Saturday, April 15, 2017

A Volatile Week Is Very Likely Ahead

SGS  Market Timer Status:  LONG 
LONG as of close of November 11, 2016
SGS is a Long-Term (weeks to months) Timer

SGS ticked lower for the week, signaling more selling is very likely in the coming week.  As of the close of Friday, all major indices (DJI, DJT, NAZ, RUT and SPX) are trading below their 50 D-SMA's. That's bearish and signals more selling ahead.

My Outlook

Bears are firmly in charge now and will push indices much lower next week.  I expect SPX to test price support at 2300 and its PUL-2 around 2260.  A close below PUL-2 on weekly basis would signal significant selling ahead.

My Plan

No change since last week, I am going to follow SGS and start buying SPY if SGS starts to uptick and closes above its DTL. If SGS continues lower and crosses its zero line and turns "SHORT", I would start opening short positions in SPX by buying SH.



SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line

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.

Saturday, April 8, 2017

Selling Continues

SGS  Market Timer Status:  LONG 
LONG as of close of November 11, 2016
SGS is a Long-Term (weeks to months) Timer

SGS ticked lower for the week, signaling more selling is very likely in the coming week.

My Outlook

Bearish Case (70%): Chance are high that SPX tests its TUL (shown in pink) and W-DTL this coming week.  A daily close for SPX below 2345 would signal more selling and very likely test of price support at 2275 and PUL-2 around 2255.

Bullish Case (30%): If SPX starts trading and closes above its PDL-0, then chances would be good that SPX moves higher to challenge its recent highs.

My Plan

No change since last week, I am going to follow SGS and start buying SPY if SGS starts to uptick and closes above its DTL. If SGS continues lower and crosses its zero line and turns "SHORT", I would start opening short positions in SPX by buying SH.



SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line

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.

Saturday, April 1, 2017

Indecision Is Very Likely Over

SGS  Market Timer Status:  LONG 
LONG as of close of November 11, 2016
SGS is a Long-Term (weeks to months) Timer

SGS remained unchanged for the week, signaling that Big Money is still indecisive.  Chances are good, however, that Big Money would be forced to make a decision this coming week.  SGS would tick significantly higher or lower depending on what Big Money decides to do.

If Trump's Russia-gate starts to snowball, then we should see a sell-off, SPX testing and failing support at its TUL line, SGS crossing its zero line and turning "SHORT".

My Outlook

If Russia-gate develops legs, then chances would be high that SPX sells off to test its PUL-2 around 2250 and possibly its 50 W-SMA around 2200. Otherwise, indices would start pushing higher to challenge their recent all-time highs.

My Plan

No change since last week, I am going to follow SGS and start buying SPY if SGS starts to uptick and closes above its DTL. If SGS continues lower and crosses its zero line and turns "SHORT", I would start opening short positions in SPX by buying SH.



SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line

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.

Saturday, March 25, 2017

Market On The Razor's Edge

SGS  Market Timer Status:  LONG 
LONG as of close of November 11, 2016
SGS is a Long-Term (weeks to months) Timer

SGS ticked lower for the week, signaling more selling head.  It seems, however, that everything including financial markets, is sitting on the razor's edge and could easily fall on one side or the other.

If Trump's Russiagate starts to snowball, then we should see SGS cross its zero line and turn "SHORT". In that case, a good chunk (7% to 10%) of fluff would come out of major indices.

Short-Term (days to weeks) Outlook

SPX broke out of its narrow trading range to the downside last week.  Shorter term, chances are good that selling picks up momentum this coming week and SPX tests its 50 D-SMA around 2330 and possibly its Old-ADL around 2300 to 2260 depending on how aggressive selling becomes. 

Long-Term (weeks to months) Outlook

If Russiagate develops legs, then chances are hight that SPX sells off to test its PUL-2 around 2230 and possibly its 50 W-SMA around 2200. 

