This algorithm is purpose-built for the heartbeat of global capital: The US Stock Market.
The US market is a unique beast. There are no daily price limits, and it is dominated by High-Frequency Trading (HFT) and institutional algorithms. To survive and thrive here, a system must apply strict standards regarding Relative Strength (RS), Smart Money footprints, and Macroeconomic indicators.
Here is the US Market Edition of the logic, calibrated specifically for Wall Street dynamics.
🇺🇸 US Market Algo: Closing Price Betting System
(Institutional Momentum & Power Hour Strategy)
This system is a swing trading algorithm optimized for the US environment, where momentum persistence is strong. It focuses on Relative Strength, Institutional Footprints, and Macro Conditions, with a strict rule to enter trades only during the “Power Hour” when the daily trend is confirmed.
1. Stock Selection Logic
“Follow the Institutional Footprints, Avoid the Macro Headwinds.”
Step 1: Macro Risk Gate (Market Environment Filter)
Direction matters more than individual stock selection. We monitor Bond Yields and Volatility to decide whether to enter the market.
- Triggers:
- VIX (Volatility Index): Above 20 = Caution (Reduce position size). Above 30 = Red (Stop trading, go to Cash).
- US 10Y Yield: If it spikes (+3% variation) or breaks technical resistance, stop buying High-Growth Tech stocks.
- Trend Check: If the S&P 500 (SPY) falls below the 50-Day Moving Average (MA50), switch to ‘Bear Market Mode’ (No Long positions).
- Action:
- In a ‘Red’ state, hold 100% Cash or restrict trading to Inverse ETFs (SQQQ, SOXS) or Defensive Giants (KO, WMT, PG).
Step 2: Fundamental & SEC Risk Veto (The “Dilution” Check)
In the US swing game, your biggest enemies are Dilution and Insider Dumping. We block these using SEC data.
- Veto Conditions (Immediate Rejection):
- Dilution Risk: Reject if an SEC Form S-3 (Shelf Registration) was filed within the last month. This indicates potential offering/dilution.
- Earnings Shock: Reject if EPS/Revenue missed consensus by more than -20% or if Guidance was Cut.
- Insider Dumping: Reject if significant selling by C-Level executives (CEO, CFO) is detected via SEC Form 4 near technical lows.
Step 3: Technical Scoring & RS (Momentum Filter)
Based on William O’Neil’s CAN SLIM strategy, we target stocks stronger than the market.
- Relative Strength (RS Rating): Target stocks with an RS Score of 80+ (Top 20% relative to the S&P 500).
- VCP (Volatility Contraction Pattern): Scoring based on volatility contracting from left to right, with volume drying up.
- Pivot Point: Identifying key entry points where price moves sideways above the MA50 and volume decreases significantly (Dry Up).
Step 4: AI Catalyst Check
We analyze the real triggers moving the price, not just headlines.
- Target Sources: SEC 13F Filings, Earnings Call Transcripts, Analyst Notes.
- Key Catalysts:
- Earnings Surprise: Beat & Raise (Beating estimates + Raising guidance).
- Analyst Upgrade: ‘Buy’ ratings and Price Target hikes from major investment banks.
- Strategic News: FDA Approval, M&A, Activist Investor involvement.
2. Execution Logic
“Entry inside the Power Hour, Exit on Technical Breakdown.”
A. Entry Strategy
Avoid the “Morning Whipshaw” (9:30–10:30 AM). We strike when institutions finalize their positions.
- Timing: Enter during Power Hour (15:00 ~ 16:00 EST).
- Volume Confirmation: Today’s volume must be >120% of the 50-day average.
- Buy Stop Order: Place a Buy Stop order slightly above the current price. We don’t buy dips; we buy breakouts. We want the order to fill only if the momentum carries the price upward through resistance.
B. Exit Strategy
Since there are no price limits in the US, a Hard Stop is mandatory for survival.
- Stop Loss (Defense):
- Rule: Set an automatic Stop Loss order at -5% to -8% from the entry price.
- Technical Cut: Immediate exit if the price closes below the MA20 or breaks the previous Swing Low.
- Take Profit (Offense):
- Scale Out: Sell 50% of the position when profit reaches +10~15%.
- Trailing Stop: Let the remaining 50% ride the 10-Day Moving Average (MA10). Sell the rest only when the price closes below the MA10 (Trend Following).
💡 Insight: Why This Logic Works in the US
“Trend is Your Friend until the Bend at the End.”
This system leverages the “Momentum Persistence” unique to the US market. In Wall Street, the strongest moves happen when a stock with solid fundamentals breaks its 52-Week High.
Therefore, this algorithm ignores “bottom fishing.” It focuses purely on Trend Confirmation and Breakouts. By simply filtering out dilution risks via SEC filings, you can safely ride the wave of the top 10% Institutional Leaders.
Disclaimer: Educational Purpose Only
The information provided in this post, including the “Closing Price Betting System” and related algorithms, is for educational and informational purposes only. It does not constitute financial, investment, or trading advice.
- No Guarantees: Past performance, back-testing results, or theoretical scenarios do not guarantee future results. The US stock market involves significant risk, including the potential loss of principal.
- Do Your Own Research (DYOR): You are solely responsible for your own investment decisions. The author is not a registered financial advisor or broker. Please consult with a qualified financial professional before making any investment decisions.
- Risk Warning: Algorithmic and swing trading strategies involve risks such as market volatility, execution errors, and technical failures.
This content represents the author’s personal views and research as of the date of publication.