08/18/2011 Trading Signals

THE SHORT-TERM TREND IS DOWN, I HOLD BOTH LONG (TRAPPED) AND SHORT OVERNIGHT

The bottom line, I don’t see the bottom line yet.

Bullish biased toward tomorrow for 2 reasons:

• VIX rose more than 24%, buy at close today and sell tomorrow at close, you have 88% chances for the last 2,000 trading days.

• 44 out 68 times (65%) a green day the next day after a Major Distribution Day.

As I was worried yesterday, the long position initiated by Cobra Impulse System yesterday was stopped out today with losses. I’ll review the algorithm to see if I could prevent such a losses in the future.

MECHANICAL TRADING SIGNALS

SPY SYSTEM ENTRY STOP LOSS Current 2*ATR(10) value: SSO=14%; SDS=12%; UPRO=23%;SPXU=18% Non-Stop 08/02 S N/A Short is for aggressive traders only. Cobra Impulse 08/17 L 1.7*ATR(10) *Stopped out of long position with loss.

DEMO ACCOUNT FOR SHORT-TERM MODEL (Attention: This is not part of Cobra Impulse System)

TICKER Entry Date Entry Share Stop Loss Exit Date Exit Profit Comment SDS 08/18/2011 $25.52 100 $22.46   SSO 08/17/2011 $42.60 50 $37.49 Not a new setup, just a buyback of 08/16 longs. SSO 08/16/2011 $42.82 50 $35.54 08/17/2011 $43.40 29.00   SSO 08/15/2011 $42.86 50 $35.14 08/15/2011 $43.26 20.00   SSO 08/11/2011 $40.16 50 $32.93 08/11/2011 $41.53 68.50 Position too small to split, could hold overnight. SDS 08/08/2011 $25.94 100 $23.61 08/08/2011 $26.58 64.00 Had to leave earlier today so sold too soon. SDS 08/04/2011 $23.13 100 $21.51 08/09/2011 $28.35 522.00   SDS 08/04/2011 $23.13 100 $21.51 08/04/2011 $24.00 87.00   LAST   2248.50   SUM   3030.00

$300 max loss allowed per trade. For fun only. LAST = Year to the last month balance. SUM = Year to date realized gains/losses.