$SPY – Bounce back to last week again

MARKET TIMING SIGNALS FOR 9/4/2019.

Long-Term Breadth (the NYSI): Buy DAY 5
Short-Term Breadth (the NYMO): Buy DAY 1
Price (the Nasdaq COMP): Buy DAY 1
Volatility (the VIX): Buy Day 1
Nifty-50-Stock-List: 23 BUYS, 12 NEW BUYS, 11 OVERBOUGHT; 27 SELLS, 2 NEW SELLS, 6 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 30, Rising, FEAR LEVEL.
Bellwether Stocks: 14 UP, 1 DOWN.

WHAT?

The market had a strong advance today taking it once again to the top of its free-swinging month-long consolidation.

It seems like I have written this post three time now. Seems like? I indeed have.

See $SPY up against a high wall and ready to rise and $SPY – From Friday to Friday to “deja vu all over again” below.

In other words, we’ve hads a whole lotta bouncing around going nowhere.

WHAT NEXT?

Short-term breadth (the NYMO) has been making choppy lows above lows since it bottomed August 2nd (see the black line in the middle section of the chart below) and the all-important NYSI has been rising now for five days.

Taken together those indicators make it appear SPY is about to break above its overhead resistance at 293/294 and move to the recent high around 300 on this up swing, but the ETF has appeared perched to do that twice before this month and still hasn’t done it.

I would think another turn down would be most discouraging for the short-term bulls and might bring a harder sell off.

But I don’t think that’s going to happen (I know…just as soon as it’s said it won’t, it will).

The Fear and Greed Index is gradually making it’s way higher. My nifty-50 stock list had 39 stocks on buy last time SPY took a look at this high wall of resitance, but now the list has only 23 stocks on buys, giving room to move to the upside. VIX turned down today to add another short-term indication there can be follow through to the upside.

Unless President Twitterdumb intervenes again, I think this time SPY goes higher probably for the rest of the week and taking the general market with it. But I will day trade Friday’s SPY puts if it doesn’t.

(click on the chart for a larger view)

#MarketTiming – Long-term breadth says sell the rally

MARKET TIMING SIGNALS FOR 7/18/2019.

Long-Term Breadth (NYSI): Sell DAY 1
Short-Term Breadth (NYMO): Sell DAY 3
Price: Sell DAY 2
Nifty-50-Stock-List: 13 BUYS, 1 NEW BUYS, 4 OVERBOUGHT; 37 SELLS, 11 NEW SELLS, 12 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 46, falling, NEUTRAL LEVEL.
Bellwether Stocks: 6 UP, 9 DOWN.

WHAT?

The market took the tumble that been brewing for the past couple of days.

First short-term breadth turned down after a sequence of highs below highs, then price triggered a sell on today’s open, and now long-term breadth has given a sell signal for tomorrow’s open.

That last part is the most significant. Long-term breadth (the NYSI) is the primary context behind the entire market. If it is going up the bulls have the ball, if it is going down the market will tumble too. Maybe not right away — it can whipsaw like anything else, but if it keeps going down most stocks will follow.

Technically the sell signals are on tomorrow’s open but at today’s close this upswing, which began on the open of 6/28 (13 trading days ago), took TQQQ up 8.2%, UPRO up 5.1%, FNGU (the FANG ETF) up 12.4% and TNA remarkably was flat. Among notable stocks TSLA advanced 15.1%, SHOP 7.3%, TWLO 6.1%, WYNN 99%, FB 5.9% and AAPL lagged at up 2.3%.

The Nifty-50-stock-list was a mixed bag with as many stock down double digits as those up double digits. In retrospect that was probably a read on the raggedness of the rally.

However, INS, the number-one stock on the list coming into the upswing vaulted a spectacular 49.4%.

Interesting to note the divergence that registered on the overbought Fear-and-Greed Index, kept by CNN Money, called the exact top two days ago in SPY and in QQQ (see the chart below) and was telling across the board.

WHAT NEXT?

With the NYSI declining, one can only assume swing traders will be looking for short entries, options traders playing puts predominantly (see the post below), and long-term investors should tighten stops to their individual risk tolerance or just hold their breath and hope not to die.

Of note: NFLX after the bell reported earnings, a shortfall in expected subscriptions, and is getting clobbered in overnight trading. That may set a tone for trading tomorrow. Intriguing how often news comes along from somewhere to agree with the NYMO/NYSI breadth indicators.

