Since February 12th the stock market has been rallying strongly.
So what’s with these guys?
And to top it off, Bloomberg had an article this morning on CEO compensation at the biggest banks. Now we know where all the QE went.
(click on image for a larger view)
The chart below says it all.
The bid is at 25. For the past year, that has been the level that has reaped enormous rewards for swing traders. And now the 3x-leveraged ETF is once again heading there.
It will not surprise me if the market rally from February 12th ends on UVXY 25.
(right click on the chart for a larger view)
CNN Money’s Fear-and-Greed Index is, simply put, one of the most useful market-timing tools there is.
For example, the most recent rally, using the index as a trigger, bought the market on the open of February 16 (see the green vertical line on the chart below), a swing that has carried SPY, the SPX ETF, from 188 to 199 today, a gain of 5.3%, but more notably it has so far racked up gains for the 3x-leverage ETF of 17.4% in UPRO, 15.9% in the Nasdaq’s TQQQ, and a whopping 29.5% for TNA, the Russell fund.
That buy signal, now 18 trading days old, is still on and counting but …
But the Fear-and-Greed Index has now registered greed for seven days. Call it lucky or unlucky depending on one’s bullish or bearish point-of-view but seven days of greed is often all she writes on an upside swing (see the chart) before a sudden sell-down.
As they say, it could be different this time but…
But it seldom ever is.
(right click on chart for larger view)