Sunday, March 5, 2017

Selling Very Likely Continues

SGS  Market Timer Status:  LONG 
LONG as of close of November 11, 2016
SGS is a Long-Term (weeks to months) Timer


SGS continued to put in lower highs last week, signaling that the sell-off that started last Thursday very likely continues.

Two things could happen now: 
  1. SGS continues going lower until it crosses and closes below zero line. A close below zero line would turn SGS from LONG to SHORT.
  2. SGS turns back up and closes above its DTL and ADL which would signal that the correction is very likely over.

Short-Term (hours to days) Outlook


Shorter term, SPX is overbought.  Chances are good that SPX continues going lower this coming week and tests of its D-DLT around 2360 and AUL around 2350.

Long-Term (weeks to months) Outlook


Longer term, chances are good that SPX continues to sell-off and test its AUL around 2340 sometime this coming week and then its W-DTL around 2310.

I think if the Congress enacts Trump tax plan, military spending and repeals ACA then we should see a significant rise in indices despite rising interest rates; however, amid current controversies and scandals surrounding the Trump Administration, chances are low that any of that comes to fruition.  Hence, chances of additional gains in indices are low.

My Plan

I am going to follow SGS and start buying SPY if SGS starts to uptick and closes above its ADL. If SGS continues to go lower and turns short, I would start opening short position in SPX by buying SH.

Current Long-Term Portfolio (2017)
Past Long-Term Portfolios (2008-2016)


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.
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Sunday, February 26, 2017

Indices Are Overbought - A Correction Is Coming

SGS  Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS is a Long-Term (weeks to months) Timer
 

SGS timer continued to put in lower values last week as SPX marched higher.  The divergence exhibited by SGS points to a high likelihood of a sell-off this coming week.  I'm waiting to see if SGS goes lower early and possibly crosses its D-DTL and closes below it.  That would be bearish and it would be prudent to close long positions.

Short-Term (hours to days) Outlook



 Shorter term, SPX is overbought.  Chances are good that we see a sell-off this coming week and possibly a test of D-DLT around 2350 and AUL around 2330.

Long-Term (weeks to months) Outlook



 Longer term, chances are good for SPX to sell-off to tests its AUL around 2320 sometime this coming week and then continues its sell-off to test its W-DTL around 2300.

My Plan


I'm still waiting for a minor correction, 3% to 5%.  My plan is to do my first buy of three in SPY in that correction unless SGS drops dramatically in the sell-off.

Current Long-Term Portfolio (2017)
Past Long-Term Portfolios (2008-2016)



SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.
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Monday, February 20, 2017

Introducing A New Market Timer

SGS  Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS is a Long Term (weeks to months) Timer
Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)

SGS Market Timer

About 15 years ago I developed a long term (weeks to months) market timer called SGS.  SGS is a trend following timer and works well in trending markets either in a uptrend or downtrend because, like many trend following timers, SGS is always in line, albeit a little late, with the primary trend.   The problem with  SGS and similar trend following timers is that they fall apart in a "trading" market.  A detailed and useful discussion of trading versus trending markets are presented at this blog post.

In mid 2014, after a powerful and historic five year bull run, chances were high that major indices enter into a wide trading range for an extended period. I decided it was time to modify SGS so it would fit better for that expected trading market.   I changed SGS to become more of a leading timer instead of a lagging trend following timer.  I primary relied on medium and long term Elliot Wave Theory (EWT) and Fibonacci Ratios (FR) predictions and projections.  

I realized a few months ago  that it was a mistake to us EWT and FR to make long term projections for indices or stocks.  In fact, after looking deeply into EWT and FR, I have concluded now that EWT is not a good tool for long, intermediate (days to weeks) or short (hours to days) term technical analysis because rules governing EWT are many and most are flexible enough that there is always an EWT count that perfectly fits what has happened.  FR ratios in general work well in predicting retracement levels for a given index or stock, but do poorly in projecting higher prices when used in time frames longer than hours.

New SGS Market Timer

Over the course of last few months I have been working on a new market timer that could work in a trading and trending market.  The new timer is not a price based timer and does not use any indicators or derivatives of indicators of an index or a host of indices.  It's purely based on the technical analysis of the number of new highs and new lows of  several discrete time periods (daily, weekly, monthly, etc.) for a pool of nearly 4000 liquid stocks and ETF's  traded on NYSE, NASDAQ and AMEX.

As an important part of the development of new SGS, I also back tested the new timer on several trending and trading markets.  Results are excellent and I will publish them once my testing is completed.  Below is an example of test results for SPX from mid 2015 to present time.  When value of SGS is positive SGS is long and when it is negative SGS is short.  As shown on the chart below, SGS has been long since mid 2015 except for two periods during which SPX suffered sharp sell offs.