Nothing much more to say. The market will go down until it doesn’t, and granted, that could be even as early as tomorrow. The VIX remains below 15, which is a bullish level indicating this is likely a pullback and not a serious correction.

(click on the Fear-and-Greed chart below for a larger view)

$SPY – trudging higher but watching for a reversal day

MARKET TIMING SIGNALS FOR 7/16/2019.

Long-Term Breadth (NYSI): BUY DAY 12
Short-Term Breadth (NYMO): Sell DAY 1
Price: BUY DAY 2
Nifty-50-Stock-List: 20 BUYS, 4 NEW BUYS, 13 OVERBOUGHT; 30 SELLS, 4 NEW SELLS, 11 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 57, falling, GREED LEVEL.
Bellwether Stocks: 11 UP, 4 DOWN.

WHAT?

The market moved sluggishly higher today.

In the case of SPY it was five days in a row, and except for a minor blip in the middle of the advance, TQQQ would be the same. SPY, by my measure, has been overbought for three trading days, which is often all she wrote, but not always.

During this entire move up, my nifty-50 stock list has never had more than 25 stocks on buys. The last time I saw above thirty was two weeks ago (37 on 7/1). Those stocks are trudging through a muddle. That might or might now mean something. Notably TNA, the 3xLeveraged ETF for the Russell small caps has gone nowhere.

Still SPY has managed to make new all-time highs, which is either ragingly bullish, or it’s about to die on the first down day.

WHAT NEXT?

Let’s consider that first day down for a moment, especially since short-term breadth, which has been putting in highs below high (see chart below), turned down today with SPY overbought and up five days in a row (see this many times before a dip).

Trader Vic Sperandeo noted one time that any time a major index goes four or more days in one direction at the end of an intermediate advance or decline the first reversal day is the change of trend. Trouble is I don’t think he ever quite defined what constitutes an intermediate advance or decline. One can look at charts and see he has been right again and again and again but then there is that one time…and that one time can kill anyone who doesn’t play defense. This advance is essentially five weeks old with a minor drop in the middle, projected here in this post below :#MarketTiming – a black candles Thursday leading to….

In addition SPY ended the day in a black candle. The black candle makes today’s high (301.13) and today low (300.19) key numbers, above the former there more rally to come, below the latter a dip to the downside, a easy read of price action. Those highs below highs on the NYMO (again see the chart below) are a warning. There is a divergence in CNN Money’s Fear and Greed Index not confirming the new highs. There’s the Russell stall so far… These things are beginning to pile up.

Five weeks of solid gains may not be the end of the upswing but it is worth guarding against Trader Vic’s “first reversal day.”

All that aside. until long-term breadth turns down, the long side will remain the side to play. Dips are to be bought in the indexes, the ETFs, stocks. Eleven of my bellwether stocks were up today with decent gains, see AAPL, TSLA, SHOP, BABA as examples. So there is still strong buying in big names, which is probably the place to focus most trades.

It always sounds stupid with one says it but it is the one simple, absolute truth — the market will go up until is doesn’t.

(click on the chart for a larger view)

#MarketTiming – a black candles Thursday leading to…

MARKET TIMING SIGNALS FOR 6/21/2019.

Long-Term Breadth (NYSI): BUY DAY 11
Short-Term Breadth (NYMO): BUY DAY 4
Price: BUY DAY 3
Nifty-50-Stock-List: 36 BUYS, 9 NEW BUYS, 28 OVERBOUGHT; 14 SELLS, 6 NEW SELLS, 0 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 473, rising, NEUTRAL LEVEL.
Bellwether Stocks: 13 UP, 2 DOWN.

WHAT?

The market gaped higher again Thursday and for the most part finished higher but…

But most indexes, ETFs, stocks closed below their opens creating black candles on their charts (see the charts below). Black candles are obvious times of indecision springing up oftentimes at the end of up swings.

The three major leveraged ETFs – TQQQ, UPRO, TNA – ended the day black. Seventeen of the stocks, more than a third, of the nifty-50 stock list ended in black candles. Thirteen of the 15 bellwether stocks — AAPL, FB, NFLX, GS, AMZN, SHOP, etc. – were up on the day but fourteen of them ended in black candles.

WHAT NEXT?

