SGS Market Timer Is NEUTRAL

SGS  Market Timer Status:  NEUTRAL 
NEUTRAL as of the close of Friday May 27, 2022
Previous SGS Status
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

From the LOD on Friday May 20 to the HOD last Friday, SPX rallied 10% on the back short-covering and dip-buying.   Last week's rally was impressive but bear market counter-trend rallies are usually impressive.  For example, SPX rallied 24% in three trading days (Fri 10/10/2008 LOD to Tue 10/14/2008 HOD) in the middle of 2008 crash.

SGS Market Timer

As of the close of last Friday (5/27), the value of SGS was calculated to be -22 and the status of SGS changed from SHORT to NEUTRAL. 

S&P 500 Support And Resistance Levels

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

My Plan

My plan is close my SDS positions sometime this week.

Current Long-Term Portfolio

Past Long-Term Portfolios

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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. 

Bear Market Rallies Are Vicious

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday April 8, 2022
Previous SGS Status
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

Generally speaking, in a bull market, sell-offs are sizable but short-lived with no follow through. In a bear market, rallies are sizable but short-lived and with no follow through.  The rally last Friday looked to be nothing but a typical bear market rally.  It was sizable but we have to see if it has any follow through early next week. 

Friday's late day short-covering rally was due to what James Bullard said on Fox Business regarding economic growth for the rest of this year and next.  He expressed a very bullish outlook for the economy and employment.  He was expecting the US economy to grow at 3% or higher and he saw no chance of recession this year or next despite aggressive rate hikes by the Fed.  Of course someone like Bullard, a super hawk, has to talk like that to justify his super aggressive stand against inflation.  

If the Fed goes through with their QT plan (around $50 Billion in June, $50 Billion in July, and $100 Billion per month starting in August) while raising rates, they would run both the stock market and the economy into the ground.  Something has to give soon and my bet is that the Fed will stop its aggressive QT.  Otherwise, the entire financial system would start to come apart once losses in SPX exceeds 30%.

SGS Market Timer

As of the close of last Friday (5/20), the value of SGS was calculated to be -926 and the status of SGS remains SHORT. 

S&P 500 Support And Resistance Levels

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

My Plan

My plan is to stay with my positions for now. 

Current Long-Term Portfolio

Past Long-Term Portfolios

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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.

It would be Silly

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday April 8, 2022
Previous SGS Status
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

Since late 2008, when Ben Bernanke put Modern Monetary Theory to work to save the US and global economy, every multi-month rally in indices was caused by implementation of a new round of "Quantitative Easing" (QE) by the Federal Reserve.  Conversely, with the exception of the decline due to Covid-19 in 2020, every multi-month sell-off in indices happened between the time that the current round of QE ended and a new round QE started.  So if all of that QE (from Oct 2008 to Feb 2022, with mother of all QE's in 2020) caused the dramatic rise in indices, now that there is no more QE, and in fact the Fed is about to start a Quantitative  Tightening (QT) program in June while raising interest rates, it would be silly to expect indices to go higher.  

There is an excellent chance that indices continue to go lower until the Fed reverses course and, at the minimum, stops its QT program all together. 

SGS Market Timer

As of the close of last Friday (5/13), the value of SGS was calculated to be -927 and the status of SGS remains SHORT. 

S&P 500 Support And Resistance Levels

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

My Plan

My plan is to stay with my positions for now. 

Current Long-Term Portfolio

Past Long-Term Portfolios

twitter
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.

It's Not Higher Interest Rates, It's QT

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday April 8, 2022
Previous SGS Status
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

Last Wednesdays the Fed announced details for their plan to reduce the Fed's balance sheet (a.k.a Quantitative Tightening, QT).  According to that plan, in June Fed's primary dealers are to sell $47.5 billions of Fed's assets that they are holding in trust, in July they are to sell another $47.5 billions, and starting in August, Fed primary dealers are to sell $95 billions of Fed's assets every month.  

That is an aggressive QT plan that will force Fed's primary dealers to sell some of equities they had bought using the margin created by assets they are holding in trust for the Fed.  As primary dealers unwind their equity positions to meet margin requirements, indices suffer; and that suffering will continue until the Fed is forced to either end its QT or significantly moderate it in a few months due to continued sell-off in equity and bond markets. 

SGS Market Timer

As of the close of last Friday (5/6), the value of SGS was calculated to be -1545 and the status of SGS remains SHORT. 

S&P 500 Support And Resistance Levels

Support and resistance levels for SPX for this week are shown above.  On Wednesday a lower than expected CPI (year-over-year) could caused a monster counter-trend rally.  A consensus read (8.1%) or worse, very likely would cause significant more selling.

My Plan

Per my plan, I put another 35% of my cash into SDS last Wednesday.  My plan is to stay with my positions for now. 

Current Long-Term Portfolio

Past Long-Term Portfolios

twitter
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.  

Selling Continues

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday April 8, 2022
Previous SGS Status
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

SGS Market Timer

As of the close of last Friday (4/29), the value of SGS was calculated to be -1033 and the status of SGS remains SHORT. 

S&P 500 Support And Resistance Levels

Support and resistance levels for SPX for this week are shown above.  Indices are over-sold short-term (hours to days) and there is a good chance that we see a sizable bounce early this week.  Medium-term (days to weeks), chances are good that SPX continues to sell off. 

My Plan

With SGS being SHORT, I put 35% of my cash into SDS last Wednesday.  My plan is to add to my SDS position sometime this week.

Current Long-Term Portfolio

Past Long-Term Portfolios

twitter
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.