Sunday, September 14, 2014

SGS Market Timer Is SHORT

SGS Market Timer Status:   SHORT 
Short as of close of 9/12/2014

RTS Long Term Current and Past Portfolios
In Cash


SGS Market Timer is short as of close of last Friday.  SPX is on its way to tests its 50 D-SMA early this coming week and continue to sell off to test its Active Uptrend Line.

My plan is to open first short position of three in indices (SPY, QQQ and IWM) sometime early Monday.  As soon as SPX closes below its 50 D-SMA, I will add to short positions in indices and short 5 stocks with the lowest RTS ranking.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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Sunday, September 7, 2014

A Top Is In

SGS Market Timer Status:   NEUTRAL 
Neutral as of close of 8/1/2014

RTS Long Term Current and Past Portfolios
In Cash


A top is in and the start of a 10% to 15% correction is imminent, however; it's too risky to go short right away.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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Monday, September 1, 2014

Upside For Indices Is Limited

SGS Market Timer Status:   NEUTRAL 
Neutral as of close of 8/1/2014

RTS Long Term Current and Past Portfolios
In Cash 
 

Last week SPX continued its advance and setting new all time highs on shrinking volume and leadership.  This type of advance is not sustainable and 10% to 20% correction could start at any point now.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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Sunday, August 24, 2014

A Top Is Very Likely In

SGS Market Timer Status:   NEUTRAL 
Neutral as of close of 8/1/2014

RTS Long Term Current and Past Portfolios
In Cash 

SPX set new all time highs on 7/3/2014, 7/24/2014 and 8/21/2014.  A more careful look at all 500 SPX components reveals that while the index itself was setting new all time highs, the number of its individual stock components setting new highs dramatically decreased:
  • On 7/3/2014, SPX printed 1985.59 while 92 out of 500 reached a new 52-week high
  • On 7/24/2014, SPX printed 1991.39 while 68 out of 500 reached a new 52-week high
  • On 8/21/2014, SPX printed 1994.76 while 47 out of 500 reached a new 52-week high 
The market has continued its rally on a narrow leadership.  It's hard to determine how long such a rally lasts, but its days are definitely numbered.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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Sunday, August 17, 2014

For Now Cash Is King

SGS Market Timer Status:   NEUTRAL 
Neutral as of close of 8/1/2014

RTS Long Term Current and Past Portfolios
In Cash 


Bull Case:  From its all time high, SPX corrected 4.3% (1991 to 1905) in the recent sell off.  As of high of last Friday, SPX has regained 3.1% of that 4.3% correction.  That's a 72% retracement which is higher than a typical bear market initial retracement (around 62%) and hence chances of SPX continuing its rally to another all time high and possibly beyond is good.

Bear Case:  From the low of recent sell off SPX has recovered 72% of its loss and NDX has recovered almost 100% of its loss while small caps represented by RUT has recovered only 36% of its loss.   Clearly a top is being formed as dumb money is piling  into large caps and momentum stocks.   Once dumb money is all in, Big Money will pull the rug from under dumb money's feet.

Times like this, it's best to stay in cash until Market makes up its mind.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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Sunday, August 10, 2014

Indices Look Terrible

SGS Market Timer Status:   NEUTRAL 
Neutral as of close of 8/1/2014
 
RTS Long Term Current and Past Portfolios
In Cash 
 
During the sell off last week, SPX was supported well by its 100 D-SMA.  Should that support fail and SPX closes below it, chances are good that SPX sells off quickly to test its PUL (thick black which was btw drawn incorrectly previously) and possibly its 200 D-SMA.

The Fed ending its debt buying is a game changer in my opinion.   In the past (since 1980) Fed tightening of interest rates caused a sell off in the short term (a few months), but indices recovered and went on to set new highs because the economy kept on growing at a healthy 3% to 4% rate. The sell off this time around could be deep because: 
  • SPX went up 199% since March 09 low (666 to 1991). It's quite probable and healthy for SPX to give up 10% to 20% of that gain before heading back up again.
  • What the Fed has done since March 2009 is unprecedented and historic. Although I  supported what they did (the alternative would have been "a collapse of world's economy"), but no one knows if our economy would continue to grow and accelerate that growth to 3% to 4% once the Fed is no longer stimulating by buying mortgage back debts. If we stop growing and enter into a recession or even grow at an anemic rate of 1% to 1.5%, then a 50% correction is very likely (i.e. Japan economy, Nikkei Index and Japanese real estate in 1990's).
  • In the last five years, SPX had two significant corrections (first one was in Summer of 2010, 17% correction, and the second one in Summer / Fall of 2011, 22% correction). Both corrections started when Fed's QE's (I and II) ended and both correction did not end until the Fed announced new QE programs.  The last QE plan  "QE Infinity" is ending in October and the Fed has no plan to any more rounds fo QE in the foreseeable future.  
From here forward, indices will react in a direct correlation to economic news. Growth rate, PPI, unemployment, initial claims data, auto sales, new homes, durable goods, Michigan consumer sentiment ... will push indices up and down.  If our economy does not start to grow at 3.5% to 4.5% rate with very little or no inflation, there is hell to pay (at least a 20% to 30% correction) in the short term no matter what.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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Sunday, August 3, 2014

