BestOnlineTrades Nails the Low in the Market Again BOT Signal Chronology

After today’s price action in the sp500, it appears once again that BestOnlineTrades dot com has nailed the low in the market with a good amount of precision.

We do not claim to be perfect here at BestOnlineTrades.com.  We do not pick perfect bottoms and perfect tops, but we know how to read the tape and follow the price action and the volume resulting in occasional powerful long or short signals in the sp500.  During the last few weeks I have barely followed the economic or fundamental news.  I do not watch CNBC or read Bloomberg any more.

I would say that my exposure to business fundamental news stories is almost non existent.  I follow the tape 99% and maybe occasionally get 1% exposure to macro fundamental news (sometimes it is just impossible to avoid, ie. driving in the car and hear news summaries between commercial breaks etc.).

In fact, I would say that my lack of exposure to fundamental news stories and lack of interest in them puts BestOnlineTrades at a very key competitive advantage relative to many other market timers and newsletter writers and other traders.  Why?  Because I am making my decisions based solely on the tape action and the volume.  Not just that, but also the interpretation of them minus any news bias.

I used to think that I was a pure technical trader but then I still cheated and watched CNBC and read Bloomberg news summaries a few times a day.  But now I have zero doubt that I only use a pure technical interpretation of the market. 

I recommend not following anyone who claims to use technical analysis but then spends a lot of time talking about fundamental news stories or their impact on the market.  That means that they have bias, even though they ‘talk technicals’.

It is surprising to me how many very experienced technical traders I have followed over the years who still make the mistake of dabbling in the macro fundamentals and then mix the interpretation with their technicals.  Even guys with 40+ years experience in the markets.

Market analysis is difficult enough as it is.  No reason to make it even more difficult with fundamental bias.

Ok enough.

Now a bit on BOT Signals that I have been issuing.

One of the reason’s why I started issuing BOT Short Long and Neutral signals is to avoid confusion with what I am saying in my postings versus what my actual true stance on the market is.

Way Back on May 11, 2011 I issued a BOT short signal.  That turned out to be an outstanding call.  Then on May 23, 2011 I said that the weekly sell was confirmed.

But then on May 25, 2011 I said in the title I was “getting cold feet on the short thesis”.. BUT I did not change the BOT signal back to long short or neutral!  I never changed it despite my language in the post that I was having some doubts…

So my point is that a BOT signal is supposed to take precedence over any other language I may use in postings in between.

On June 9, 2011 I went to BOT long at 1294.  This was a bad early signal for the long side.

Then went back to BOT short signal on June 10, 2011  at 1273.  So then a couple more false signals and then finally BOT long again on June 17, 2011 at 1276.

sp500botsignals20110621

The yellow shaded area shows the multiple whipsaw type signals.  I do not have an excuse for all those whipsaw signals other than to say that this is essentially me jockeying for the correct signal.  It is a cluster of multiple signals and for me they are essentially ‘probes’ or tests of the market with the objective of ultimately getting the correct signal.

The problem is that the defining data that makes up a solid more ‘staying power’ type of signal is not always available on demand.  In the case above I only got the most solid turn signal data on June 17, 2011 which is the last BOT long signal indicated in the chart.

I suppose one option is to indicate some signals as ‘Preliminary signals’ when I am using them more as a probe and not a concrete type signal.  That would have been appropriate for most of the whip saw signals shaded in yellow.

Anyway, I expect the BOT long signal to work for a while from here.  If we can close above 1294 today then it is a bullish sign.

However I expect 1330 to 1340 to be an important ‘proving ground’ for the market.  The bulls must prove themselves in that range, otherwise we could see dramatic southward type action again that re validates the bear thesis.

Posted in Market Timing, SP500
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5 comments on “BestOnlineTrades Nails the Low in the Market Again BOT Signal Chronology
  1. ed says:

    You did good on your last call. You deserve to take a bow

  2. geoff says:

    I strongly suggest that your readers take their own time (at some point) to review how your calls panned out. As I have commented here recently, in a short 6 days, your calls “cost” a cool 40+ SP points (June 9 – June 15th).

    Your latest call has been unchanged for about 4 days and has worked well.

    You “pat yourself on the back’ for blocking out fundamentals or even listening to financial newscasts or presumably the financial press. YET, while you delete these fundamentals drivers you adhere to the likes of a convicted crook Armstrong’s 8.6 year cycle (June 13th), and astrological readings (cardinal climax), and even the ancients Mayan End of Days.

    Sorry, i do not buy your “it”. I will take reading the WSJ, Barrons, IBD over the hocus pocus of astrology, Armstrong any day. You recently made the bald comment that almost every mutual or hedge fund has its own “in-house” astrologer. I asked for proof of such a claim.

    I look forward to your need posting on your “Cheetah System” and what it might recommend.

  3. Austin says:

    Strange how powerful the news is.. For that sole reason i dont even have tv service so i dont feel the need to watch the daily news… Now i am of sound mind and its been a good ride… 🙂

  4. RMT says:

    Yes give credit where credit is due- good call on the long side. While its true that technical rule, I wouldn’t discount the value of news. I was getting ready to buy RIMM the day before its earnings based on strong weekly support levels around 35. After looking at the “news” for Rimm, I decided not to buy and that decision saved me a lot of money. That stock got battered and even after today’s 10% bounce, its trading at 28.55 That’s why I’ve been very tentative about going long. There’s just too many real problems out there to feel comfortable going to bed with a long position. What happens if there is a Greece default overnight? Dow will open 250 points lower and you’ll get wiped out. Technicals are just a reflection of fundamentals and you can’t base your trades purely on technicals. TOm, while you were right about your bot call, you have to admit that your calls over the past week were quite atrocious. If you had followed your own advice, you would have lost a good deal of money, as mentioned above by Geoff. What I’m saying is that if you had traded off your advice by going long on your bot call one day and shoring the next day after issuing you bot short, you would have lost money. Those calls were based purely on technicals and they would have cost you money.

  5. Max says:

    “If we can close above 1294 today then it is a bullish sign.”

    Uhh, today’s action was yet another demonstration technicals don’t work in this market. Cash out ASAP.

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