.11...

The last trade at this writing is at 2291.00 in the March...

The main model is now long the March SP from 2274.00 as of Monday, January 30th...

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...

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 - - 2316.82 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

TODAY'S LAST TRADED PRICE - - 2303.20

minor - - 2301.11

MAJOR - - 2295.24 and must close below that price on Friday, February 17th to confirm a new main model sell signal...

minor - - 2286.401

MAJOR - - 2251.17 and must close below that price on Friday, February 17th to confirm a new main model sell signal...

minor - - 2247.74
minor - - 2246.08

minor - - 2223.61
MAJOR - - 2221.206 and must close above that price on Monday, February 27th to confirm a new main model buy signal...

SVP - - none

MAJOR - - 2191.06 and must close above that price on Wednesday, March 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 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 February below 2119.36 would turn the MTI to neutral...

A monthly close for February 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...

The NT (Near Term) indicator

No meaningful movement in the NT indicator today...

THE FLAT LINE INDICATOR

All key lines are moving higher...

THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:
The LT momentum line turned upwards today, this is encouraging since it takes a lot for this momentum line to change direction...

The APRIL Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 1/17/17

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

A close below 1163.62 would turn the BTIT to down...

The main model is now short the April gold from 1243.20 as of Wednesday, February 8th...

Today's last trade is at 1232.50... that was a nice short entry we had yesterday...

TOMORROW'S GOLD TRADE STRATEGY:

For Friday, a close above 1243.10 in the April 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 and the optimized BTIT trading strategy were expressly designed for the SP market and for no other market at this time)

Rationale: A VP at 1243.102...

APRILGOLD VP PRICES

MAJOR - - 1448.501 and must close below that price on Thursday, April 27th to confirm a new main model sell signal...

minor - - 1360.43

MAJOR - - 1243.102 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

TODAY'S LAST TRADED PRICE - - 1232.50

minor - - 1226.33

minor - - 1208.98

SVP - - none

minor - - 1177.55
MAJOR - - 1162.18 and must close above that price on Friday, February 24th 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...

Flat Line Indicator (FLI) for GLD...

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

The flat line has now turn downward, this could be significant... this tends to indicate a downward trend beginning... let's see how far this goes...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line still continues higher, but you can clearly see that line bend today, the upward momentum has slowed...

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, February 9th

"A ship is safe in harbor, but that's not what ships are for."

* * * Benjamin Franklin

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: 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...

THE VERTICAL FUND is in real time since its inception on 9/30/16, however due to the ongoing confusion between the weekly and monthly performance updates, if you're interested in knowing the current performance history, then go to our Website at at https://www.theverticalfund .com/ and also ask me for a password for you to enter through the member's page on that Website... the BTIT optimized trading method is now included in the fund's trading strategy as of 1/4/17...

A BRIEF TUTORIAL OF ALL MAIN MODEL APPLICATIONS is at the bottom of every evening briefing, 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...

BROADER TERM INTERMEDIATE TREND BIAS: Continue reading

For Wednesday, February 8th

"A ship is safe in harbor, but that's not what ships are for."

* * * Benjamin Franklin

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: 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...

THE VERTICAL FUND is in real time since its inception on 9/30/16, however due to the ongoing confusion between the weekly and monthly performance updates, if you're interested in knowing the current performance history, then go to our Website at at https://www.theverticalfund.com/ and also ask me for a password for you to enter through the member's page on that Website... the BTIT optimized trading method is now included in the fund's trading strategy as of 1/4/17...

A BRIEF TUTORIAL OF ALL MAIN MODEL APPLICATIONS is at the bottom of every evening briefing, 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...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 1/24/17

A close below 2283.34 would turn the BTIT to neutral...

A close below 2265.27 would turn the BTIT to down...

BTIT Optimized Trade Instructions For Tomorrow:

SPECIAL TUESDAY MORNING OPTIMIZED UPDATE:

For the BTIT optimized trader... for Wednesday, place a buy stop to go long at 2295.10, and if filled place a sell stop to go flat at 2285.00... if filled and not stopped out, and the market finishes the day back inside the buy/sell price, then close it out on the close... the optimized strategy provides a predetermined limited risk with the optimal time for market participation...

For the BTIT optimized trader... place a sell stop to go short at 2265.20, and if filled place a buy stop to go flat at 2275.30... if filled and not stopped out, and the market finishes the day back inside the buy/sell price, then close it out on the close... there may be another opportunity next week for another long position optimized entry...

