Sunday, November 11, 2018

Tick Tock ... Tick Tock ...

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


Last week, I outlined three scenarios for the mid-term election outcome and the most likely scenario (Scenario A Bad: Reps lose the House, keep the Senate but lose most of state gubernatorial and local races) occurred.  Initially indices rallied on the back of incorrect assessment that the election was a big victory for Republicans but later in the week after the dust settled, it became clear that the big winner was the Democratic Party.

I believe the recent sell-off is a warning of an event that could send indices much lower. I don't know what that event might be but my best guess is that it would be a political event and very likely related to Trump.


SGS advanced last week but it is still in SHORT territory, signalling that there is a good chance that the sell-off that started last Thursday continues.


Supports and resistances for SPX for the upcoming week are shown above. Last Friday,  SPX 200 D-SMA was tested and it held.  There is a good chance that the 200 D-SMA (2763) is breached and SPX trades and closes below it. Should that happen sometime early this week, SPX very likely sells-off to test its recent low (2603) later in the week.


My Plan

No change since last week.  I'm still expecting a panic selling event in very near future.  My plan is to close my long SPXU positions into that panic. 

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)


SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Sunday, November 4, 2018

Tick Tock ...

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


I have been trading full-time for over 20 years. Over the course of those years, I have noticed that the stock market starts to sell-off at least a few weeks before a major event that causes a significant (greater than 15%) price correction.  Below are some examples:
  • Jun 2015 Rise of ISIS & Terror in Europe/US - Indices started to sell-off in May 2015
  • 2008 Financial Meltdown - Indices started to sell-off in Nov 2007
  • Mar 2003 Iraq War - Indices started to sell-off in Oct 2002
  • 911 in 2001 - Indices started to sell-off in Aug 2001
  • 2000 Presidential Election Crisis - Indices started to sell-off massively in Sep 2000
  • Oct 1998 Long-Term Capital Debacle - Indies started to sell-off in Aug 1998
The recent sell-off just before the mid-term election is troubling. It is very likely predicting one of three scenarios listed below:
  • Scenario A (Bad): Reps lose the House, keep the Senate but lose most of state gubernatorial and local races.
  • Scenario B (Worse): Reps lose the House, the Senate, most of state gubernatorial, and local races.
  • Scenario C (Ugly): Chaos engulfs all close House, Senate,  and gubernatorial races.  Long lines due to equipment and computer breakdowns on the election day, prevent thousands from voting.  All close election results are contested by both parties.  Numerous federal law-suits are filled by both sides, contesting results and demanding recount.

SGS advanced last week but it is still deeply in SHORT territory, signalling that selling will resume and any counter trend rally would be short-lived.

Supports and resistances for SPX for the upcoming week are shown above. At the high of the day on Friday (2756), SPX had retraced back about 45% of its decline from it all-time high (2940) to its recent low last week (2603).  Retracements after a big sell-off are typically around 40% to 60%, so there is a good chance that the counter trend rally is done.  SPX very likely starts to sell-off again on Monday to test supports around SPX 2600, 2559, and possibly mid 2400's sometime this week. 


My Plan

Per my plan, I opened new long SPXU positions on Monday and Tuesday last week.  Looking back, I was a little too early and shorting via SPXU was not a good move.  SH and SDS are better choices to short SPY.  I expect a panic selling sometime later in the week.  My plan is to close my long SPXU positions into that panic. 

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)


SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Sunday, October 28, 2018

Mid-Term Election Is Critical

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


The upcoming mid-term election is critical. There is a good chance that Reps lose their majority in the House but if they also lose their majority in the Senate, indices would sell-off significantly and lose most of their gains since November 2016.  Recent events have certainly hurt Reps chances of retaining their control of the Congress.

The monthly chart of SPX is shown above.  As highlighted on the chart, in the last 25 years, SPX corrected significantly (15% or higher) when it had traded and closed below its Monthly Dynamic Trend Line (M-DTL, 13 M-EMA) for two consecutive months.  On Friday, SPX closed below its M-DTL (13 M-EMA) for the first time since January 2016.  If SPX continues to trade below its M-DTL and closes below it at the end of November, there would be a high probability that SPX sells-off substantially more to test support on its weekly chart around 2200.

SGS declined substantially last week, signaling that more selling is ahead.

Supports and resistances for SPX for the upcoming week are shown above.  Indices are oversold and chances are high that we see a rally on Monday and Tuesday this week. Those rallies would be good opportunities to open new short positions.

My Plan

I closed my SDS long positions on Friday.  My plan is to open new long SPXU positions sometime early this week as SPX resumes selling to test support at 2630 and beyond.