 
An interesting observation is that SGS is diverging from SPX, i.e as SPX has been going higher and higher since mid December, SGS has been going lower and lower.  That divergence signals that the powerful rally since the election has matured and chances are high that indices start a 3% to 5% sell off anytime now.

Long Term Outlook
 
At this point chances are good for SPX to sell off to tests its AUL around 2310 sometime this coming week and then continues its sell off to test its W-DTL around 2280.

My Plan

I'm still waiting for a minor correction, 3% to 5%.  My plan is to do my first buy of three in SPY in that correction.


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.
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Sunday, February 12, 2017

Again, No Change Since Last Week

SGS_LT Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS_LT is a Long Term (weeks to months) Timer
Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)

My Plan

I'm still waiting for a minor correction, 3% to 5%.  My plan is to do my first buy of three in SPY in that correction.


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.
on

Sunday, February 5, 2017

No Change Since Last Week

SGS_LT Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS_LT is a Long Term (weeks to months) Timer
Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)

My Plan

I'm still waiting for a minor correction, 3% to 5%.  My plan is to do my first buy of three in SPY in that correction.



SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.
on

Sunday, January 29, 2017

Still Waiting For An Entry To Go Long

SGS_LT Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS_LT is a Long Term (weeks to months) Timer
Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)


Long Term Outlook


Longer term, chances are good for SPX to sell off to tests its DTL-W around 2250 sometime this coming and then continues its sell off to test its PUL-2 and price support around 2200.

Short Term Outlook


Shorter term, chances are good for SPX to sell off to tests its D-DTL around 2280 sometime this coming and then continues its sell off to test its AUL around 2270.

My Plan

The latest chaos created by the US administration could escalate and cause a minor sell off this coming week.  If there is no selling of individual stocks, then the upcoming sell off would be a good buying opportunity.  My plan is to do my first buy of three in SPY.


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.
on

Sunday, January 22, 2017

A Sell Off Is Likely This Coming Week

SGS_LT Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS_LT is a Long Term (weeks to months) Timer
Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)

All major indices have now broken through their AUL's and trading below them. Chances are good that we see a significant (5% to 10%) sell off starting this coming week.

Long Term Outlook


Longer term, chances are good for SPX to sell off to tests its DTL-W around 2230 sometime this coming and then continues its sell off to test its PUL-2 and price support around 2190.

Short Term Outlook

Shorter term, chances are good for SPX to sell off to tests its 50 D-SMA around 2250 sometime this coming and then continues its sell off to test its 100 D-SMA around 2200.

My Plan

I'm watching the sell off to see if Big Money unloads any of his long equity positions. If there is no selling of individual stocks, then the upcoming sell off would be a good buying opportunity.


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.
on

Monday, January 16, 2017

A Classic Case Of "Buy The Rumor - Sell The News"?

SGS_LT Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS_LT is a Long Term (weeks to months) Timer
Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)

The rumor is that the Trump presidency is going to be great for the US stock market.  He and the Congress are going to get rid of tons of regulations, give everyone a substantial tax cut, create millions of new jobs, pure billions if not trillions of dollars into our military and infrastructure, balance the budget and reduce the national debt.  The news might be that the new administration would find itself drawn into many controversies, scandals, conflicts and become totally paralyzed.

Longer Term Outlook
Chances are good that SPX sells off to test its 13 W-EMA (W-DTL) sometime this coming week.  A close below W-DTL this week would signal a high likelihood of trend line (PUL-2) and price support around 2180. 

In all minor sell offs since the election, I have not seen any signs that Big Money was unloading his long positions in equities.  I wonder if that is going to change after Trump takes the White House.  If Big Money hangs on to his long equity positions as SPX sells off to test supports, then the sell off would be a good buying opportunity.
 
My Plan

I'm planning to stay in cash and watch the action from the sideline for another week or so.


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.
on

Sunday, January 8, 2017

A New Bull Leg?

SGS_LT Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS_LT is a Long Term (weeks to months) Timer
Current Long Term Portfolio (2017)
Past Long Term Portfolios (2008-2016)

Is this the beginning of a new bull leg?  I don't know, I am going to wait and see how indices and stocks behave in a sell off which should be coming our way soon.

I'm planning to include my usual charts and analysis in my weekly post very soon.  Still trying to recover from the shock of the election and rally since the election :). 

My Plan

For now I'm staying in cash.


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.
on

Sunday, December 11, 2016

Indices Are Overbought

SGS_LT Market Timer Status:  LONG 
LONG as of close of  November 11, 2016
SGS_LT is a Long Term (weeks to months) Timer
Current Long Term Portfolio (2016)
Past Long Term Portfolios (2008-2015)


My Plan

I'm still in cash looking for an opportunity to open long positions.  I'm taking the rest of the year off.  My plan to start posting on weekly basis in January 2017.

Seasons Greetings and Happy New Year.


SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

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.
on
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