Swing Trading the Regression Trend Line:

I recently have been back testing a strategy to effectively manage swing trades based on turning points in the COT Reports and swings in the Slope of the 5 Day Regression Trend Line.

In the above chart, I have noted the days (black lines) where the COT Reports mark a peak pivot point when Managed Money sentiment shifts from positive to negative and switches from buying long positions to selling long positions. This is generally the point where I exit any long positions and start shorting the miners.

At this point, I plot the PSAR on my chart and look for the points where it flips from positive to negative. This usually confirms the COT Report pivot points.

From this point forward, I plot a 5 day Linear Regression Trend line on my chart and extend the line forward. Every day I update this line and roll it forward.

Five days after the PSAR flips and starts to pivot down, I plot a Flat Top/Bottom indicator using the PSAR dots as the endpoints of the downward sloping line, and the flat line set to the recent 5 day price low.

Every day I update the Linear Regression Line and the Flat Top/Bottom lines and wait for the Linear Regression trend to flatten and turn slightly positive. When this happens, I start reversing my shorts and start buying long positions.

The current trend is appears to be strongly negative, and may take a few weeks before it starts to flatten out and turn positive.
Trend Analysis

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