The Daily Market Forecast... Evidence Surprises

Friday’s Results: The suggested buy @ 43252.75 stopped out for a 5.75-point loss (per contract).

Quick Tip: Evidence Surprises

As the sayings go “words are cheap,” “actions speak louder than words.” Your strategy rules should be based on evidence and statistics not intuition and hunches.

In David Aronson’s “Evidence-Based Technical Analysis (Wiley Trading),” he finishes with a case study on how to perform data mining to find “edge” in your rules. The analysis was done one rule at a time. He didn’t connect two or more rules into complex sets. This made the study manageable.

What’s most interesting is that sometimes combining two rules that lose money can create a combination that does have edge!

It would be difficult to research many rule combinations without good software, like TradeStation has. Maybe that should be your next learning project. I can personally attest that a non-programmer can learn their EasyLanguage well enough in short order to start combining rules and hunting for edge.

Today’s Best S&P Turning Points

Sell 4291.50 stop 4296.50.

Buying is trickier. The Globex trade plan from last night suggested a buy @ 4220.50 stop 4115.50. It worked for a 31.25-point run already (see chart). If price opens above there in the cash market it would be worth another entry (confluence of evidence: Globex low). If not, consider a buy @ 4165.50 stop 4159.75.

Evidence derived from data mining is what finds these volume levels. Thank you Dr. Aronson!

Trade Fearlessly,

Mike Siewruk

P.S. If your strategies have proven edge and your results are spotty then you need to change your behavior. Click to learn how.