Saturday, August 8, 2020

Channel Within Channel

 SGS  Market Timer Status:  LONG 


SPX is trading in a tight rising channel which is inside of a wider rising channel.  There is a good chance that SPX breaks out its smaller trading channel and moves higher to test the upper line of its wider trading channel around 3600 sometime this month.
SGS is long and heading higher, bullish.

Support and resistance levels for SPX for next week are shown above.

My Plan

Per my plan, I opened tow new positions in SPY and QQQ  on Tuesday.  I'm planning to open new long positions in SLV (5%), IWM (20%), and SPY (20%) sometime early this coming week.


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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, August 2, 2020

Indices Are Coiled Up To Strike Higher Or Lower

SGS  Market Timer Status:  LONG 
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


Four of seven "FANGMAN" stocks (FB, AMZN, NLFX, GOOGL, MSFT, AAPL, and NVDA) reported last Thursday after close, but the market response on Friday was generally disappointing. If a significant sell-off starts, FANGMAN and other NDX constituents would correct significantly.

For the last two weeks, SPX has been trading in an 80 point range (3200 - 3280).  SPX has coiled up and it's ready to strike out of its trading range (green rectangle) in either up or down direction. 

SGS is long but starting to head lower, bearish.


Support and resistance levels for SPX for this week are shown above.  


My Plan

Per my plan, I opened a small long position in GLD last Friday.  I also opened an even smaller long position in GBTC. 

I don't know which way indices are going to break out of their recent trading range.  Best is to let them make their first move and then follow.   My plan is to buy either QQQ or PSQ depending on the direction of indices out of their recent trading range.



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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, July 26, 2020

FANGMAN Makes Or Breaks Indices

SGS  Market Timer Status:  LONG 
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

As promised in my last post, I'm doing a new post because I think there is a good chance that indices start a sell-off in the next couple of weeks to retrace back between 40% to 60% of their gains since their March lows.

Four of seven "FANGMAN" stocks (FB, AMZN, NLFX, GOOGL, MSFT, AAPL, and NVDA) are reporting their Q2 earnings and outlook on Wednesday and Thursday. Last week MSFT and NFLX reported and sold off. NVDA is to report in late August. If FB, AMZN, GOOGL, and AAPL follow MSFT and NFLX, there is a good chance that NDX sells off significantly.


Last Thursday and Friday SPX sold off and closed right on its uptrend line (TUL) that has supported its rally since its March low (2191).  There is a good chance that SPX trades sideways this week in a tight range (green circle). How SPX breaks out of its trading range this week is critical and would indicate the high likelihood that SPX continuing to trade in that direction.  In other words, if SPX breaks out of the green circle to the up side, it would continue advancing to challenge its recent highs and its all-time high (3393).  If SPX breaks out of the green circle to the down side; however, it would very likely continue its sell-off to test its 50 and 200 D-SMA's.


SGS is still long but starting to head lower, bearish.


Support and resistance levels for SPX for this week are shown above.  If a sell-off starts this week, there would be a good chance that, in the next couple of months, SPX retraces back between 40% to 60% of its gain since its March low (2191).


My Plan

I'm in cash but planning to buy GLD (20% of  capital) sometime this week.  I will send a tweet out  when I'm about to do it.


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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, May 31, 2020

When Technical Analysis Fails

SGS  Market Timer Status:  LONG 
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

Major indices are only a few percent away from their all-time highs while all macro economic data are at historic near depression lows. I have no idea how long this divergence is going to continue but under these conditions technical analysis fails to predict the future direction of indices.

My Plan

I am going to take the summer off from trading and resume blogging after labor day. If something major happens between now and then, I would post my thoughts and plans.

I'm in cash in my long-term accounts and planning to stay on the side line.  Have a great summer :).

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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.

Monday, May 25, 2020

Critical Week Is Ahead

SGS  Market Timer Status:  LONG 
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

sgs-st Market Timer Status: 
 long 

sgs-st is a Short-Term (hours to days) Timer


SPX is advancing to back-test its 200 D-SMA. A weekly close above 3000 would be bullish. Also a monthly close below its M-DTL (13 M-EMA) around 2930 would be extremely bearish.

SGS continued its advance last week and on Friday changed its status from NEUTRAL to LONG.


Support and resistance levels for SPX for this week are shown above.


My Plan


I'm in cash and planning to stay on the side line this week.


