$SBGL – Updating the hold on the gold stock…

It’s been a long, slow slog since the buy signal on the open of 9/29, nearly a month ago, but SBGL, the little gold stock that sometimes goes nuts (meaning it can double on a swing), is still slogging to the upside.

This is an update of this post:

Divergences don’t matter until they do Part II

SBGL is up 14-plus percent despite sell offs this month in GDX, NUGT, and JNUG.

Still long (it can still double…), but moving stops to insure a profit.

(Click on the chart for a larger view)

#MarketTiming – as breadth goes, so goes…Part II

This time short-term breadth.

The market indexes today were mixed – the Dow up again, moving through its bubble, SPY up a little, IWM up a whisper, Nasdaq down a touch. Like a lot of days lately (actually nine out of last 15), it made its move on the open then chopped all day until in the end it has essentially flat-lined for the rest of the day. No big deal and kind of boring.

All four of my end-of-the-day signals came into the day on sells. So swing traders would be either short or in a bull market in cash, watching for the next upswing. This is obviously a bull market. Those swing signals, including the important long-term breadth, remained on sells today except for one.

Short-term breadth gave a buy signal on the close today.

How many times has the market made a move to oversold on short-term breadth and turned up by itself to signal a bounce? As a matter of fact, every time this year a bounce became a swing became a rally.

And once again a bounce is guaranteed tomorrow on earnings news as AMZN, GOOGLE, MSFT, INTC and FSLR (from my bellwether stock list) are surging in the overnight trading (see chart panel below). As can be seen in the QQQ chart (the chart in the upper left), and assuming no disaster strikes later tonight, the Nasdaq is going to gap up madly tomorrow, and probably take the rest of the market with it.

If it doesn’t turn up long-term breadth in a timely fashion, this bounce will be suspect (unlikely but it could sell off right from the open tomorrow). But for now a bounce is a bounce is a bounce…

SWING TRADING SIGNALS:

PRICE: SEll. (Day 2).
SHORT-TERM BREADTH: Buy. (Day 1).
VOLATILITY: Sell, (Day 4).

CONTEXT:

SPY CLOSE – 255.62
QQQ CLOSE – 146.96
LONG-TERM BREADTH: Sell (Day 8).
CNN MONEY’S FEAR AND GREED INDEX: (71 falling, greed level).
NIFTY-50 STOCK LIST: 18 Buys; 8 Overbought, 18 Oversold, 10 new buys today, 5 new sells.

(click on the chart panel for a larger view)

#MarketTiming – as breadth goes so goes…

The long-term breadth indicator I use, which is the McClellan Summation Index, turned down last on 10/17 giving a sell signal for the open of 10/18. Utilizing the New York Stock Exchange advance/decline stock line, one of the broadest measure of market movement there is, it has been, and continues to be, one of the best reads on market direction. Maybe the best.

It defines the market’s longer-term trend.

So what has happened to stocks since the market’s sell signal (or short signal)?

Just some examples (see the chart panel below) – of the 10 stocks on my bellwether stock list, as of today’s close, nine are down, led by TSLA with a 9.1% short profit and BABA with a 5.1% profit. Nine stocks down. In seven trading days.

(click on chart for a larger view)

#MarketTiming – is October turning into October after all?

If the general market keeps rising while long-term breadth keeps falling, more often than not, the market is running on empty.

This bull market has been trending so relentlessly up that it has been defying that notion and may again but today it did not.

The all-important long-term breadth signal I use has been falling for seven days and the Dow and S&P have continued to advance, getting to a point yesterday when it looked like once again this bull market would defy even its own narrowing internals. Heard a lot of “bullish forever” talk yesterday. Today’s pull-back is not that much but, given that any drop lately has been surprising, one must once again say this may be the one that drops the market of the sky like a clay pigeon.

My swing trading signals (see below) are all again on sells in sync with long term breadth. CNN Money’s Fear and Greed Index put in a lower high, setting up a divergence with SPY, and downtrend pattern of its own. If these continue, and one can only assume they will until they don’t, the market may finally have a real correction, five percent or more.

Wouldn’t it be ironic if everyone thinking bullish forever yesterday looked back to this week says “Wouldn’t you know it – again October turned out to be October after all.”

The Nasdaq (and the Russell for that matter) stopped advancing on the long-term breadth signal this week (see red-circle signal arrow on QQQ on the left chart in the chart panel below). And as the Nasdaq faltered so did many of its key stocks – see FB, BABA, and TSLA on the chart panel, all shorts.

SWING TRADING SIGNALS:

PRICE: SEll. (Day 1).
SHORT-TERM BREADTH: Sell. (Day 1).
VOLATILITY: Sell, (Day 3).