As noted before black candles create an easy read for traders as the obvious indecisiveness resolves itself- above the high of the candle, the rally resumes, below the low, it falls back. It’s that simple.

With this much indecision going around, and with the current swing up thirteen days old, and with 28 of the nifty-50 stocks overbought, and with all but three of the bellwether stocks overbought (and the other three already on sells), almost needless to say, it could be time for at least a dip, if not a solid drop.

(click on the chart panel for a larger view)

$SPY – Federal Reserve gives the market a yawn

MARKET TIMING SIGNALS FOR 6/19/2019.

Long-Term Breadth (NYSI): BUY DAY 12
Short-Term Breadth (NYMO): BUY DAY 3
Price: BUY DAY 3
Nifty-50-Stock-List: 33 BUYS, 5 NEW BUYS, 26 OVERBOUGHT; 17 SELLS, 6 NEW SELLS, 2 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 43, falling, FEAR LEVEL.
Bellwether Stocks: 13 UP, 2 DOWN.

WHAT?

All in all a pretty boring day in the market.

FED left interest rates unchanged, but suggested rates may be cut later in the year. Reportedly the vote, was eight to sit, eight to cut, one to raise.

Tweeted this early in the day and it pretty much held true all the way to the close:

WHAT NEXT?

As long as the NYSI keeps rising, the market context remains bullish.

Yawn.

$SPY – Runs up on a tweet into the FED…

MARKET TIMING SIGNALS FOR 6/19/2019.

Long-Term Breadth (NYSI): BUY DAY 11
Short-Term Breadth (NYMO): BUY DAY 2
Price: BUY DAY 2
Nifty-50-Stock-List: 34 BUYS, 14 NEW BUYS, 26 OVERBOUGHT; 16 SELLS, 1 NEW SELLS, 1 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 44, Rising, FEAR LEVEL.
Bellwether Stocks: 13 UP, 2 DOWN.

WHAT?

The Market ran up today when President Trump tweeted that he and President XI would be meeting at the G-20 conference (like they weren’t going to?) and would discuss the tariff tensions between the US and China. Then it stopped for the day when a Chinese spokesman shortly after basically declared the victory and planned to have no more than lunch with Ding-Dong.

Now there’s a fundamental for you?!

Oh, and it also came out that Trump wanted to fire the head of the Federal Reserve. On the first day of the FOMC meeting that news breaks!

Used to be this kind of uncertainty and instability would tank the market but evidently not now, or at least not yet.

OF PARTICULAR NOTE TODAY:

Stocks followed through another day with more strength to the upside – 26 of the nifty-50 list are now overbought, and 12 of the bellwether stocks up on the day.

NVDA calls led the options day trade with an 82% gain, AAPL ITM calls were up 38%, BABA ITM calls up 26%, and finally the SPY calls also joined the rise, up 52%.

WHAT NEXT?

Tomorrow is a FED day, with the Federal Reserve Open Market Committee making known its policy on interest rates. Any thing can happen in reaction to the FED decision, but given the market is in a positive upswing, tomorrow should be more of the same bullishness no matter what the FED does.

Unless one is an investor, this is a day to sell into the FED if the market’s rising and buy if it is falling. The aftermath for the rest of the week will matter more.

#MarketTiming – Oversold and very close to a bounce…

MARKET TIMING SIGNALS FOR 5/13/2019.

Long-Term Breadth (NYSI): SELL FROM 5/6.
Short-Term Breadth (NYMO): SELL FROM 5/13.
Price: SELL FROM 5/13.
Nifty-50-Stock-List: 9 BUYS, 0 NEW BUYS, 2 OVERBOUGHT; 41 SELLS, 14 NEW SELLS, 30 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 32, FALLING, FEAR LEVEL.
Bellwether Stocks: 0 UP, 15 DOWN.

OF NOTE SPY OPTIONS:

In a very bearish trading environment, today was a put day (see post below) with the in-the-money at the open 284 put rocketing to a 144% gain at its peak and registering through a chop at the end of the day a 76% gain. That final gain is if one was not paying attention, but obviously there were profit taking points all during the day – as it gained 100%, coming off the top for 121%, selling on the first blue-bar sell signal for 90% (see the chart in the post below).

WHAT:

Today’s market action was again news driven as the US-China trade talks broke off Friday with Trump escalating the pressure with a jump in tariffs on many Chinese imports from 10% to 25%, then tweeting over the weekend several threats to make it worse.

