Tuesday in the $10K day Trade…Final 10% gain

Tweeted this trade near the highs of the day. SPY 280 Call, Wednesday expiration, up 38%. TQQQ at the time was up 1.5% ($1500 per $100K).

This was a display of a day trade based on the suggestion (see post below) that Tuesday after three days down in the Nasdaq (two of them hard down) would bounce today with an entry into the trade near the open.

Some defense (like a trailing stop) had to be played to lock in gains intraday since once again with long-term breadth still negative there was the possibility of another fade into the close, which happened. Still (see chart below), the SPY trade netted 10% for the day, and TQQQ added another $450 on its $100K buy.

Not a bad return for the day even if the defense stayed on the bench.

Tomorrow, AAPL will be the focus of the day for the general market. The company reported earnings after the close today and rose eight points in the after-market to an new all time high. The question will be can it vault the market higher for the day or will this be a “sell the news” time?

(click on the chart for a larger view)

#MarketTiming $QQQ – tomorrow the bounce…

After three days down in the Nasdaq, two of them hard downs, it is very likely time for a bounce tomorrow.

All of my bellwether stocks, as suggested yesterday (see posts below), followed through with losses today, led by NFLX down 5.5%. With the exception of AAPL and GOOGL they are all oversold. In addition forty of my nifty-fifty stocks are on sells with 34 of those oversold. Forty or more sells usually means we are at the bottom or the beginning of a swing bottom before a bounce.

Most likely he Nasdaq Composite Index has gone down too far too fast (see chart below). Focus on the chart and note that each time the blue histogram pierces the green lines, what happens next is a bounce, sometimes a substantial bounce. That is the most compelling technical case for timing a bounce for tomorrow. Also note if there is a bounce, it will likely not be a bottom. Bottoms and subsequent rallies come after retests.

This time could be an exception of course since the market can do anything it wants any time it wants but for now, I’m watching tomorrow open primarily for some play on the long side.

(click on the chart for a larger view)

Monday in the $10K day trade FINAL gain 76%

SPY 282 put, expiring today. Final day’s gain 76%.

“THE FOOL’S GAME”

#MarketTiming – a surge that falters…

A couple of weeks ago as long-term breadth turned up in the midst of an on-going bull market suggested that the bellwether stocks that have so long mattered would move up again.

That didn’t happen.

My “bellwethers” are TSLA, NFLX, AMZN, GOOGL, TWTR, BIDU, AAPL, FB, NVDA, BABA.

Long-term breadth turned down the next day and scattered the bellwether cluster — some up, some down, some going huh, what’s happening. Four days later they again tried to rally (see the chart panel below) but Friday they were hit harder than ever. With exception now of AMZN, they are all falling apart, led by the 20% disaster in FB and now the equivalent in TWTR. This usually does not happen in bull markets.

Chart by chart they look vulnerable to more decline. If they follow through to the down side this coming week, one will have to question if this is still a bull market or is the bear market beginning to emerge.

(click on the charts for a larger view)

#MarketTiming – bellwether stocks to surge again…

After a three-day pause in long term breadth it appears the bull market is ready to move these stocks up once again.

What to look for right now?

Buys on the open tomorrow (Friday) for a bullish surge into the weekend with the likelihood this continues for a time next week.

My “bellwethers” are TSLA, NFLX, AMZN, GOOGL, TWTR, BIDU, AAPL, FB, NVDA, BABA.

Notice most of the stocks have been in consolidations for the past week or so (see the chart panel below). Some are in clear bull flags – NVDA, TSLA — while others simply remain in strong up trends – AMZN, GOOGL, FB. Since stocks generally move with the market, and the mass psychology of the market is again bullish after a pause, I expect most of these to move up more now.

For gamblers looking for the quick bounce — NFLX!

(click on the chart panel for a larger view)

$SPX $SPY – walking the edge of the long-term cliff…

As we end another month and the first half of the year, I thought I’d take a quick look at a long-term monthly of chart of the SPX/SPY, the S&P 500 index and its primary ETF.

Someone (probably the great trader, Linda Raschke) once said if the short term is confusing in the stock market just back to a longer term view and all will become clear.

So what is clear in the here and now?

The bull market is still in progress (see chart below) although that progress has been stalled for this year to date.

The current upswing is completing a three-month rally so a sell-off could come any day now.

The technical indicators MACD and CCI are lagging, setting up as in the past (see the red rectangles on the chart) for a possible sell-off. But at the moment the pattern this time is not complete.

If the SPX had closed lower this month than it closed last month and its volume finished higher than its volume last month, I’d have to say the sell-off is likely right now. But that didn’t happen.

Obviously, the market in general is walking along a cliff (see the blue trend lines)… But until it falls off that doesn’t matter.

So is it going higher? I hate to but I have to shrug on that. Could be but with that cliff edge so close better to be be alert, and best to put in place some protections like trailing stops on any long-term investments.

Buying this? Okay, it remains a bull after all. But, me thinks, only for the short-term while standing every day next to the exit door. If the market charges higher, the short term will have you in, and if it goes screaming lower the short term will take you out.

(click on the chart for a larger view)