CONTEXT:

SPY CLOSE – 255.29
QQQ CLOSE –147.43
LONG-TERM BREADTH: Sell (Day 7).
CNN MONEY’S FEAR AND GREED INDEX: (75 falling, greed level).
NIFTY-50 STOCK LIST: 13 Buys; 3 Overbought, 17 Oversold, 2 new buys today, 11 new sells.

(click on the chart for a larger view)

#MarketTiming – the short-term rejoins the long-term…

My swing signals whipsawed all last week, reversing direction four times in five days, as the general market moved sideways with an upward bias.

Long-term breadth, which has been up three of those five days, pretty much accounts for the upward bias.

There are only four things that can happen trading in the stock market: a little win, a little loss, a big win, a big loss. A trade can do nothing about the little wins and little losses (that’s just the market fluctuating) but has to be able to eliminate the big losses in order to be in position to get the big wins. The trouble with whipsaws is they can pile up the little losses until they are, or at least feel like, a big loss.

So what now?

Since one always wants to be on the side of the trend, which is defined by long-term breadth, this latest short-term upturn in the swing signals basically says this leg on the whipsaw has to be followed long. Everything is again in the buy column (see chart below).


SWING TRADING SIGNALS:

PRICE: BUY. (Day 1).
SHORT-TERM BREADTH: Buy. (Day 1).
VOLATILITY: Buy, (Day 1).

CONTEXT:

SPY CLOSE – 254.95
QQQ CLOSE –148.34
LONG-TERM BREADTH: Buy (Day 4).
CNN MONEY’S FEAR AND GREED INDEX: (73 falling, greed level).
NIFTY-50 STOCK LIST: 27 Buys; 18 Overbought, 5 Oversold, 9new buys today, 7 new sells.

(click on the chart for a larger view)

$BABA – covering the short…

Closing this trade posted here:

THE BABA SHORT ON REDDIT

Took the trade because it was up nine days in a row and really for no other reason. Watched for weakness near the open on the 10th day, and shorted it, hoping to get at least a day trade.

Logged a bit more than a one percent scalp on the first day (yesterday) for half the position and now covering the other half for close to a three percent gain, which I suspect is about all one can reasonable expect on a trade against trend. In other words, cashing out this trade for the week.

Believe BABA will take another run to the upside next week.

(click on the chart for a larger view)

What happens when stocks don’t rise with the market?

On the next market downturn, they usually get crushed.

Don’t quite have the market signals yet to the call completely for a downturn but looking ahead several stocks on my bellwether stock list have, so far, not quite rallied with the market’s recent rally. They are probably the wounded in the herd.

These are the stocks I am watching for shorting possibilities when the market timing is right, if and when the market weakens (see the charts below): AAPL, TSLA, FSLR and GS.

AAPL, as liquid as its options are, might be a worthwhile put play.

By comparison, consider how the other stocks on the list have done since the market upswing began in late September – AMZN up 5.3%. BID up 7.9%, FB up 4.1%. BABA UP 6.3%. NFLX, up 8.1%, NVDA up 9.3%. All these returns are in the last couple of weeks or so, and they are what swing trading is all about.

(click on the chart for a larger view)

The information here and throughout this site is presented for entertainment purposes only and should not in any way be construed as trading and/or investing advice.

#MarketTiming – will this be the one?

Another warning for a market pullback to come.

Again, all three of my swing signals on price, breadth and volatility have given sells. This is a whipsaw. Monday down on the signals, Tuesday up, Today down… Assuming there is no hard gap down tomorrow’s open when the latest swing up from Tuesday closes, some profits may be captured – XIV finished today up 2.5% for the three days, TQQQ up .45%.

So what now?

Short-term breadth (see chart below) turned down again, still in positive territory, but getting weaker with each rally. Long-term breadth continues to rise but these degrading short-term highs below highs have historically been a warning that should be heeded. There have been others recently noted here:

Warnings, warnings, warning…but…

Being a strong bull, this market has defied most of these warnings across the board but sooner or later something like August (see the chart), at least, is coming. Maybe it began today, maybe this is the one that triggers the dip, drop, the whatever…

In the meantime this is still a rally until it isn’t anymore.

SWING TRADING SIGNALS:

PRICE: SEll. (Day 1).
SHORT-TERM BREADTH: Sell. (Day 1).
VOLATILITY: Sell, (Day 1).

CONTEXT:

SPY CLOSE – 254.64
QQQ CLOSE – 147.77
LONG-TERM BREADTH: Buy (Day 3).
CNN MONEY’S FEAR AND GREED INDEX: (76 falling, extreme greed level).
NIFTY-50 STOCK LIST: 22 Buys; 14 Overbought, 5 Oversold, 7 new buys today, 7 new sells.

(click on the chart for a larger view)