SGS Market Timer Is Neutral .... Indices Are Oversold

SGS Market Timer Status:   NEUTRAL 
Neutral as of close of 8/1/2014
 
RTS Long Term Current and Past Portfolios
In Cash ... Updated for recent trades
 
As of close of Friday, SPX has corrected around 3.5% from its July 24 all time high. It closed below slightly below its Primary Uptrend Line (PUL, thick black).  At this point, SPX is oversold and chances of a rally this coming week is high, especially if it can rally to first back test PUL and then close above it. 

Big Money will try his best this coming week to rally SPX up in order to get the dumb money who has been sitting on sideline for a while to come in and buy the dip (BTFD).  Chances are good that SPX rallies to challenge its all time high and possibly 2000 within the next couple of weeks.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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Monday, July 28, 2014

SPX And NDX Have Topped Out

SGS Market Timer Status:   SHORT 
Short as of close of 7/17/2014
 
RTS Long Term Current and Past Portfolios

A top has been formed now and large cap indices (DJI, SPX and NDX) are positioned to follow RUT to lower values.  SPX tested its 20 D-SMA on again on Friday.  That was the 8th test of that support for SPX in the last 3 weeks.  After so many blows, that support has been weakened substantially and it's ready to cave in, probably early this week.  A daily close below 20 D-SMA would signal more selling and a very likely test of 50 D-SMA for SPX.

Looking at weekly charts,  since 2009 bottom, every time that RUT has traded at or below its 50 W-SMA, SPX has at least tested its 20 W-SMA.  RUT is about to test 50 W-SMA (1128, very likely this week) again which would suggest a temporary bottom for sell off around 1910ish for SPX

RTS Portfolio is 50% short in IWM, QQQ, SPY (equally) and 50% in cash.   My plan is to add to its short positions (another 25%)  as SPX starts to trade below its 20 D-SMA.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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Sunday, July 20, 2014

It Might Pretty Ugly This Coming Week

SGS Market Timer Status:   SHORT 
Short as of closes of 7/17/2014

RTS Long Term Current and Past Portfolios
Updated for trades on 7/18/2014

SPX back tested its Primary Downtrend Line (PDL, shown in black) on Friday.  That was the second back test of PDL since current sell off started on July 7.

At this point, chances are high for SPX to sell off to test its 20 and 50 D-SMA sometime during the next couple of weeks unless companies reporting earnings this week totally blow away expectations.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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Friday, July 18, 2014

SGS Market Timer Is SHORT

SGS Market Timer Status:   SHORT  
Short as of closes of 7/17/2014

RTS Long Term Current and Past Portfolios

SGS Market Timer is "SHORT" as of close of Thr 7/17/2014.

SPX closed under its 20 D-SMA yesterday.  At this point a sell off to test supports at 1920 and 1900 is likely.  My plan is to add to RTS short positions as SPX back tests its 20 D-SMA, possibly today or on Monday.


Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
on

Monday, July 14, 2014

Indices Are Overbought

SGS Market Timer Status:   NEUTRAL   
Neutral as of close of 6/19/2014

RTS Long Term Current and Past Portfolios
Updated for trades on 7/11/2014

 

SPX is challegining its all time high, but I believe this rally will fail and SPX sells off to test its PUL (black) around 1920 within next couple of weeks.

On Friday, I started opening my short positions (1 of 4) in SPY, QQQ and IWM.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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Sunday, July 6, 2014

Upside For Major Indices Is Limited

SGS Market Timer Status:   NEUTRAL 
Neutral as of close of 6/19/2014

RTS Long Term Current and Past Portfolios
RTS Portfolio long positions were closed on (Fri 6/20).  RTS Portfolio is in cash now.
 
Nearly by all measure, major indices are overbought and the likelihood of a 10% to 15% correction is high especially for NAZ and RUT.  My plan is to start opening short positions in SPY, QQQ and IWM as soon as SPX breaks through its 20 D-SAM, possibly sometime late this coming week or early the following week.

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Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.
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