THE BTIT LONGER TERM TRADING STRATEGY

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 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 non optimized trade position: Long from 2269.40 as of 1/24/17 - - there are now 19 completed trades for a total gain of 445.10 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... you can take the large contract signal and then trade any SP based ETF on that signal...

TOMORROW'S VP SP TRADE STRATEGY:

For Wednesday, a close below 2286.50 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, almost short this trade but not quite... enter a new short position with a close between 2281.50 and 2280.50... if filled, then place an exit stop to go flat at 2296.60... 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 2286.401...

The last trade at this writing is at 2288.20 in the March...

The main model is now long the March SP from 2274.00 as of Monday, January 30th...

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...

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 - - 2316.82 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

minor - - 2301.11

MAJOR - - 2295.87 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...

MAJOR - - 2295.24 and must close below that price on Friday, February 17th to confirm a new main model sell signal...

TODAY'S LAST TRADED PRICE - - 2288.20

minor - - 2286.401

MAJOR - - 2282.34 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...

minor - - 2279.83

minor - - 2274.01

minor - - 2260.77

MAJOR - - 2251.17 and must close below that price on Friday, February 17th to confirm a new main model sell signal...

minor - - 2247.74
minor - - 2246.08
MAJOR - - 2228.64 and must close above that price on Wednesday, March 1st to confirm a new main model buy signal...

minor - - 2223.61
MAJOR - - 2223.53 and must close above that price on Wednesday, February 22nd to confirm a new main model buy signal...

SVP - - none

MAJOR - - 2191.06 and must close above that price on Wednesday, March 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 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...

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... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator

A modest down tick today, nothing special so far...

THE FLAT LINE INDICATOR

I realize I said this yesterday, but I'll say it again... this flat line graph really does look toppy...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:
This graph also looks toppy...

The APRIL Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 1/17/17

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

A close below 1163.62 would turn the BTIT to down...

The main model is now long the February gold from 1208.90 as of Tuesday, January 31st...

Today's last trade is at 1235.20...

TOMORROW'S GOLD TRADE STRATEGY:

For Wednesday, a close below 1223.40 in the April 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 and the optimized BTIT trading strategy were expressly designed for the SP market and for no other market at this time)

Rationale: A VP at 1226.33...

APRILGOLD VP PRICES

MAJOR - - 1448.501 and must close below that price on Thursday, April 27th to confirm a new main model sell signal...

minor - - 1360.43

MAJOR - - 1243.102 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

TODAY'S LAST TRADED PRICE - - 1235.20

minor - - 1226.33

minor - - 1208.98

SVP - - none

minor - - 1177.55
MAJOR - - 1162.18 and must close above that price on Friday, February 24th 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...

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 continues to look bullish... the momentum line continues higher...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The momentum line continues pushing higher is a steep climb...

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 Tuesday, February 7th

"I almost had a psychic girlfriend, but she left me before we met."

* * * Steven Wright

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: 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...
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 +1.14%, this will be updated each Monday in the evening briefing... the BTIT optimized trading method is now included in the fund's trading strategy as of 1/4/17...

A BRIEF TUTORIAL OF ALL MAIN MODEL APPLICATIONS is at the bottom of every evening briefing, 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...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 1/24/17

A close below 2283.34 would turn the BTIT to neutral...

A close below 2264.26 would turn the BTIT to down...

BTIT Optimized Trade Instructions For Tomorrow:

For the BTIT optimized trader, you are currently stopped flat... place a sell stop to go short at 2264.20, and if filled place a buy stop to go flat at 2274.30... if filled and not stopped out, and the market finishes the day back inside the buy/sell price, then close it out on the close... there may be another opportunity next week for another long position optimized entry...

sent out by email Feb 7 @ 6:40 am ET:
This is for the BTIT optimized trader...  for Tuesday, place a buy stop to go long at 2296.20, and if filled place a sell stop to go flat at 2286.10...  if filled and not stopped out, and the market finishes the day below 2296.20, then close it out on the close...  the optimized strategy provides a predetermined limited risk with the optimal time for market participation...

 

THE BTIT LONGER TERM TRADING STRATEGY

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 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 non optimized trade position: Long from 2269.40 as of 1/24/17 - - there are now 19 completed trades for a total gain of 445.10 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... you can take the large contract signal and then trade any SP based ETF on that signal...

