Intra-Day Update: Technical Difficulties

UPDATE 12:35pm EST: Boy, I have been spinning like a top in the last 24 hours. As most of you know, yesterday afternoon I suspected that there was a Zero bug, so I started going through my code. Four hours later I finally realized that it wasn’t the Zero that had a bug but &^%#@* thinkscript (which is the scripting language I use to implement the sucker). Turns out that by giving the signal line red/green colors it somehow got shifted to the left by one tick – which seems to be a problem that has been known for a while (thank you TOS!!). Anyway, I was able to fix the problem by removing the pretty colors and also added a green and red line, which you should ignore for now.

Facts:

• Yesterday’s indicator signaled a short VTA at 2:00pm EST – the SPX was at 897 at that time.
• Today’s indicator signaled a long VTA at 10:00am EST – the SPX was at 893 at that time.
• The result were futures profits of 4 ES points. 4 x $50 = $200. Which is exactly the profits I banked this morning.
• If we would have traded with the (now fixed) 3.1 version of the ZI, we would have gotten a short VTA at 904. Had we closed that one out today (904 – 893 = 11 ES points) I would have made $550.- in my futures account. I know woulda-shoulda-coulda. But be aware how we just shifted from slightly profitable to nicely profitable in a whipsaw market.
• Had you gone long at the 10:00am VTA you would have made 3 ES points (another $150) by the time of this writing. Was a lot more earlier but this is how it stands right now.
• The new indicator should stay in place for a while. I did not intend to change anything but when I see a blatant bug (again, not my fault – plus some other member already confirmed that fact) I need to take action.
• I will now spend a few hours going through the case study which, due to the slight shift in the indicator, needs to be recalculated. This stuff takes a lot of time.
• If we get a VTA I encourage you to keep at least paper trading it. I think my first two points speak to the fact that the indicator is working and that by following the rules you can be profitable.
• Stick with the rules I originally posted. The green/red lines don’t matter right now and Berk and I will explain them in the near future. For now just ignore them.
• Finally, I would recommend trading either the futures or SPY options as the bid/ask spreads in high beta stock options probably would have killed your profits this morning. It’s also much easier to get in/out – I’m starting to think that this is the most reliable and easiest way to play. The advantage you get by trading a specific stock option is thwarted over time by the money you lose in whipsaw scalps courtesy of our friendly market makers.

I will pop in/out as things transpire. In the meantime I will continue working on the case study and slowly update the tutorial. If there are update problems with the feed, please let me know immediately by posting a comment on the blog. I’m working with my hosting provider to resolve the issue.

Thank you for your continued support and patience. Things are getting more stable now and I do appreciate the growing interest. Which is why I am working extra hard to finalize all the variables – nobody likes to trade with a changing indicator. I promise you that this will be the last version for quite a while – unless of course I run into another TOS bug.

UPDATE 2:28pm EST: I am still working on the new case study. Right now we keep getting breaches to the downside but they disappaer again. I would be patient here and wait for confirmation before going short. Maybe snacking on the VTA is yet another approach worth considering. And adding positions as the line stays below or goes lower. I think this might actually work out well and could also be used to scale out/into trades. Any thoughts on that?

UPDATE 3:50pm EST: Uneventful day – don’t we hate those normal days? I don’t think any of us can ever go back to the way the markets were just a year ago 😉 If you took the long VTA this morning I would probably take profits. Hey, 6 ES points is $300 – better than a kick in the shin! There is no conviction either way IMHO and little reason to expose oneself to overnight surprises.