SGS Market Timer Is NEUTRAL

SGS Market Timer Status:   NEUTRAL 
Neutral as of close of 10/14/2014

RTS Long Term Current and Past Portfolios

SGS Market Timer is NEUTRAL as of close of Tuesday Oct 14.  I closed some short positions yesterday and today.  I'm going to close all shorts positions early tomorrow.

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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.

Short Term Indices Are Oversold

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

RTS Long Term Current and Past Portfolios

SPX came very close to test its 200 D-SMA last Friday.   Also on Friday the number of new lows for many time frames (i.e. 252 to 7 day) sky rocketed to levels not seen since early 2009. That kind of jump in number of new lows signals two things:

1. Short term indices are oversold and a bounce is coming.
   
2. The bottom for the current sell off that started on Fri September 9/19 is nowhere in sight.

So out it's out with BTFD and in with STFP going forward for foreseeable future. Of course this would all change if the Fed intervenes, but that's not going to be anytime soon, not at least until we get a 10% to 20% correction and things start to look bleak economically (i.e. shrinking GDP).

Chances are excellent for SPX to sell off to test its Primary Uptrend Line (PUL) around 1880 on Monday.  PUL is strongest support that there is. It has shouldered the entire bull run since March 2009. It won't come down that easily. It will take at least 2 or 3 big blows, first which is very likely going to be delivered tomorrow. 

A shallow penetration of PUL and rebound to close above 200 D-SMA tomorrow would turn SGS timer back to "NEUTRAL".  My plan is to close shorts sometime tomorrow, hopefully at the low of the day.

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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.

Another Ugly Week Is Ahead

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

RTS Long Term Current and Past Portfolios

SPX is now trading in a well defined down trending channel.  On Friday SPX rallied and tested the upper channel line which happens to be Primary Downtrend Line (PDL).  Chances are excellent that selling starts again and SPX continues its decline within its price channel.

Last week as SPX sold off, it broke through and traded below two long term Active Uptrend Lines (AUL, shown in thick orange).  Price violation of those AUL's is significant because they have been shouldering the bull run since Nov 2012 and Oct 2011, respectively.   SPX very likely tests and closes below those lines again sometime this coming week.  That would signal additional selling for SPX to test its 200 D-SMA around 1900.  A close below 1900 for SPX before midterm election would signal two things:

• Democrats are going to lose the Senate.
  
  
• A test of Primary Uptrend Line (PUL) for SPX around 1880 is highly likely.  PUL support would likely hold and indices would rebound on the back of Reps victory and short covering.  The rebound would be short lived as we enter into an at least two year bear market.

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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.

Selling Should Resume With Vengeance

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

RTS Long Term Current and Past Portfolios

Updated for recent trades

If indices are to correct 10% to 15%, the selling should start this coming week.  Otherwise the sell off may never materialize anytime soon, especially if companies start reporting great earnings for the 3rd quarter.

Last week SPX tested its 50 D-SMA, but managed to close above it for the week on Friday.  That is not good news for bears, but still chances are excellent that selling starts this coming 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.

It's Going To Get Ugly

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

RTS Long Term Current and Past Portfolios

Everyday last week Big Money (BM) pushed cash indices higher by buying their future contracts, but even BM is not big enough to continue that indefinitely.  Now BM has no choice other than selling those contracts he accumulated for the last couple of weeks.

Chances are good that Friday sell off accelerates on Monday.  My plan is to add more short positions as SPX close below its 20 D-SMA, very likely on Monday.

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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.

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.

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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.

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.

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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.

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.

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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.

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.

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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.

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.

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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.

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.

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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.

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.

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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.