Sunday, October 22, 2017

Indices Are Heading Much Higher

SGS  Market Timer Status:  LONG 
LONG as of the close of September 8, 2017
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must


On Friday SGS bucks its declining trend and headed higher, confirming the rally in all major indices.  With SGS above 50 and the market entering into a seasonally bullish period, chances of a significant correction is slim to none.


Q3 earnings and outlook have been pretty good.  Chances are high that SPX continues going higher in its well-formed price channel as shown on the weekly chart above. 

My Plan


Last Thursday SPY opened below its ASL and sold off to test its DTL shortly after the open. Then, SPY rallied and closed well above its ASL.  On Friday, SPY continued its rally and closed well above its ARL.  The rally on Friday and where SPY closed was significant because it rendered the bearish rising wedge and flag price formation invalid.

At this point, chances are high that indices continue their rally for the rest of the year.  My plan is to open my first (in SPY) of three long positions sometime Monday morning.


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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.
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Sunday, October 15, 2017

Indices Are Overbought, A Pullback Is Coming

SGS  Market Timer Status:   LONG 
LONG as of the close of September 8, 2017
SGS is a Long-Term (weeks to months) Timer


SGS declined all week, except for Friday.  Indices are overbought and chances of a pullback are high.


Again, Q3 Earnings and outlook set the path forward for the rest of the year.  Barring any major surprises, indices very likely continue their move substantially higher.  Pullbacks from overbought condition should be bought.

My Plan

I'm still waiting for an opportunity to open my first (in SPY) long position of three.  Hopefully, this coming week.


twitter
info@balancetrading.org

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.
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Sunday, October 8, 2017

Why Market Timing Is A Must

SGS  Market Timer Status:   LONG 
LONG as of the close of September 8, 2017
SGS is a Long-Term (weeks to months) Timer


 I time the market, I have been doing that for the last 20 years.  Why I time the market is clearly shown on the semi-log chart above that depicts the entire 55-year history of S&P 500.

$10,000 invested in S&P 500 55 years ago, would have been $325,867 on Sep 29, 2017 but the investor would have had to stomach more than 50% losses at least four times during that period.  Nearly all investors would have bailed at or near the bottom of those crashes.  More tragically, most investors would not have participated in the rally following each crash.

If the same investor had employed a timing system, investment results would have been substantially different as shown below:
  • No Timing (Buy and Hold): $10,000 in 55 years compounding at 6.6% and would have become $325,867.

  • Simple Timing: Exit early as a major correction (20% or more) starts with only 8% loss of accumulated amount.  $10,000 in 55 years would have compounded at 9.3% and would have become $1,330,788.

  • Advanced Timing: Short major corrections (20% and more) with 6% loss prior to shorting and a gain of 60% of each correction. $10,000 in 55 years would have compounded at 14.4% and would have become $15,579,111.
So what is an advanced market timer?  It is a trend-following timer with an optimized lag time with a minimized number of whipsaw.  Earlier this year I developed a new market timer that has those two required characteristics optimized by extensive back-testing.  I have been using the new timer in the last couple of months to time the market.


SGS advanced higher every day last week but on Friday it declined slightly, signaling a possible sell-off of this coming week. 


Q3 Earnings and outlook set the path forward for the rest of the year.  Barring any major surprises, indices very likely continue their move substantially higher.

My Plan

I'm still waiting for an opportunity to open my first (in SPY) long position of three.


twitter
info@balancetrading.org

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.
on

Monday, October 2, 2017

Indices Look Good

SGS  Market Timer Status:   LONG 
LONG as of the close of September 8, 2017
SGS is a Long-Term (weeks to months) Timer

Another busy weekend and I had no time to prepare charts and do my weekly analysis.  

My Plan

I didn't open any long position last week.  My plan is to open my first of three long positions sometime this coming week. I'm planning to buy SPY.


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.
on

Sunday, September 24, 2017

Indices Are Set To Go Higher

SGS  Market Timer Status:   LONG 
LONG as of the close of September 8, 2017
SGS is a Long-Term (weeks to months) Timer

It's been a busy weekend and I had no time to prepare charts and do my weekly analysis.  

My Plan

My plan is to open my first of three long positions sometime tomorrow. I'm planning to buy SPY.


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.
on

Sunday, September 17, 2017

3Q Earnings And Forecast Will Set The Path Forward

SGS  Market Timer Status:   LONG 
LONG as of the close of September 8, 2017
SGS is a Long-Term (weeks to months) Timer


SGS advanced higher and closed above its ADL last week.  That's highly bullish and signals that chances are good that indices continue their advance higher.


Major indices advanced higher every day last week. At this point, chances are good that major indices continue their advance this coming week. 

My Plan

Per my plan, I closed all SDS long positions last week. I'm going to watch the market this coming week and see how 3Q earning reports are shaping up.  I'm watching for any earning misses and pessimistic forecast.


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.
on

Saturday, September 9, 2017

A Volatile Week Is Ahead ... SGS Is LONG

SGS  Market Timer Status:   LONG 
LONG as of the close of September 8, 2017
SGS is a Long-Term (weeks to months) Timer


SGS is LONG as of the close of last Friday.


Last Tuesday SPX sold off and tested its W-DTL, chances are high that SPX would retest that support sometime this coming week. If W_DTL support fails and SPX closes below 2445 then SPX very likely would sell-off to test 2400.

My Plan

My plan to close my two positions in SDS sometime this coming week.


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.
on

Sunday, September 3, 2017

Critical Week Is Ahead ... SGS Is NEUTRAL

SGS  Market Timer Status:  NEUTRAL 
NEUTRAL as of the close of September 1, 2017
SGS is a Long-Term (weeks to months) Timer


SGS advanced last week, crossed its DTL and turned positive. SGS is NEUTRAL as of the close of last Friday.  If SGS remain positive and above its DTL by the close of this coming Friday, then it would turn "LONG".  

 The status of SGS changes only on a Friday in order to minimize "whipsaw" that is associated with a trend following timer.


Last Monday night when SPX futures were down 20 points, it looked like that all indices were in for an extremely ugly day on Tuesday and the start of a couple of weeks of heavy selling.  SPX gapped down at the open on Tuesday, it started to head lower, but then it rocketed back up and continued to rally for the next four days on the back of short covering and dip buying.

As of the close of last Friday, data below shows how far major indices have retraced their recent sell-off from their all-time highs:

SPX: 86% of its -3% sell-off
DJI: 76% of its  -3% sell-off
DJT: 51% of its -8% sell-off
NAZ: 96% of its -4% sell-off
RUT: 62% of its -7% sell-off
OEX: 85% of its -3% sell-off
NDX: 106% of its -4% sell-off

It is interesting that the two indices (DJT and RUT) that sold off the most have had the least retracement.  This is not indicative of a healthy bull market in my opinion.

My Plan

Per my plan, I opened my second and final position in SDS last Tuesday at the open.  Now that SGS has turned NEUTRAL, my plan is close my SDS positions sometime this coming week.  Should the battle of words between the two top narcissists of the planet earth escalate and indices start to sell-off significantly on Tuesday morning, I would keep my SDS positions.


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.
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