TOMORROW'S VP SP TRADE STRATEGY:

For Tuesday, a close below 2286.50 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, almost short this trade but not quite... enter a new short position with a close between 2281.50 and 2280.50... if filled, then place an exit stop to go flat at 2296.60... 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 2286.401...

The last trade at this writing is at 2287.5 in the March...

The main model is now long the March SP from 2274.00 as of Monday, January 30th...

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...

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 - - 2316.82 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

minor - - 2301.11

MAJOR - - 2295.87 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...

MAJOR - - 2295.24 and must close below that price on Friday, February 17th to confirm a new main model sell signal...

TODAY'S LAST TRADED PRICE - - 2287.50

minor - - 2286.401

MAJOR - - 2282.34 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...

minor - - 2279.83

minor - - 2274.01

minor - - 2260.77

MAJOR - - 2251.17 and must close below that price on Friday, February 17th to confirm a new main model sell signal...

minor - - 2247.74
minor - - 2246.08
MAJOR - - 2228.64 and must close above that price on Wednesday, March 1st to confirm a new main model buy signal...

minor - - 2223.61
MAJOR - - 2223.53 and must close above that price on Wednesday, February 22nd to confirm a new main model buy signal...

SVP - - none

MAJOR - - 2191.06 and must close above that price on Wednesday, March 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 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...

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... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator

No visible movement today whatsoever...

THE FLAT LINE INDICATOR

It does look a bit toppy as of today, but no sell signal yet... the momentum line is still moving higher...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:
The LT momentum line is again moving lower...

The APRIL Gold futures NOW IN APRIL GOLD

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 1/17/17

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

A close below 1163.62 would turn the BTIT to down...

The main model is now long the February gold from 1208.90 as of Tuesday, January 31st...

Today's last trade is at 1236.60...

TOMORROW'S GOLD TRADE STRATEGY:

For Tuesday, a close below 1223.40 in the April 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 and the optimized BTIT trading strategy were expressly designed for the SP market and for no other market at this time)

Rationale: A VP at 1226.33...

APRILGOLD VP PRICES

MAJOR - - 1448.501 and must close below that price on Thursday, April 27th to confirm a new main model sell signal...

minor - - 1360.43

MAJOR - - 1243.102 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

TODAY'S LAST TRADED PRICE - - 1236.60

minor - - 1226.33

minor - - 1208.98

SVP - - none

minor - - 1177.55
MAJOR - - 1162.18 and must close above that price on Friday, February 24th 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...

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 is beginning to look like a serious rally and has plenty of room left to run...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line has gone from deeply oversold to modestly overbought, but shows no sign of hesitation as it continues moving higher... this looks like a seasonal rally with serious legs...

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 Monday, February 6th

"I almost had a psychic girlfriend, but she left me before we met."

* * * Steven Wright

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: 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...

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 +1.14%, this will be updated each Monday in the evening briefing... the BTIT optimized trading method is now included in the fund's trading strategy as of 1/4/17...

A BRIEF TUTORIAL OF ALL MAIN MODEL APPLICATIONS is at the bottom of every evening briefing, 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...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 1/24/17

A close below 2279.21 would turn the BTIT to neutral...

A close below 2263.48 would turn the BTIT to down...

BTIT Optimized Trade Instructions For Tomorrow:

For the BTIT optimized trader, you are currently stopped flat... place a sell stop to go short at 2263.40, and if filled place a buy stop to go flat at 2273.50... if filled and not stopped out, and the market finishes the day back inside the buy/sell price, then close it out on the close... there may be another opportunity next week for another long position optimized entry...

THE BTIT LONGER TERM TRADING STRATEGY

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 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 non optimized trade position: Long from 2269.40 as of 1/24/17 - - there are now 19 completed trades for a total gain of 445.10 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... you can take the large contract signal and then trade any SP based ETF on that signal...

TOMORROW'S VP SP TRADE STRATEGY:

For Monday, a close below 2274.10 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, almost short this trade but not quite... enter a new short position with a close between 2269.10 and 2268.10... if filled, then place an exit stop to go flat at 2276.10... 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 major VP at 2282.34...

The last trade at this writing is at 2290.7 in the March...

The main model is now long the March SP from 2274.00 as of Monday, January 30th...

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...

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 - - 2316.82 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

minor - - 2301.11

MAJOR - - 2295.87 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...