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)


SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Sunday, October 21, 2018

Selling Very Likely Accelerates

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


The rebound rally from short-term oversold levels on Tuesday and Wednesday ran into strong selling on Thursday and Friday.  SPX gained only half a point for the week.  That is quite bearish and I expect selling to resume on Monday and continue at a faster pace.

The upcoming mid-term election is critical. There is a good chance that Reps lose their majority in the House but if they also lose their majority in the Senate, indices would sell-off significantly and lose most of their gains since November 2016.



SGS rebound slightly last week but on Friday it turned down and put in a lower value.  SGS is now well entrenched in the "SHORT" territory.  That signals more selling ahead, or at best a sideways move for the major indices for the next couple of weeks.


Supports and resistances for SPX for the upcoming week are shown above.  Chances are high that the selling that started on Thursday continues this coming week.  For SPX a test of its TLS around 2630 is very likely.  A close below that level this week would signal a high likelihood of more selling to test February lows around 2530, probably by late October to early November.


My Plan

Per my plan I opened my first of two SDS long positions on Thursday.  My plan is to open my final long SDS position sometime early this week as SPX resumes selling to test 2710.

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)


SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice

Sunday, October 14, 2018

Market Predicts Defeat For Reps If Selling Continues

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


The monthly chart of SPX is shown above.  As highlighted in the chart, in the last 25 years, SPX corrected significantly (15% or higher) when it had traded and closed below its monthly Dynamic Trend Line (DTL, 13 M-EMA) for two consecutive months.

Last Thursday, SPX tested its DTL on its monthly chart at 2710.  If selling continues and SPX trades and closes below 2710 for October, there would be a good chance that selling continues for the rest of year, especially if Reps lose the Senate in the upcoming mid-term election. 


SGS declined substantially last week, signaling more selling ahead.

Supports and resistances for SPX for the upcoming week are shown above.  Chances are high that the rally that started late last Friday continues on Monday and Tuesday as indices retrace back 40% to 50% their losses.  For SPX, I expect to see 2820 to 2840 before selling resumes.

My Plan

Per my plan I closed my SDS long positions on Friday.  My plan is to open new long SDS positions sometime early this week as SPX resumes selling to test 2710.

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)


SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Sunday, October 7, 2018

SGS Market Timer Is SHORT

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


Changes are good that indices are on their way to test their late January and early February lows.  For SPX, a test of 2600 is likely.


SGS declined substantially last week, closed below -50 on Friday, and changed its status from NEUTRAL to SHORT.  


Supports and resistances for SPX for the upcoming week are shown above.  

My Plan

I opened my first of three long positions in SDS on Friday.  I'm planning to add to that position sometime this week.

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)

twitter
info@balancetrading.org

#balancetrading
#OrangeSwan

SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Sunday, September 30, 2018

SGS Market Timer Is Neutral

SGS  Market Timer Status:  NEUTRAL 
NEUTRAL as of the close of Friday Sep 28, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


Chances are good that indices start selling between now and the mid-term election on November 6.


SGS declined last week, closed below +50 on Friday, and changed its status from LONG to NEUTRAL.  More selling is very likely.


Supports and resistances for SPX for the upcoming week are shown above.  

My Plan
twitter
info@balancetrading.org

#balancetrading
#OrangeSwan

SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Sunday, September 23, 2018

Rally In Major Indices Is Not Sustainable

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Aug 24, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


Again, I am not sure where indices are heading. DJI and SPX put in new all-time high as the broader market deteriorated.  That's not healthy at all.


SGS declined last week but still in LONG territory.


Supports and resistances for SPX for the upcoming week are shown above.  

My Plan
twitter
info@balancetrading.org

#balancetrading
#OrangeSwan

SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Sunday, September 16, 2018

No Change Since Last Week

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Aug 24, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


No change since last week.


Except for Friday, SGS declined everyday last week but still in LONG territory.


My Plan
twitter
info@balancetrading.org

#balancetrading
#OrangeSwan

SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Sunday, September 9, 2018

Indices Weaken

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Aug 24, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


I am not sure where indices are heading.



SGS declined everyday last week but still in LONG territory.



Supports and resistances for SPX for the upcoming week are shown above.  

My Plan
twitter
info@balancetrading.org

#balancetrading
#OrangeSwan

SPX: S&P 500 Index    SMA: Simple Moving Average
DJI: Dow Jones Industrial Index    EMA: Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ASL: Active Support Line
OEX: S&P 100 Index    ARL: Active Resistance Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line
TLR: Trend Line Resistance   TLS: Trend Line Support

Disclaimer: The views expressed are provided for informational purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.