The Mad Momo Ratio

Over the years I slowly shifted away from using TOS/Prophet charts toward NinjaTrader as I am able to enjoy coding my tools in an object oriented fashion. Scripting languages have always been the bane of my existence and although they can be great for prototyping you will run into limitations pretty quickly if you’re trying to do anything a bit more sophisticated. In addition consumer oriented trading platforms also suffer from an inherent problem which is that you simply cannot rely on a data feed that is either filtered or buffered.

One of the few things I however appreciate about Prophet charts is the ability to quickly create ratio charts via a mathematical formula. Basically it’s the poor man’s Mathematica for data series. What is shown above is a special volatility brew of mine which has served me pretty well over the past year. I call it the Mad Momo Ratio and one of its components is the VIX – I have also thrown in a few other symbols for good measure (pun intended).

The lower pane shows us the SPX (I don’t know how to add a 2nd series to my shame) and I have pointed out all daily highs and their correlations with my mad momo ratio. As you can see a push toward the upper line on the BB(100) either meets or precedes the highs on the SPX in all but one case (5/22). The subs should expect seeing this chart more often in the future, so here’s another reason to join the club 😉

Volume profile – last chance for the bears (how often have I said that in the past few years?). We are now pushing back into the high participation range between ES 2050 and 2100 – 50 handles of pain for the grizzlies.

The short term panel shows the spoos in the process of establishing a base near the 100-hour SMA. We should never discard the possibility of a counter response but as of right now I’m not seeing any pertinent evidence. So I’m moving my stop below that stack of Net-Lines and let the chips fall where they may.

A few more setups for my intrepid subs:

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Cheers,