TODAY'S LAST TRADED PRICE - - 2290.70

MAJOR - - 2282.34 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...

minor - - 2279.83

minor - - 2274.01

minor - - 2260.77

MAJOR - - 2251.17 and must close below that price on Friday, February 17th to confirm a new main model sell signal...

minor - - 2247.74
minor - - 2246.08
MAJOR - - 2228.64 and must close above that price on Wednesday, March 1st to confirm a new main model buy signal...

minor - - 2223.61
MAJOR - - 2223.53 and must close above that price on Wednesday, February 22nd to confirm a new main model buy signal...

SVP - - none

MAJOR - - 2191.06 and must close above that price on Wednesday, March 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 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...

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... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator

A solid up spike in the NT indicator for today...

THE FLAT LINE INDICATOR

The market price is now above the anti price, this is positive, and the momentum line is also now moving higher... this is encouraging... maybe this market is again on the move...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:
The LT momentum line is now also moving higher... very good news, a higher follow through for this rally and we will be in very good shape...

The FEBRUARY Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 1/17/17

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

A close below 1163.62 would turn the BTIT to down...

The main model is now long the February gold from 1208.90 as of Tuesday, January 31st...

Today's last trade is at 1218.60...

TOMORROW'S GOLD TRADE STRATEGY:

For Monday, a close below 1209.00 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 and the optimized BTIT trading strategy were expressly designed for the SP market and for no other market at this time)

Rationale: A VP at 1208.98...

GOLD FEBRUARY VP PRICES

MAJOR - - 1448.501 and must close below that price on Thursday, April 27th to confirm a new main model sell signal...

minor - - 1360.43

MAJOR - - 1240.202 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

minor - - 1224.45

TODAY'S LAST TRADED PRICE - - 1218.60

minor - - 1208.98

SVP - - none

minor - - 1177.55
MAJOR - - 1162.18 and must close above that price on Friday, February 24th 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...

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 does look promising here although the momentum line is still moving lower for now......


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line is moving higher without hesitation... the longer term bias remains higher for 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...

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, February 3rd

"I almost had a psychic girlfriend, but she left me before we met."

* * * Steven Wright

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: 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...

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 +1.14%, this will be updated each Monday in the evening briefing... the BTIT optimized trading method is now included in the fund's trading strategy as of 1/4/17...

A BRIEF TUTORIAL OF ALL MAIN MODEL APPLICATIONS is at the bottom of every evening briefing, 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...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 1/24/17

A close below 2270.57 would turn the BTIT to neutral...

A close below 2266.27 would turn the BTIT to down...

BTIT Optimized Trade Instructions For Tomorrow:

For the BTIT optimized trader, you are currently stopped flat... place a sell stop to go short at 2266.20, and if filled place a buy stop to go flat at 2276.30... if filled and not stopped out, and the market finishes the day back inside the buy/sell price, then close it out on the close...

THE BTIT LONGER TERM TRADING STRATEGY

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 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 non optimized trade position: Long from 2269.40 as of 1/24/17 - - there are now 19 completed trades for a total gain of 445.10 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... you can take the large contract signal and then trade any SP based ETF on that signal...

TOMORROW'S VP SP TRADE STRATEGY:

For Friday, a close below 2274.10 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, almost short this trade but not quite... enter a new short position with a close between 2269.10 and 2268.10... if filled, then place an exit stop to go flat at 2276.10... 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 2274.01...

The last trade at this writing is at 2275.20 in the March...

The main model is now long the March SP from 2274.00 as of Monday, January 30th...

This is a very slippery market right now!!!

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...

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 - - 2295.87 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...

MAJOR - - 2282.34 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...
minor - - 2279.83
TODAY'S LAST TRADED PRICE - - 2275.20

minor - - 2274.01

minor - - 2247.74

minor - - 2260.77

MAJOR - - 2251.17 and must close below that price on Friday, February 17th to confirm a new main model sell signal...

minor - - 2246.08
MAJOR - - 2228.64 and must close above that price on Wednesday, March 1st to confirm a new main model buy signal...

minor - - 2223.61
MAJOR - - 2223.53 and must close above that price on Wednesday, February 22nd to confirm a new main model buy signal...

SVP - - none

MAJOR - - 2191.06 and must close above that price on Wednesday, March 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 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...

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... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator

Another day today of barely any movement at all...

THE FLAT LINE INDICATOR

This market has a negative bias since the momentum line is moving lower, but this market is drifting aimlessly right now...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:
This LT momentum line is also moving lower right now, a negative bias but not much more than that...

