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.


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.