Thinking Out Loud About Swing Trading -- 02/27/2024
Market Timing to reap rewards and control risk
THE NYMO/NYSI SWING TRADING STRATEGY
The NYMO is a short term market-breadth indicator based on the New York Stock Exchange Advance/Decline line, and the NYSI is its longer-term brother.
TAKEN TOGETHER, the two breadth indicators are the clearest indication of mass market psychology which is to say: market direction, up or down.
When the NYMO and NYSI rise, it is time to buy stocks, ETFs, calls, futures, whatever money-maker one likes best. When the NYMO and NYSI (especially) are falling, it is time to get out of the way of the falling knives.
There really is no reason or excuse for arguing.
02/27/2024—Before the open…
This is probably the worst time to bring this up but…
The NYSI turned down yesterday triggering a sell signal for today’s open. The indicator is in the midst of a month-long whipsaw which does not happen often but when it does it is confusing and uncertain and dangerous.
But at the same time it must be played because in the stock market, as has been said, the god of trading rewards “persistence, experience, and discipline, and absolutely nothing else.”
Today’s sell is after only two trading days up.
As a result most stocks and ETFs have been jearked around in this whipsaw but there are still winners in the grind.
The biggest winners, to grab the pitchfork out of the market haystack, are in the crypto stocks sector. Not crypto currencies themselves but in the stocks.
For instance, MARA, a crypto miner (whatever that means) is up in these two days 22%, and set top open up at least another 10% when according this this swing-trading system it must be sold. COIN, the biggest crypto currency exchange, is up 15% and set to gain another 7% on the open. It’s the same across the entire crypto stock sector.
These are the kind of gains that can be had on swing trades in NYSI swing trades, however short-lived.
And when the NYSI has a long rally, the results can be spectactular. See the left side of the chart below. The white histogram at the bottom of the chart and the white flags on the left and right axis record the gains in the stock swing for each $10,000 invested.