Sunday, September 27, 2020

Chaos Is Coming Sooner Than Expected

SGS  Market Timer Status:  NEUTRAL 
NEUTRAL as of the close of Friday Sep 25, 2020
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


The widely expected election chaos  is not going to happen when ballots are being counted after November 3.  There is a good chance that the Democratic win will be massive enough so that sometime in early hours of November 4, the Republican rank-and-file will concede and call on Trump to honor the 200+ year old peaceful transition of power in the United States.  

After all ballots are counted my guess (below) is  that the 2020 election will be a historic win for Democrats and a loss for Republicans.
  • Electoral College Vote: Biden 400+ / Trump 130-
  • Popular Vote: Biden 60+% / Trump 40-%
  • US Senate: 52+ Democrats / 48- Republicans
  • US House: Democrats will add 5+ more seats
  • Trump resignation prior to Jan 20, 2021 is likely
The expected chaos, however, will start shortly after the first presidential debate and will continue until Nov 3, 2020.  There is a good chance that indices suffer during this period and give back between 40% to 60% of their gains since their March lows.


SGS Market Timer

As of close of last Friday, the value of SGS is -26.  SGS status changed from LONG back to NEUTRAL.


Support and resistance levels for SPX for next week are shown above.  There is a good good that the rally that started last Friday continues early this week and SPX retraces back between 40% to 60% of its recent losses.  After that, chances of indices resuming their sell-off are high.


My Plan

With SGS turning NEUTRAL, my plan is to close my SPY and QQQ long positions sometime early this 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, September 20, 2020

SGS Market Timer Is LONG

 SGS  Market Timer Status:  LONG 
LONG as of the close of Friday Sep 18, 2020
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


There is a good chance that the sell-off that started earlier this month has run its course.  I expect indices to head higher this week.


SGS Market Timer

As of close of Friday, the value of SGS is +178.  SGS status changed from  NEUTRAL to LONG.


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


My Plan

No change since last week, I'm watching indices and letting them lead.  I will adjust my positions as needed.


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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, September 13, 2020

A Critical Week Is Ahead

 SGS  Market Timer Status:  NEUTRAL 

NEUTRAL as of the close of Friday Sep 4, 2020
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


Indices seem to be waiting for a catalyst to push them higher or take them lower.  At this point, chances of a catalyst to take indices lower are high.

SGS Market Timer

As of close of Friday, the value of SGS is +48.  SGS status remains NEUTRAL.


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


My Plan

I'm watching indices and letting them lead.  I will adjust my positions as needed.


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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, September 6, 2020

SGS Market Timer Is NEUTRAL

SGS  Market Timer Status:  NEUTRAL 
NEUTRAL as of the close of Friday Sep 4, 2020
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

There is a good chance that the US presidential election ends up in the mother of all political chaos. Last week's sell-off was a tamed sample of the chaos that could be coming our way in October or November. A historic and unprecedented chaos that could last for weeks, if not months, during which indices would go lower and lower everyday.

As show on chart above,  SPX  could give back between 40% to 50% of gains since its March low.  One of the best ways to trade that very likely sell-off is using UE-BWB put option spreads.  Sometime this week, I'm planning to open those spreads for November 20 expiration of QQQ, SPY, and IWM puts.  If you're interested in details of those spreads, please send me an email.


Changes to SGS Market Timer

Per my plan, I changed the algorithm for calculating the value of SGS to the algorithm used for calculating the value for sgs-st.  Going forward,  I'm planing to publish only the value of SGS.  The value of SGS, calculated using Fridays internal data, dictates the status of SGS as summarized in table below:
  • SGS is   NEUTRAL  (overbought) when its value greater than +500 
  • SGS is  LONG  when its value > +50 but less than +500
  • SGS is   NEUTRAL  when its value is less than +50 but greater than -50
  • SGS is  SHORT  when its value is less than -50 but  greater than -500
  • SGS is   NEUTRAL  (oversold) when its value less than -500
As of close of last Friday, the value of SGS was -49 and SGS changed its status from LONG to NEUTRAL.


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


My Plan

Per my plan I opened a new long position in SPY last Thursday. If sell-off that started on Thursday continues, I would close my SPY position.


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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 30, 2020

Cash Becomes Trash

 SGS  Market Timer Status:  LONG 

LONG as of the close of Friday May 22, 2020
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

Last Thursday, Jerome Powell effectively said that there was no limit to the Fed's balance sheet.   In other words, the Fed will pump trillions and trillions more into the economy, i.e. stock market, as asset prices rise and cash becomes trash. 
As shown on  the chart above, SGS is long and now heading higher after last week strong and broad rally. 

I am also working to improve SGS timer by using the same timing algorithm used for sgs-st.

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


My Plan

I am planning to watch indices and now looking for a dip to open new long positions.  I am planning to put 25% of cash into SPY sometime next 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, August 23, 2020

Hungry Bears Are Roaming Around

SGS  Market Timer Status:  LONG 

LONG as of the close of Friday May 22, 2020
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

As shown on the chart above, SPX ground higher last week but failed to overcome resistance at and around its previous all-time high (3393).  That's bearish and signals a high likelihood of sizable selling ahead.
As shown on  the chart above, SGS is long but heading lower, bearish. Also, SGS DTL (red) crossed its 20 D-SMA (blue), signaling a high likelihood of sizable selling ahead. 

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


My Plan

Per my plan, last Wednesday I opened a new long position in QQQ with remaining 15% cash, but on Friday after seeing significant bearish divergence in market breadth and internal for two days in a row, I closed my long positions in SPY, IWM, and QQQ.  My positions in GLD, SLV, and GBTC (bitcoin ETF) are still open.

Going forward, I am planning to watch indices for a few days and then decide how to deploy my cash (75% of total capital).


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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, August 16, 2020

Critical Week Is Ahead

SGS  Market Timer Status:  LONG 
LONG as of the close of Friday May 22, 2020
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

As shown on the chart above, SPX failed last week to overcome its all-time (3393) resistance.  That is bearish and increases the odds of major indices entering into an extended period of consolidation or correction.  

How SPX trades this week is critical.  If SPX sells off and closes below its lower boundary line of its price channel, then further selling to test its 50 D-SMA and 200 D-SMA would be more likely.  If SPX rallies pass its all-time high and the upper boundary of its smaller price channel however, then a move higher to test the upper boundary of its larger price channel (around 3700 sometime next month) would be more likely.
As shown on  the chart above, SGS is long but heading lower, bearish.

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


My Plan

Last Monday I closed my long position in QQQ, and per my plan, I opened new positions in SPY, IWM, GLD, and SLV on Tuesday.  This week, I'm letting the market make the first move.  If indices head higher, then I would open a new long position in QQQ (remaining 15%).  Otherwise, I would very likely close my IWM and SPY long positions.


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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.

Saturday, August 8, 2020

Channel Within Channel

 SGS  Market Timer Status:  LONG 
LONG as of the close of Friday May 22, 2020
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

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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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 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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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 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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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 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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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.