Yesterday my swing signals for Price, Breadth and Volatility were all on sells. The market went up. Today the signals (see below) have swung again to buys. Across the board.
I’m assuming the market is going up tomorrow.
But the indexes are overbought and the internals are falling apart. Something has to give, sometime…
Sometime, needless to say, is an awfully vague term.
If this sounds like I have no confidence in these signals I don’t intend it to. They are reliable for swing trading. XIV, for instance, is up 67% year-to-date on the Price signal, up 55% on the breadth signal and 80% on the volatility signal (appropriately). See the chart panel below – from left to right Price, Breadth, Volatility.
It’s the market, at this point, going up and up and up relentlessly that bothers me. We’ve seen this before and it’s great while it lasts but it is not, in the end, going to be different this time.
SWING TRADING SIGNALS:
LONG-TERM BREADTH: Sell (Day 17).
PRICE: Buy. (Day 1).
SHORT-TERM BREADTH: Buy. (Day 1).
VOLATILITY: Buy, (Day 1).
SPY CLOSE – 259.11
QQQ CLOSE – 176.24
CNN MONEY’S FEAR AND GREED INDEX: (54, falling, neutral level).
NIFTY-50 STOCK LIST: 23 Buys; 11 Overbought, 6 Oversold, 5 new buys today, 7 new sells.