Finally, China retaliated with $60B in tariffs on US products, most farm products in the heart of Trump’s voter support. Sixty billion is not that much on its face but in the scheme of things it was a sign China is not going to, as some Trump supporters were claiming, “bend a knee.”

With an all-out trade war getting closer and closer to a real possibility (don’t these guys ever read history?) it was inevitable the US market was going to take a big rip.

On a technical note, except for a one-day up blip on 5/3, the long-term breadth, as measured by the NYSI, has been been falling since 4/17 (see the red vertical line on the chart below). Since that time, the market managed to trudge higher but the indexes are all now below the level they were at when the NYSI turned down. In other words never bet against the NYSI. It sometimes takes a while but it most often wins in the end.

In a previous post on the this pullback, I said: “If the market focuses more and more on the Trump administration turmoil in Washington, it is likely to unstable for some time.” That still is the what’s what.

WHAT’S NEXT?

However, for now, it is time for a bounce. It may not come Tuesday (a “turnaround Tuesday”?) but it is very close by.

The market can go down as long as it wants but not forever.

At this point SPY is down seven of the past nine trading day, the nasdaq down eight of the last ten. Short-term breadth, the NYMO, is deeply oversold. VIX has moved from the “12s” to 20 in the same amount of time. It’s getting to be too far, too fast, which always leads to a quick bounce. Except for QCOM, all the bellwether stocks are sells and were flushed to oversold with big drops in the indexes today.

In addition, my nifty-50-stock-list has 41 stocks on sells and 30 individual stock on the list oversold. Forty or more on sells is oftentimes the beginning of the end, if not the end, of a downswing.

I’m not one for Fibonacci numbers because like all support and resistance indicators they are notable only as long as the market doesn’t slice right through them (which it often does), but they are sometimes fun to take a look at and right now it appears SPY is sitting on one on a retrace of the rally from December (see the chart below). Supposedly that’s as good a spot as any for a bounce to begin.

(click on the chart for a larger view)

$SPY – the slide from the top continues…

MARKET TIMING SIGNALS FOR 5/8/2019.

Long-Term Breadth (NYSI): SELL FROM 5/6.
Short-Term Breadth (NYMO): SELL FROM 5/6.
Price: SELL FROM 5/6.
Nifty-50-Stock-List: 18 BUYS, 3 NEW BUYS, 7 OVERBOUGHT; 32 SELLS, 1 NEW SELLS, 16 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 41, FALLING, FEAR LEVEL.
Bellwether Stocks: 5 UP, 10 DOWN.

OF NOTE SPY OPTIONS:

SPY CALLS AND PUTS, BOTH, were down on the day as a tight sideways chop all day slammed premium for Friday’s expiration on both sides of the market. (See the charts below for how bad it was.)

The most nimble of options traders could make money, at great risk, buying the yellows And selling the blues on the charts below, but not much. The not-so-nimble could lose a lot.

WHAT:

It appears the market has been moving on Trump tweets. That is as absurd as it can get since he should not be tweeting about any of this and the market shouldn’t be paying any attention to any thing he tweets. The New York Times broke a story on ten years of his tax returns during a time he lost more than a billion dollars, all of the money his father gave him a lot more. Surely, one of the worst businessmen in history but a major-league con-man. His beloved Twitter has hung #BillionDollarLoser on him.

If the market focuses more and more on the Trump administration turmoil in Washington, it is likely to unstable for some time.

WHAT’S NEXT?

All sell signals remain in place – as usual this is a market can can go down as long as it wants and turn up any time. That sharp drop in the calls and the rise in the puts in the last twenty minutes of the day on the 10-minute charts below may hint there is more downside to come right away tomorrow but news, like a trade deal with China, can intervene.

This is a dangerous time for short-term traders. On the longer term, every bear market begins (or resumes) on a single down day and that day was six days ago to start this current slide.

(click on the chart for a larger view)

$SPY – market tries to reverse Trump tariff sell-off

MARKET TIMING SIGNALS FOR 5/6/2019.

Long-Term Breadth (NYSI): SELL FROM 5/6.
Short-Term Breadth (NYMO): SELL FROM 5/6.
Price: SELL FROM 5/6.
Nifty-50-Stock-List: 27 BUYS, 4 NEW BUYS, 13 OVERBOUGHT; 23 SELLS, 11 NEW SELLS, 5 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 56, FALLING, GREED LEVEL.
Bellwether Stocks: 1 UP, 14 DOWN.