The FEBRUARY Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 1/17/17

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

A close below 1163.62 would turn the BTIT to down...

The main model is now long the February gold from 1208.90 as of Tuesday, January 31st...

Today's last trade is at 1214.70...

TOMORROW'S GOLD TRADE STRATEGY:

For Friday, a close below 1209.00 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 and the optimized BTIT trading strategy were expressly designed for the SP market and for no other market at this time)

Rationale: A VP at 1208.98...

GOLD FEBRUARY VP PRICES

MAJOR - - 1448.501 and must close below that price on Thursday, April 27th to confirm a new main model sell signal...

minor - - 1360.43

MAJOR - - 1240.202 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

minor - - 1224.45

TODAY'S LAST TRADED PRICE - - 1209.30

minor - - 1208.98

SVP - - none

minor - - 1177.55
MAJOR - - 1162.18 and must close above that price on Friday, February 24th 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...

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 is still below the anti price, but both are moving together rapidly... the momentum line is still moving lower but you can see it begin to bend...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

The LT momentum line shows a steady rise, this is encouraging...

The Main Model Formula

Continue reading

For Thursday, February 2nd

"Take my advice — I'm not using it."

* * * Anonymous

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: 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...

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 +1.01%, this will be updated each Monday in the evening briefing... the BTIT optimized trading method is now included in the fund's trading strategy as of 1/4/17...

A BRIEF TUTORIAL OF ALL MAIN MODEL APPLICATIONS is at the bottom of every evening briefing, 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...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 1/24/17

A close below 2274.51 (no typo error) would turn the BTIT to neutral...

A close below 2261.87 would turn the BTIT to down...

BTIT Optimized Trade Instructions For Tomorrow:

For the BTIT optimized trader, you are currently stopped flat... place a sell stop to go short at 2261.80, and if filled place a buy stop to go flat at 2271.90... if filled and not stopped out, and the market finishes the day back inside the buy/sell price, then close it out on the close...

THE BTIT LONGER TERM TRADING STRATEGY

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 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 non optimized trade position: Long from 2269.40 as of 1/24/17 - - there are now 19 completed trades for a total gain of 445.10 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... you can take the large contract signal and then trade any SP based ETF on that signal...

TOMORROW'S VP SP TRADE STRATEGY:

For Thursday, a close below 2274.10 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, almost short this trade but not quite... enter a new long position with a close between 2298.20 and 2299.20... if filled, then place an exit stop to go flat at 2291.20... 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 VP at 2274.01...

The last trade at this writing is at 2275.00 in the March...

The main model is now long the March SP from 2274.00 as of Monday, January 30th...

This market has been one wild ride!!! The main model went short this morning at 2282.40 and then reversed to the long side after dipping below 2274.00 and then closing above this price... this is a very slippery market right now!!!

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...

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 - - 2294.46 and must close below that price on Monday, February 6th to confirm a new main model sell signal...

MAJOR - - 2282.34 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...
minor - - 2279.83
TODAY'S LAST TRADED PRICE - - 2275.00

minor - - 2274.01

minor - - 2247.74

minor - - 2246.08
MAJOR - - 2228.64 and must close above that price on Wednesday, March 1st to confirm a new main model buy signal...

minor - - 2223.61
MAJOR - - 2223.53 and must close above that price on Wednesday, February 22nd to confirm a new main model buy signal...

SVP - - none

MAJOR - - 2191.06 and must close above that price on Wednesday, March 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 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...

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... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator

No movement at all in the NT indicator for today...

THE FLAT LINE INDICATOR

This flat line graph really does look toppy... the market price is below the anti price and the momentum line is moving lower... there's a bias for a downward trend right now...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:
The LT momentum line is also moving lower... all key lines are pointing lower right now...

The FEBRUARY Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 1/17/17

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

A close below 1163.62 would turn the BTIT to down...

The main model is now long the February gold from 1208.90 as of Tuesday, January 31st...

Today's last trade is at 1209.30...

TOMORROW'S GOLD TRADE STRATEGY:

For Thursday, a close below 1209.00 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 and the optimized BTIT trading strategy were expressly designed for the SP market and for no other market at this time)

Rationale: A VP at 1208.98...

