Locking In Profits, Re-Assessing Path

In general, the theme of bulls versus bears hasn’t changed much – with the bullish perspective leading to another burst of winning trades.  In fact, the Bayesian signals are on another tear, going 56 for 62 (win rate of 90%) on its trades over the last three weeks.  

Further, over the last four months the signals have a win rate of 83.7% -- that means they've been correct on more than 8 out of 10 trade attempts. 

The Bayesian signals include two trade systems:  the BTS Alerts, focusing on 1x ETFs and based on our Bayesian Timing System, and the BEWTS Alerts, which combine Bayesian and Elliott Wave analysis, and focus on 3x Leveraged ETFs. The BTS Alerts have a typical hold time of 5-30 days, while the BEWTS Alerts are shorter-term, with typically a 1-3 day horizon. 

On December 17, the signals changed to neutral, as Path 2 discussed below witnessed a quick rate-of-change at the micro level.  As such, the Bayesian Timing System stayed true to its process, locked in profits, and went to the sidelines to re-assess.  

Here are the paths in the SPDR S&P 500 ETF (SPY): (1) [Probability=35%] SPY generally pushes higher to the 323-326 area before resting (with the continued potential to see the 330s), (2) [P=44%] SPY continues to chop around between 316-320 and finishes 2019 in this range, (3) [P=21%] SPY has a “noticeable” bearish leg from this 316-320 range targeting at least $10s lower.

In Metals, after batting 90% on its metals trades, the Bayesian Timing System has been patient waiting for a positive skew in risk vs. return.  On Dec 17, the metals signals went Long with at least another run at the GDX 28 level expected on this micro-path higher.  Above 28, then GDX is squarely staring down 29.50-30. 

Dec18AviBayesGDX
Dec18AviBayesGDX
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Dec18AviBayesUSO
Dec18AviBayesUSO
Dec18AviBayesSPX
Dec18AviBayesSPX
Luke Miller, who has developed a Bayesian timing system for trading the stock market, hosts two Bayesian timing premium services at ElliottWaveTrader.