My Plan

No change since last week, I am going to follow SGS and start buying SPY if SGS starts to uptick and closes above its DTL. If SGS continues lower and crosses its zero line and turns "SHORT", I would start opening short positions in SPX by buying SH.



SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line


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, March 19, 2017

The Calm Before The Storm

SGS  Market Timer Status:  LONG 
LONG as of close of November 11, 2016
SGS is a Long-Term (weeks to months) Timer

SGS ticked higher for the third day in a row, that's bullish. If SGS closes above its DTL (shown in red), I would buy my first buy in my long portfolio (SPY).

Short-Term (days to weeks) Outlook

Shorter term, SPX is range-bound by its trendlines.  There is an excellent chance, however, that SPX exits its relatively narrow trading range soon.  I have no idea which way SPX breaks out.  I'm letting SPX make the first move and then I'll follow. 

Long-Term (weeks to months) Outlook

We're experiencing the calm before the storm.  I don't know which way SPX is going to breakout.  Patience.

My Plan

I am going to follow SGS and start buying SPY if SGS starts to uptick and closes above its DTL. If SGS reverses and starts to go lower, cross zero line and turns short, I would start opening short positions in SPX by buying SH.



SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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, March 12, 2017

Selling Continues

SGS  Market Timer Status:  LONG 
LONG as of close of November 11, 2016
SGS is a Long-Term (weeks to months) Timer


SGS continued to put in lower highs last week for the second week in a row since SPX put in a fresh all-time high (2400.98). If selling accelerates, SGS would cross zero line and turn SHORT sometime this week.

Short-Term (days to weeks) Outlook



Shorter term, despite selling since March 1, indices are still overbought.  Chances are good that SPX continues going lower this coming week and tests of its PUL-3 around 2350.

Long-Term (weeks to months) Outlook


Longer term, chances are good that SPX continues to sell-off and test its AUL around 2340 sometime this coming week and then its W-DTL around 2310.

My Plan

I am going to follow SGS and start buying SPY if SGS starts to uptick and closes above its ADL. If SGS continues to go lower and turns short, I would start opening short positions in SPX by buying SH.



SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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, March 5, 2017

Selling Very Likely Continues

SGS  Market Timer Status:  LONG 
LONG as of close of November 11, 2016
SGS is a Long-Term (weeks to months) Timer



SGS continued to put in lower highs last week, signaling that the sell-off that started last Thursday very likely continues.

Two things could happen now: 

  1. SGS continues going lower until it crosses and closes below zero line. A close below zero line would turn SGS from LONG to SHORT.
  2. SGS turns back up and closes above its DTL and ADL which would signal that the correction is very likely over.

Short-Term (hours to days) Outlook


Shorter term, SPX is overbought.  Chances are good that SPX continues going lower this coming week and tests of its D-DLT around 2360 and AUL around 2350.

Long-Term (weeks to months) Outlook


Longer term, chances are good that SPX continues to sell-off and test its AUL around 2340 sometime this coming week and then its W-DTL around 2310.

I think if the Congress enacts Trump tax plan, military spending and repeals ACA then we should see a significant rise in indices despite rising interest rates; however, amid current controversies and scandals surrounding the Trump Administration, chances are low that any of that comes to fruition.  Hence, chances of additional gains in indices are low.

My Plan

I am going to follow SGS and start buying SPY if SGS starts to uptick and closes above its ADL. If SGS continues to go lower and turns short, I would start opening short position in SPX by buying SH.

Current Long-Term Portfolio (2017)
Past Long-Term Portfolios (2008-2016)


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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, February 26, 2017

Indices Are Overbought - A Correction Is Coming

SGS  Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS is a Long-Term (weeks to months) Timer

 

SGS timer continued to put in lower values last week as SPX marched higher.  The divergence exhibited by SGS points to a high likelihood of a sell-off this coming week.  I'm waiting to see if SGS goes lower early and possibly crosses its D-DTL and closes below it.  That would be bearish and it would be prudent to close long positions.

