Sunday, August 11, 2019

The Trade War With China Has Its Consequences

SGS  Market Timer Status:  NEUTRAL 
NEUTRAL as of the close of Friday Aug 9, 2019
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must



Trump has been told that a recession is coming in 2020 and he would lose the presidential election unless "the 2020 recession" is averted.  He is also been told that the only way to avert the 2020 recession is for the Fed to start cutting rates "aggressively now".

The Fed has stated several times that the Fed was closely monitoring the trade dispute with China and its effects on the US economy.  Trump was disappointed on July 31 when the Fed cut rates by only 25 basis points and not 50 as he was demanding.  Someone probably told Trump that if he wanted his rate cuts, he'd better escalate the trade war with China.  So in the middle of trading day on August 1, the day after FOMC announcement, Trump tweeted that he was planning to impose a 10% tariff on all remaining Chinese goods starting on September 1.  That started the on-going sell-off since August 1.

Unfortunately, Trump does not understand that a trade war is always a lose-lose and dicey proposition.  For example, the Chinese government could start importing Iranian oil again which would probably cause a 10% to 20% correction in the price of crude oil.  That alone would send SPX down by at least by 5%.  Chinese could also let Renminbi depreciate significantly against the US dollar, causing a global currency war, which would push stock markets worldwide down between 20% to 30% in a very short time, perhaps a couple  of weeks to a month.  If that happens, the very recession that Trump is trying to avoid, would surely be upon us.


SGS declined last week confirming the sell-off.  On Friday SGS changed its status from LONG to NEUTRAL.


Support and resistance levels for SPX for this week are shown above.  Should the trade war escalates this coming week, I expect SPX to test its early June low around 2730.


My Plan

I was planning to open long positions last week but on Sunday (8/4) late at night Chinese warned that they might let Renminbi depreciate significantly against the Dollar.  That was the first shot in a possible global currency war.  That's a game changer in my opinion. 

I'm in cash and watching SGS.   Should SGS decline below -50, my plan is to open my first of two long positions in SDS.
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Contact: 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, August 4, 2019

Selling Is Very Likely Done

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Jun 14, 2019
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must



There is a good chance that selling that started last week has run its course. This is based on several facts including breadth, internal data, and lack of panic selling in individual stocks. 


SGS declined last week confirming the sell-off but didn't declined significantly which would have signaled continuation of selling.


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


My Plan

I'm planning to open first of two long positions in IWM (25% of total capital), in TWTR, APG, SE, TQQQ, and MSFT (5% each for a total of 25% of total capital) sometime early this week.
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Contact: 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, July 21, 2019

A Critical Week Is Coming Up

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Jun 14, 2019
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must



So far earnings and outlooks have been a mixed bag of satisfaction and disappointment. This week more companies report and more data is released on housing, employment, and GDP.  Also, there is the likelihood of breaking news related to Iran and Muller's testimony before the House.  I expect a volatile week.


SGS declined last week and didn't confirm new all-time highs in DJI, SPX and NAZ.  That's bearish especially when leading indices RUT and DJT are nowhere near their new all-time highs.



Support and resistance levels for SPX for this week are shown above.  As shown above, there are two rising wedges on the price chart for SPX, a small one and a giant one.  A price break below the smaller wedge early this week would signal a high likelihood of a price break below the bigger wedge.


My Plan

I'm watching indices and SGS for now.
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Contact: 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, July 14, 2019

Earnings and Forecasts Will Make Or Break Indices

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Jun 14, 2019
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must



Starting this week, markets get to assess Q2 earnings and forecasts for major companies listed on NYSE and NASDAQ.  Companies are widely expected to meet their earnings but if their forecasts for future earnings are not rosy, indices would correct between 5% to 15%.  The correction could become much deeper if the US-China trade negotiations fail or a new war breaks out in the Middle East.


SGS advanced last week, confirming new all-time highs in DJI, SPX and NAZ.  That is bullish.


Support and resistance levels for SPX for this week are shown above.  As shown above, there is a giant rising wedge on the price chart for SPX. That is bearish.


My Plan

I'm watching earnings and forecasts for several companies this week.  If all rosy, my plan is to open my first of two long positions in QQQ.
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Contact: 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.

Monday, July 1, 2019

Volatility Returns

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Jun 14, 2019
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


I expect a volatile July and August with indices going no where.

SGS remained flat and I expect it to whipsaw its status.

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


My Plan

No change since last week.
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Contact: 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, June 23, 2019

Iran War? For Warmongers It's Now or Never

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Jun 14, 2019
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must



It's now or never for those who are pushing for a war against Iran, namely Neocons in DC, the Israeli right, Kushner,  MBS and MBZ.  Trump, for his own self-serving reasons, is against any military action but war mongers are scheming now so that a strike against Iran becomes inevitable.  I expect something major happens soon.

SGS advanced last week and confirmed new the new all-time high for SPX.


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


My Plan

Per my plan I closed my SDS positions.  I'm in cash and watching to see what happens in the Middle East.  If there is a massive strike against Iran, Iran would surely strike back and hit US, Arab, and possibly Israeli targets.  What happens after that and how we or Israel respond could bring on an all out war in the Middle East for many years to come with direct or indirect involvement of Russians and Chines.
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Contact: 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, June 16, 2019

SGS Market Timer Is LONG

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Jun 14, 2019
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must




SGS advanced last week and closed at +68 on Friday. SGS status changed from NEUTRAL to LONG. 

Support and resistance levels for SPX for this week are shown above.  For SPX, a close above 2900 would signal a high likelihood that rally continues to challenge recent all-time high.


My Plan

No change since last week, a daily close above 2900 would be a signal form me to close all open SDS positions.
twitter
Contact: 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, June 9, 2019

SGS Market Timer Is NEUTRAL

SGS  Market Timer Status:  NEUTRAL 
NEUTRAL as of the close of Friday Jun 7, 2019
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must




As shown on the SPX monthly chart above, SPX bounced off of its M-DTL strongly and retraced around 60% of its recent sell-off from its all-time high 2954 to 2728 recent low.  The strong rally last week was due to the Fed's willingness to cut interest rates aggressively to prevent a recession.  If the US economy is heading in to a recession, I'm not sure how cutting rates would prevent it.  The two recessions in the last 20 years (2000 to 2002 and 2008-2009) still happened despite aggressive rate cuts by the Fed.  It was the massive injection of money into the economy, via Iraq War in 2003 and QE in 2008, that ended the last two recessions.

The rally last week had all characteristics of a short-covering rally. If SPX resume its sell-off this week and dips below its M-DTL, there would be a high chance that SPX declines much more.


SGS advanced last week and closed at +29 on Friday. SGS status changed from SHORT to NEUTRAL.


Support and resistance levels for SPX for this week are shown above.  For SPX, a close above 2900 would signal a high likelihood that rally continues to challenge recent all-time high.


My Plan

I did expect a counter-trend rally but not as strong as what was started on Tuesday and continued into close on Friday.  I expect the sell-off in indices resume soon but a close above 2900 sometime this week would be a signal form me to close all open SDS positions.
twitter
Contact: 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.