Monday, October 25, 2010

SPX Weekly

The SPX_Weekly charts below have embedded upon them low and high volatility trend models.  The volatility settings determine how sensitive the trend model is to price volatility.  Higher volatility settings react to smaller moves in price to reverse trend, whereas the lower volatility settings require more price movement before reversing. 


SPX Low Volatility Trend Model


SPX High Volatility Trend Model


Both trend models do a fine job of capturing major trends in the market.  The trade off is better entries/exits from the higher settings, but better accuracy and less trading from the lower settings.  In either case, the trend models add a tradable big picture advantage.