OF NOTE SPY OPTIONS DAY TRADES:

SPY CALLS, 5/6 288 UP 71%, 290 UP 120%, 291 up 190%. No put trades.

OF NOTE
:
Fourteen of the bellwether stocks (AAPL, TSLA, NFLX, TWLO, AMD, NVDA, QCOM, GS, GOOGL, BABA, MSFT, FB, FSLR, AMZN) were up from the open although down on the day; and one (WYNN) was both down for the day and down more from its open.

WHAT:

The futures market sold off hard overnight on the news Trump threatened new tariffs on Chinese imports, then rebounded immediately at the open on the news that the Chinese negotiators planned to come to the U.S. to talk as planned anyway. The market was poised to go higher, prior to Trump’s announcement but the news cut short the buy signals across the board on Friday’s gains.

Can’t do anything about news, either positive or negative, except to go with the flow as it unfolds – in this case for day and swing traders it was a buy on today’s open and turned out to be quite a remarkable bounce back. Fourteen of the bellwether stocks were up from the open despite remaining down for the day. The $10K day trading system, had today’s 290 calls (in the money, ten minutes into the market) up 120% or the day, and just out of the money 291 call up 190%.

WHAT’S NEXT?

All technical signals I follow gave sell signals today for tomorrow open as the one-day blip up in long-term breadth ($NYSI) Friday retreated today on the tumble in short-term breadth ($NYMO); the price buy for today’s open, which racked up 4.5% on TQQQ and 3.7% on UPRO on the close, will be a sell on tomorrow’s open. In addition, CNN’s Fear and Greed Index dipped today while still at a greed level, and volatility surged (VIX), both negatives for the market.

Sell signals are sell signals but what’s next is tricky given the velocity of today’s rebound (see the candle on the SPY chart below), but it did not quite reverse completely and it may have used up immediate buying power to get to where it got on the close. If so, chances are it reverses again to the downside tomorrow. The key will be play the open, preferably with either calls or puts, while looking to lock in profits on today’s gains on TQQQ and UPRO and any of the bellwether stocks.

(click on the chart for a larger view)

#MarketTiming Signals

THE SIGNALS AS OF 4/8/19.
Long-Term Breadth (NYSI): BUY FROM 4/1.
Short-Term Breadth (NYMO): SELL FROM 4/8.
Price: BUY TQQQ FROM 4/1 UP 6.2%; UPRO FROM 4/1 UP 4.3%; TNA FROM 4/1 UP 5.4%
Nifty-50-Stock-List: 20 BUYS, 1 NEW BUY, 10 OVERBOUGHT; 30 SELLS, 7 NEW SELLS, 8 OVERSOLD.
CNN “Fear and Greed” Index: 74, GREED LEVEL.
Bellwether Stocks: 9 UP, 8 DOWN.

OF NOTE:
$10K Swing Trade SPY options: 282 APRIL IN-THE-MONEY CALL UP 59.2%; 284 APRIL AT-THE-MONEY CALL UP 75.2%.

See charts below.

$10K Swing Trade Stocks: WYNN is up 22.4% from 3/29; FSLR is up 8.4% from its price buy signal 3/29; AMD was a sell on today’s close up 8.2% from its price buy 4/1.

WHAT’S NEXT?
The SPY is up eight days in a row and the NYMO turned down today. Seen that many times before. There is a profit-taking dip coming…any day, any hour, any minute. But as long as the NYMO and/or NYSI remain positive overall the play is to be long, take profits when the stocks give sell signals, and buy coming out of dips.

However, for now, AAPL is up nine days in a row, which is reminiscent of previous runs in the bull market in which AAPL almost single-handed dragged the market indexes higher. It closed today at 200 and has a market-cap again approaching $1 trillion. The company has lots of cash and is no doubt buying back its stock again. That’s great for those who buy and hold but one day the buy-backs will end. A trillion dollar market-cap is not a jumping-in point to go much higher. On the last swoon, the stock dropped into the 140s, a great place to get back in after either taking profits shorting the stock above $200. For swing traders, doesn’t it seem obvious the selling or shorting opportunity knocks again?

(click on the charts for a larger view)