Trading the tramlines in the S&P 500

Here's a trade I made on the S%P 500, using tramlines to help me time things.

The US stock indexes have been trading in a very orderly uptrend since the August lows. In fact, volatility has been very subdued, as the S&P 500 has climbed from 1,040 level to the recent high of 1,225. That's a gain of almost 18%.

Before August, there were very wide swings, with the VIX readings much higher (VIX is a well-known measure of the volatility of the S&P). But following the 1,040 low, the market has been remarkably subdued, as you can see on the chart below.

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John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.