Sunday, February 18, 2018

Forks In The Road Ahead

SGS  Market Timer Status:  SHORT 
LONG as of the close of Friday, February 9, 2018
SGS is a Long-Term (weeks to months) Timer

Why Market Timing Is A Must

Trading is about understanding and determining the probabilities that exist between 0% and 100% certainties.  A trader often runs  into forks in the trading road and has to determine which path to take by assessing the probability of success versus failure.

The forks in the trading road for SPX is shown above.   There is a high likelihood that SPX sells-off to test its recent low (2532) early next week.

SGS, despite advancing every day this week, closed below -50 on Friday.  That is bearish and signals more selling ahead by indices to test their recent lows.

SPX rallied every day this week and retraced back around 60% of its losses from its all-time high (2872) to its recent low (2532) two Fridays ago.  As of the close of Friday, SPX was trading above its daily and weekly DTL (13 EMA).  That is bullish but the fact that SPX penetrated so deep into its W-DTL line and traded below that for four days raises serious doubts about the integrity of the uptrend going forward.

At this point, there is a good chance that major indices sell-off next week to test their recent lows.  Should those lows fail with heavy volume, deteriorated breadth and internals, then major indices would sell-off a lot more.

My Plan

Per my plan I closed my long positions on Wednesday and Friday.  Should indices sell-off this coming Tuesday, my plan is to open my first of three short positions in SDS.

I will tweet next week as I open short positions.

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.