GOLD FEBRUARY VP PRICES

MAJOR - - 1240.202 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

minor - - 1224.45

TODAY'S LAST TRADED PRICE - - 1209.30

minor - - 1208.98

SVP - - none

minor - - 1177.55
MAJOR - - 1162.18 and must close above that price on Friday, February 24th 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...

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 continues to look sloppy with the momentum line still moving lower... this market has always been heavy, even during the rallies...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

Curiously enough, the LT momentum line has turned upward once again... this is encouraging for the long position...

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 Wednesday, February 1st

"Take my advice — I'm not using it."

* * * Anonymous

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: 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...
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 +1.01%, this will be updated each Monday in the evening briefing... the BTIT optimized trading method is now included in the fund's trading strategy as of 1/4/17...

A BRIEF TUTORIAL OF ALL MAIN MODEL APPLICATIONS is at the bottom of every evening briefing, 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...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 1/24/17

A close below 2267.601 would turn the BTIT to neutral...

A close below 2258.72 would turn the BTIT to down...

BTIT Optimized Trade Instructions For Tomorrow:

For the BTIT optimized trader, you are currently stopped flat... reinstating a long position is optional depending on your risk tolerance, the optimized method has been stopped out twice... otherwise, remain flat and wait for the next signal... also, place a sell stop to go short at 2258.70, and if filled place a buy stop to go flat at 2268.80... if filled and not stopped out, and the market finishes the day back inside the buy/sell price, then close it out on the close...

THE BTIT LONGER TERM TRADING STRATEGY

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 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 non optimized trade position: Long from 2269.40 as of 1/24/17 - - there are now 19 completed trades for a total gain of 445.10 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... you can take the large contract signal and then trade any SP based ETF on that signal...

TOMORROW'S VP SP TRADE STRATEGY:

For Wednesday, a close below 2274.10 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, almost short this trade but not quite... enter a new long position with a close between 2298.20 and 2299.20... if filled, then place an exit stop to go flat at 2291.20... 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 VP at 2274.01...

The last trade at this writing is at 2275.50 in the March...

The main model is now long the March SP from 2274.00 as of Monday, January 30th...

This market has been one wild ride!!!

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...

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 - - 2294.46 and must close below that price on Monday, February 6th to confirm a new main model sell signal...

MAJOR - - 2282.34 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...
minor - - 2279.83
TODAY'S LAST TRADED PRICE - - 2275.70

minor - - 2274.01

minor - - 2247.74

minor - - 2246.08
MAJOR - - 2228.64 and must close above that price on Wednesday, March 1st to confirm a new main model buy signal...

minor - - 2223.61
MAJOR - - 2223.53 and must close above that price on Wednesday, February 22nd to confirm a new main model buy signal...

SVP - - none

MAJOR - - 2191.06 and must close above that price on Wednesday, March 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 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...

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... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator

A solid down spike today, this market is no longer overbought...

THE FLAT LINE INDICATOR

This flat line graph does look toppy and the momentum line is moving lower... caution here is advised while the main model is long...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:
The LT momentum line is also moving lower and is still in overbought territory... the broader picture shows this market to be heavy right now, the BTIT has been stopped out twice in two days... this is not strength...

The FEBRUARY Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 1/17/17

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

A close below 1163.62 would turn the BTIT to down...

The main model is now long the February gold from 1208.90 as of Tuesday, January 31st...

Today's last trade is at 1210.30...

TOMORROW'S GOLD TRADE STRATEGY:

For Wednesday, a close below 1208.90 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 and the optimized BTIT trading strategy were expressly designed for the SP market and for no other market at this time)

Rationale: A VP at 1208.98...

GOLD FEBRUARY VP PRICES

MAJOR - - 1240.202 and must close below that price on Friday, February 24th to confirm a new main model sell signal...

minor - - 1224.45

TODAY'S LAST TRADED PRICE - - 1210.30

SVP - - none

minor - - 1177.55
MAJOR - - 1162.18 and must close above that price on Friday, February 24th 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...

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...

It appears this market is again ready to rally, notice the flat line which I pointed out yesterday, it has spiked upwards at a level where many previous rallies have begun... and today we have a confirmed VP buy signal...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

Now drifting sideways, absolutely no direction here... we'll take the cue from the VP 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 Tuesday, January 31st

"Real knowledge is to know the extent of one's ignorance."

* * * Confucius

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: 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...
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 +1.01%, this will be updated each Monday in the evening briefing... the BTIT optimized trading method is now included in the fund's trading strategy as of 1/4/17...

