David Aloyan* Founder and managing member of Platinum Capital Management, LLC Hedge fund manager of the Macro Wave Investor Fund, LP Focus: Most noted as swing and position trader using combinations of both technical analysis and econometric analysis of the market securities. * Not employed by or affiliated with eSignal

I use eSignal in this example to establish buy/sell signals on the NASDAQ 100, tracking the stock "QQQ." I like the way I can use eSignal to set up a spread between the implied volatility of the NASDAQ 100 (which is tracked through the symbol "QQV") and the "QQQ" itself. I then plot a favorite indicator of mine, the MACD, on the chart. I am able to place a chart of the underlying "QQQ" right next to my spread chart using the same indicator and get confirmation of buy/sell signals.

When the trend of the spread is up, and the MACD is above the zero line, this is bearish for the "QQQ." When the trend of the spread is down, and the MACD is below the zero line, this is bullish for the "QQQ."

Look for a major change in trend of the spread that is also confirmed by the MACD indicator. Sell short the "QQQ" when the trend of the spread turns up and the MACD is above the zero line. Go long the "QQQ" when the trend of the spread turns down and the MACD falls below the zero line.