Good Friday afternoon, one and all, and welcome to the weekend. I don't know about you, but I know I'm ready for it. Before you get too deep into your weekend plans though... I don't know how many of you are already The Future Investor subscribers, but if you're not yet, you may want to go ahead and become a member. James Brumley has some pretty amazing stuff going on over there with his team, and if you're not getting that particular newsletter, you're missing out on opportunities. Case in point: Remember yesterday when we showed you the chart of the NYSE's advancers, decliners, up volume, down volume, and how that compares to the S&P 500's performance? [James makes those charts for us, but the way.] Well, as it turns out, he's turned the data into an outright trading system for TFI members. And, while past performance is no guarantee of future results -- even James acknowledges that -- past performance is certainly a pretty good indication of what the future is apt to hold as long as that past is based on reasonably re-producable results. And, from my conversation with Brumley today about what he showed The Future Investor members in Friday's edition, I'm pretty excited about what his system is going to be able to do in the future. First and foremost, don't ask me to tell you anymore about the system James is employing for The Future Investor. Even if I wanted to divulge it, I'm not sure I could fully explain it. Instead, I'll just show you the chart of the S&P 500 with the trading system applied. The up arrows are long entries and/or short exits. The down arrows are the exit of long trades and/or short entries. The lines in between are that trade's entry-to-exit path. Blue means it was profitable, and red means it wasn't. Yes, there's a short/bearish trade in place right now. It actually materialized a few days ago. Consider this a freebie for you today; I don't think James is going to let me show you the live version of this chart too much here in the free end-of-day newsletter. [And for those of you who are The Future Investor subscribers and already saw this chart, know that this version is the one that fixes what wasn't working quite right when we sent that newsletter out earlier today. About five minutes after delivering today's TFI, he noticed what amounts to a typo in the code needed to make this system work.] I should also note that The Future Investor subscribers were given a trade suggestion based on the current bearish cue. I can't tell you what it was either, but I can tell you it was intended to be a hedge, and it's worked out very well so far. I'll go ahead and add that James and I had something of a debate today after I asked him about his system.... though I'm not sure which side of the table either of was really on. Maybe both? The crux of my concern was the use of a hands-off system to dish out trading ideas. He and I both know enough to know there's no such thing as a "black box" in trading. He made a great point about the whole thing though, first explaining that it's just a tool - not a mandate. Sometimes a system such as this will show you something you may not have been looking for at the time. And, just because you get a buy or sell signal doesn't inherently mean you have to act on it. Other factors still have to be considered. On the flipside, his other point was equally brilliant even though it was in complete conflict with his first premise. That is, automated systems take the emotion out of trading, and impose a sort of built-in discipline. That's a big deal, because if you let fear and greed drive all of your trading, sooner or later it will come back to haunt you. And for what it's worth, it wouldn't be completely crazy to follow this system blindly. The equity curve -- the "what if you had used this strategy for the past X years" performance report -- is pretty darn compelling. In any case, as James said it today (and as you might want to tuck away for future reference), volume is a powerful tool simply because it tends to shift direction before the actual market does. As he put it, volume is often an indication of conviction. Stocks can coast for a few more days after traders have backed off from a trend. The strategy above finds that sweet spot between the flame-out and the reversal. The $64,000 question is, what does the long-term-oriented Future Investor team need with this kind of short-term trading strategy? I thought Brumley made a great point there too, accurately pointing out that the nickels and dimes the market drops can add up... if you go pick them up. He's still talking to long-termers with that particular newsletter, but if investors can tweak an entry there and take a profit at the right time there, those nickels and dimes add up. If you miss the daily charts of the S&P 500 we used to look at every single day here in the end-of-day newsletter, I'd suggest becoming a member of the TFI service. So far, it's been most akin to what you used to get here. As James promised about a month ago though, with the premium newsletter, he's been able to do a lot more higher-level research and trading-system development. The system above is just a taste of what he's been working on.