Short-Term (hours to days) Outlook



Shorter term, SPX is overbought.  Chances are good that we see a sell-off this coming week and possibly a test of D-DLT around 2350 and AUL around 2330.

Long-Term (weeks to months) Outlook



Longer term, chances are good for SPX to sell-off to tests its AUL around 2320 sometime this coming week and then continues its sell-off to test its W-DTL around 2300.

My Plan


I'm still waiting for a minor correction, 3% to 5%.  My plan is to do my first buy of three in SPY in that correction unless SGS drops dramatically in the sell-off.

Current Long-Term Portfolio (2017)
Past Long-Term Portfolios (2008-2016)



SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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, February 20, 2017

Introducing A New Market Timer

SGS  Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS is a Long Term (weeks to months) Timer
Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)


SGS Market Timer

About 15 years ago I developed a long term (weeks to months) market timer called SGS.  SGS is a trend following timer and works well in trending markets either in a uptrend or downtrend because, like many trend following timers, SGS is always in line, albeit a little late, with the primary trend.   The problem with  SGS and similar trend following timers is that they fall apart in a "trading" market.  A detailed and useful discussion of trading versus trending markets are presented at this blog post.

In mid 2014, after a powerful and historic five year bull run, chances were high that major indices enter into a wide trading range for an extended period. I decided it was time to modify SGS so it would fit better for that expected trading market.   I changed SGS to become more of a leading timer instead of a lagging trend following timer.  I primary relied on medium and long term Elliot Wave Theory (EWT) and Fibonacci Ratios (FR) predictions and projections.  


I realized a few months ago  that it was a mistake to us EWT and FR to make long term projections for indices or stocks.  In fact, after looking deeply into EWT and FR, I have concluded now that EWT is not a good tool for long, intermediate (days to weeks) or short (hours to days) term technical analysis because rules governing EWT are many and most are flexible enough that there is always an EWT count that perfectly fits what has happened.  FR ratios in general work well in predicting retracement levels for a given index or stock, but do poorly in projecting higher prices when used in time frames longer than hours.

New SGS Market Timer

Over the course of last few months I have been working on a new market timer that could work in a trading and trending market.  The new timer is not a price based timer and does not use any indicators or derivatives of indicators of an index or a host of indices.  It's purely based on the technical analysis of the number of new highs and new lows of  several discrete time periods (daily, weekly, monthly, etc.) for a pool of nearly 4000 liquid stocks and ETF's  traded on NYSE, NASDAQ and AMEX.

As an important part of the development of new SGS, I also back tested the new timer on several trending and trading markets.  Results are excellent and I will publish them once my testing is completed.  Below is an example of test results for SPX from mid 2015 to present time.  When value of SGS is positive SGS is long and when it is negative SGS is short.  As shown on the chart below, SGS has been long since mid 2015 except for two periods during which SPX suffered sharp sell offs.

 
An interesting observation is that SGS is diverging from SPX, i.e as SPX has been going higher and higher since mid December, SGS has been going lower and lower.  That divergence signals that the powerful rally since the election has matured and chances are high that indices start a 3% to 5% sell off anytime now.

Long Term Outlook
 
At this point chances are good for SPX to sell off to tests its AUL around 2310 sometime this coming week and then continues its sell off to test its W-DTL around 2280.

My Plan

I'm still waiting for a minor correction, 3% to 5%.  My plan is to do my first buy of three in SPY in that correction.


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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, February 12, 2017

Again, No Change Since Last Week

SGS_LT Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS_LT is a Long Term (weeks to months) Timer

Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)


My Plan

I'm still waiting for a minor correction, 3% to 5%.  My plan is to do my first buy of three in SPY in that correction.


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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, February 5, 2017

No Change Since Last Week

SGS_LT Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS_LT is a Long Term (weeks to months) Timer

Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)


My Plan

I'm still waiting for a minor correction, 3% to 5%.  My plan is to do my first buy of three in SPY in that correction.



SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.