A BRIEF TUTORIAL OF ALL MAIN MODEL APPLICATIONS is at the bottom of every evening briefing, 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...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 1/24/17

A close below 2269.33 would turn the BTIT to neutral...

A close below 2256.36 would turn the BTIT to down...

BTIT Optimized Trade Instructions For Tomorrow:

For the BTIT optimized trader, you are currently flat... reinstate the long position and place an exit stop for tomorrow at 2267.30... also, place a sell stop to go short at 2256.30, and if filled place a buy stop to go flat at 2266.40... if filled and not stopped out, and the market finishes the day back inside the buy/sell price, then close it out on the close...

THE BTIT LONGER TERM TRADING STRATEGY

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 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 non optimized trade position: Long from 2269.40 as of 1/24/17 - - there are now 19 completed trades for a total gain of 445.10 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... you can take the large contract signal and then trade any SP based ETF on that signal...

TOMORROW'S VP SP TRADE STRATEGY:

For Tuesday, a close below 2274.10 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, almost short this trade but not quite... enter a new long position with a close between 2298.20 and 2299.20... if filled, then place an exit stop to go flat at 2291.20... 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 VP at 2274.01...

The last trade at this writing is at 2275.50 in the March...

The main model is now long the March SP from 2274.000 as of Monday, January 30th...

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...

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 - - 2293.27 and must close below that price on Thursday, February 2nd to confirm a new main model sell signal...

MAJOR - - 2282.34 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...
minor - - 2278.89
TODAY'S LAST TRADED PRICE - - 2275.70

minor - - 2274.01

minor - - 2247.74

minor - - 2246.08
MAJOR - - 2228.64 and must close above that price on Wednesday, March 1st to confirm a new main model buy signal...

minor - - 2223.61
MAJOR - - 2223.53 and must close above that price on Wednesday, February 22nd to confirm a new main model buy signal...

SVP - - none

MAJOR - - 2191.06 and must close above that price on Wednesday, March 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 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...

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... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator

Nothing meaningful today for the NT indicator...

THE FLAT LINE INDICATOR

It does look toppy, but the market isn't breaking...

THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:
The same can be said for the LT momentum line, it looks toppy but the market isn't breaking down...

The FEBRUARY Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 1/17/17

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

A close below 1163.62 would turn the BTIT to down...

The main model is now short the February gold from 1217.10 as of Monday, January 23rd...

Today's close is 1194.20...

TOMORROW'S GOLD TRADE STRATEGY:

For Tuesday, a close above 1208.90 in the February Gold contract would confirm a new main model buy signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule and the optimized BTIT trading strategy were expressly designed for the SP market and for no other market at this time)

Rationale: A VP at 1208.98...

GOLD FEBRUARY VP PRICES

MAJOR - - 1217.08 and must close below that price on Monday, January 30th to confirm a new main model sell signal... IF THE MAIN MODEL IS ALREADY SHORT ON THIS DATE, THEN THIS WOULD SIMPLY BE ANOTHER CONFIRMATION OF THE SHORT POSITION...

minor - - 1208.98

TODAY'S LAST TRADED PRICE - - 1194.20

SVP - - none

minor - - 1174.33
MAJOR - - 1156.22 and must close above that price on Tuesday, February 14th 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...

Flat Line Indicator (FLI) for GLD...

THE FLAT LINE INDICATOR HAS BEEN SET FOR TRACKING GLD AND NOT THE FUTURES GOLD MARKET SINCE THE GLD ETF MARKET SHOWS A MORE LIQUID PATTERN...
ALL THE MAIN MODEL SIGNALS FOR THE GOLD FUTURES MARKET WILL STILL REMAIN THE SAME...
Looks like this market may begin a rally, but we'll need some VP confirmation...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

Now drifting sideways, absolutely no direction here... we'll take the cue from the VP 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 Monday, January 30th

"Real knowledge is to know the extent of one's ignorance."

* * * Confucius

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: 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...
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 -.09% this will be updated each Monday in the evening briefing... the BTIT optimized trading method is now included in the fund's trading strategy as of 1/4/17...

A BRIEF TUTORIAL OF ALL MAIN MODEL APPLICATIONS is at the bottom of every evening briefing, 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...

BROADER TERM INTERMEDIATE TREND BIAS: UP as of 1/24/17

A close below 2269.36 would turn the BTIT to neutral...

A close below 2254.58 would turn the BTIT to down...

