Sunday, December 9, 2018

The Beginning Of The End

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


On Friday for the first time Federal prosecutors directly implicated Trump in two crimes in his 2016 campaign. This is the beginning of the end of the Trump presidency in my opinion.  

It's remarkable how similar the order of events is to Watergate.  Richard Nixon had better than 50% approval rating and the support of all of republicans in the Congress until in spring  of 1974 when the Watergate special prosecutor (appointed by the House after DOJ special counsel was fired by Robert Bork following Nixon's order) started releasing his findings and issuing indictments. Also in spring of 1974 Watergate hearings started in the House Judiciary Committee.  At that point, it became abundantly clear to Republicans in the Congress that Nixon was toxic and they would lose their seats in the mid-term election of 1974 with Nixon in the White House.   It still took until summer of 1974 for Republicans to march to the White House and demand Nixon's resignation.  Nixon resigned on August 9, 1974.  A month later, President Ford gave a full pardon to Nixon.

I see a similar thing happening again as history repeats itself.  An R-rated version (thanks to Stormy and Karen) of Watergate is underway now.  My main interest is what's going to happen to the stock market.  As shown in above chart, SPX corrected around 50% during Watergate (1/1973 to 10/1974) and the bulk of that correction (about 40%) occurred at the height of Watergate scandal.

As shown above, the "bottom head & shoulders" price pattern on SPX daily didn't pan out when SPX could not overcome the resistance around 2800.  Short-term, however, Indices are at extreme oversold levels.  Chances are good that we see a bounce early this week before indices resume selling.

SGS declined everyday last week and it still in SHORT territory, signalling that, in the long-term (weeks to months), there is still a high chance (> 70%) that major indices continue trading lower.

Support and resistance levels for SPX for the upcoming week are shown above. 

My Plan

On Friday, I opened my first of three positions in SDS. My plan is open my second SDS position early this coming week and the final SDS position if and when SPX takes takes out support around 2630-2620.

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

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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, December 2, 2018

Economic Crisis Avoidance

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


Economic Crisis Avoidance Deus ex Machina - Part I: Active Asset Price Inflation
  • Asset Price Inflation as a tool of monetary policy
  • Rate hikes to end soon
  • New large-scale asset purchases in the future
  • Crash and recession delayed
... read more 

As shown above, the "bottom head & shoulders" price pattern on SPX daily chart is still in play.  There is still a  reasonable chance that SPX rallies this week to test the Neck Line around 2810 to 2820. 

SGS advanced everyday last week but SGS is still in SHORT territory, signalling that, in the long-term (weeks to months), there is still a high chance (> 70%) that major indices continue trading lower.

Support and resistance levels for SPX for the upcoming week are shown above. 

My Plan

No change since last week, I'm still in cash and going to watch internal data as SPX trades around 2800 this week.  Again, I'm specifically looking at the number of new lows for yearly, quarterly, and monthly time frames.  If the sell-off is done and indices are to move higher to challenge their all-time highs, then the number of new lows should drop significantly in those time frames.  Otherwise, what's going on is nothing but a bear market counter-trend rally to trap bulls.

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

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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.