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opader@gmail.com


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, May 10, 2020

Selling Likely Resumes

SGS  Market Timer Status:  NEUTRAL 
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

sgs-st Market Timer Status: 
 long 

sgs-st is a Short-Term (hours to days) Timer


Last week in my post, I showed that SPX is in a back-testing stage of its Monthly Dynamic Trend Line (M-DTL, Monthly 13 EMA). Last Friday, SPX closed right on its M-DTL. If indices are to sell-off again to test their March lows, then that selling should start this week.

SGS continued its advance last week and its value on Friday calculated to by +21.  The status of SGS remains NEUTRAL.


Support and resistance levels for SPX for this week are shown above.


My Plan
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opader@gmail.com


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, May 3, 2020

The Second And Final Leg

SGS  Market Timer Status:  NEUTRAL 
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

sgs-st Market Timer Status: 
 short 

sgs-st is a Short-Term (hours to days) Timer


As shown on the SPX monthly chart above, both "Sub-Prime" and "Dot-Com" crashes had two two distinct down-legs. During the first down-leg (large red arrows on the chart), SPX crashed through its M-DTL and closed below it in a swift move from its all-time high at the time. Then SPX rallied, in a powerful counter-rend move, back-tested its M-DTL and closed below it to finish the first down-leg of the correction. The second down-leg of the correction for both "Sub-Prime" and "Doc-Com" started after SPX failed to close above its M-DTL (blue arrows on the chart) and continued for months until the correction was completed.

For the current on-going correction, there is a good chance that SPX finished its first down-leg and started on its second down-leg last Thursday when it failed to close above its M-DTL. Assuming SPX follows the same pattern as the two previous major corrections, SPX very likely bottoms somewhere between 1800 to 1700 sometime in early to mid 2021. I think at that point, maybe an effective vaccine along with a massive fiscal stimulus to rebuilt the infrastructure, will start a new bull leg in equity markets under a new administration.

There is of course another possibility that SPX continues its counter-trend rally on the back of unlimited monetary stimulus by the Fed.  Where SPX and equity markets end up in that case is beyond my understanding and past experience.

SGS continued its advance last week and on Friday closed above -50.  SGS changed its status from SHORT to NEUTRAL.


Support and resistance levels for SPX for this week are shown above.


My Plan

sgs-st went short last Thursday and I moved 100% into SPXU.  Now with SGS turning NEUTRAL on Friday, my plan is to close 1/3 of my SPXU position on Monday.  See table below:







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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, April 26, 2020

Don't Know Where Indices Are Heading

SGS  Market Timer Status:  SHORT 
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

sgs-st Market Timer Status: 
 Neutral 

making changes to sgs-st
sgs-st is a Short-Term (hours to days) Timer

I don't know where indices are heading.

SGS continued to advance higher everyday last week, signaling that a bottom was reached on March 23 for major US indices. 

Support and resistance levels for SPX for this week are shown above.  


My Plan

On Friday I closed my SDS positions. I don't where indices are heading. I'm going to remain on the sideline for now.


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opader@gmail.com


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, April 19, 2020

Counter-Trend Rally Is Very Likely Complete

SGS  Market Timer Status:  SHORT 
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

sgs-st Market Timer Status: 
 neutral 

Pegging issue still not fully resolved.
sgs-st is a Short-Term (hours to days) Timer

Since 2000, excluding the current bear market, there were four bear markets during which SPX corrected at least 20%. In everyone of those four corrections, the first down-leg corrected about 15% in seven weeks. Following the first down-leg, the first counter-trend rally retraced the first down-leg by 60% over the course of four weeks. After the initial down-leg and its counter-trend rally were completed, the correction resumed at a much lower pace; and on average, SPX corrected another 22% during the following nine months.

For the current correction, the first down-leg corrected a whopping 35% in seven weeks. So far the counter-trend rally from the recent low (2191 on March 23) has retraced the first down-leg by 60% in the last four weeks. Assuming the current correction continues to follow the same pattern as the last four bear market corrections, it is very likely that the first counter-trend rally of the current correction was completed last Friday. Selling very likely resumes soon, at a much lower pace, for possibly another 22% over the course of next nine months.

SGS continued to advance higher everyday last week, signaling that a bottom was reached on March 23 for major US indices. 


Support and resistance levels for SPX for this week are shown above.  


My Plan

Per my plan I added to my SDS position on Thursday and Friday last week.  


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opader@gmail.com


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.