BTIT Optimized Trade Instructions For Tomorrow:

For the BTIT optimized trader, you are currently long from 2269.40... place a sell stop to go flat at 2267.30... also, place a sell stop to go short at 2254.50, and if filled place a buy stop to go flat at 2264.60... if filled and not stopped out, and the market finishes the day back inside the buy/sell price, then close it out on the close...

THE BTIT LONGER TERM TRADING STRATEGY

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 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 non optimized trade position: Long from 2269.40 as of 1/24/17 - - there are now 19 completed trades for a total gain of 445.10 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... you can take the large contract signal and then trade any SP based ETF on that signal...

TOMORROW'S VP SP TRADE STRATEGY:

For Monday, a close above 2292.30 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, almost short this trade but not quite... enter a new long position with a close between 2297.30 and 2298.30... if filled, then place an exit stop to go flat at 2290.30... please familiarize yourself with the Hoban Rule entry strategy in case a signal is confirmed on a different VP mid day and how to enter a new position mid day using Rule 3, this easy entry strategy is explained in the tutorial at the bottom of each and every evening briefing... of course, any questions, please just ask...

Rationale: A major VP at 2292.304...

The last trade at this writing is at 2288.70 in the March...

The main model is now short the March SP from 2292.40 as of Friday, January 27th...

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...

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

TODAY'S LAST TRADED PRICE - - 2293.50
MAJOR - - 2292.304 and must close below that price on Wednesday, February 1st to confirm a new main model sell signal...

MAJOR - - 2289.347 and must close below that price on Friday, January 27th to confirm a new main model sell signal... IT IS NOT BY COINCIDENCE THAT THIS MARKET CLOSED AT A MAJOR VP ON THE SCHEDULED DEADLINE DUE DATE...
MAJOR - - 2282.34 and must close below that price on Tuesday, February 7th to confirm a new main model sell signal...
minor - - 2277.83
minor - - 2274.01

minor - - NONE

SVP - - none

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

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

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

THE 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...

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... if you would like to see the trade by trade score sheet for the Hoban Rule, just ask me for it and I will email it to you...

The NT (Near Term) indicator

A solid uptick today in the NT indicator...

THE FLAT LINE INDICATOR

The flat line indicator really does look a bit toppy here, the momentum line is again moving lower...


THE LT PRICE AND MOMENTUM GRAPH FOR THE SP:
Now that the flat line momentum line is moving lower, the LT line is moving higher... mixed signals for a market in search of direction...

The FEBRUARY Gold futures

BROADER TERM INTERMEDIATE TREND BIAS: NEUTRAL since 1/17/17

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

A close below 1163.62 would turn the BTIT to down...

The main model is now short the February gold from 1217.10 as of Monday, January 23rd...

Today's close is 1190.50...

TOMORROW'S GOLD TRADE STRATEGY:

For Monday, a close above 1208.90 in the February Gold contract would confirm a new main model buy signal... also, please review and consult daily with the VP Price Map for any and all main model mid day buy/sell revisions and updates... tomorrow's trade strategy is always subject to revision based on the VP Price Map, so it is extremely important to be familiar with this map listed below... (the Hoban Rule and the optimized BTIT trading strategy were expressly designed for the SP market and for no other market at this time)

Rationale: A VP at 1208.98...

GOLD FEBRUARY VP PRICES

MAJOR - - 1217.08 and must close below that price on Monday, January 30th to confirm a new main model sell signal... IF THE MAIN MODEL IS ALREADY SHORT ON THIS DATE, THEN THIS WOULD SIMPLY BE ANOTHER CONFIRMATION OF THE SHORT POSITION...

minor - - 1208.98

TODAY'S LAST TRADED PRICE - - 1190.50

SVP - - none

minor - - 1174.33
MAJOR - - 1156.22 and must close above that price on Tuesday, February 14th 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...

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...

We can see the momentum line continue lower, but if you look at the flat line itself, this market has reached a point at which the market price and the anti price are very far apart, far enough to expect to see both prices move closer together... this does not mean a rally although it could rally, it means that the market decline may slow a bit and allow the anti price to catch up with the market... it does suggest that a low of sorts also may be nearby possibly a bit lower than where it closed today...


THE LT PRICE AND MOMENTUM GRAPH FOR GOLD:

A warning is necessary since the LT momentum line is again moving lower... this suggests that this market downward trend is likely not over yet...

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...