#MarketTiming – slog to a stall…or a yawn?

MARKET TIMING SIGNALS FOR 7/17/2019.

Long-Term Breadth (NYSI): BUY DAY 13
Short-Term Breadth (NYMO): Sell DAY 2
Price: Sell DAY 1
Nifty-50-Stock-List: 23 BUYS, 10 NEW BUYS, 9 OVERBOUGHT; 27 SELLS, 7 NEW SELLS, 7 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 55, falling, NEUTRAL LEVEL.
Bellwether Stocks: 6 UP, 9 DOWN.

WHAT?

The general market stalled today, with small down day in almost everything – SPY, QQQ, the DOW.

Now the question will be, as suggested in yesterday’s post, is this little-bitty down the reversal day Trader Vic Sperandeo says can end an intermediate uptrend. Probably not, but it will not surprise me if one of these days this rally this year falls apart catching everyone in a yawn.

There was a good play in the SPY 301 at-the-money put (SPY opened at 300.65), expiring tomorrow, up 73%, but it was a wild chop for anyone who got it (I didn’t, probably because I was yawning too much).

WHAT NEXT?

On the three end-of-day signals I follow on TQQQ (see charts below), short-term breadth sold on the open today, my price system set up for a sell on the open tomorrow (buy the yellow, sell the blue), leaving only the all-important long-term breadth still long (the chart on the right).

The NYMO will have to drop through the zero line (the black line in the middle of the chart). Today it closed by my measure at 15 and appears to be working its way into a sell but what appears often disappears before triggering a real sell signal.

So for a true change of trend, it is still wait and see and be long in the meantime.

(click on the chart panel 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 – back to across-the-board buys…

MARKET TIMING SIGNALS FOR 6/14/2019.

Long-Term Breadth (NYSI): BUY DAY 6
Short-Term Breadth (NYMO): BUY DAY 1
Price: BUY DAY 1
Nifty-50-Stock-List: 18 BUYS, 5 NEW BUYS, 9 OVERBOUGHT; 32 SELLS, 1 NEW SELLS, 3 OVERSOLD.
CNN MONEY’S “Fear and Greed” Index: 39, RISING, FEAR LEVEL.
Bellwether Stocks: 10 UP, 10 DOWN.

WHAT?

The question in the last market-timing post here was the market due for a Stall or a Drop?.

With barely two days down in the indexes it appears it was merely a stall.

The nifty-50 stock list worked off its overbought condition during the week from 41 stocks on buys Monday (28 overbought) to 15 on buys yesterday. Buy signals in the list clicked up today to 18 on buys with only 9 stocks overbought.

WHAT’S NEXT?

Since long term breadth continues to climb, assume there will be more upside with an up day likely again Friday.

Of particular note: CNN’s “Fear and Greed” Index put in a low above a low today (see its chart below with the Nasdaq Composite) as it works its way higher. It is still at a “fear” level so there is more room to move up.

(click on the chart for a larger view)

#GoldStocks – talking trees when there’s a forest out there…

To state the obvious, most stocks move with the general market, and more obviously almost all stocks move like all stocks in their sector.

And this may be no more obvious than with the gold stocks.

I’m always surprised at the endless discussions of which gold stock to buy. Gold bugs, particularly, love this stuff — this one, or that one, or maybe that one. One stock picker or another has very good arguments for each of their choices, fundamentals, technicals, some buddy’s opinion, whatever, but they all ignore the obvious — they’re talking about trees when there’s a forest out there.

Take a look at the charts below.

Five of those charts are stocks and three are ETFs, but hide the symbols and company names for each chart and who would be able to tell which NEM and which GOLD, which is AEM and which is NUGT? The patterns essentially all look the same (like fir trees in a fir forest).

But actually they are not the same. I have the same swing-trading system on each of those charts. Now look at the numbers in the white flags on the lower left of each chart. Those are the total returns year-to-date per $100K committed to each swing trade (calculated also to easily show percentage gains for the system).

Obviously, there is a difference between the stocks and the ETFs. The leading stock in the sector, KL, is up 17%, while RGLD, lagging, is up only 1.4%; a prominent name like Newmont Mining (NEM) is up 14%. On the other hand, the leveraged ETFs, NUGT and JNUG, are both up 82% and even GDX, not leveraged, is up 25% – same time frame, same trading system.

The trading system here is not the point. It is just here to illustrate that too often traders and investors can’t, as they say, see the forest for the trees.

(CLICK ON THE CHART PANEL FOR A LARGER VIEW)

#MarketTiming – Stall or drop?

Been on vacation so haven’t been able to keep this blog as timely as I would like.

And besides, being in places where there was not even cell-phone coverage, I see I’ve missed a pretty sprightly rally. That’s the way it goes sometimes.

Anyway, TQQQ, my favorite leveraged ETF, is up 21% on the short-term breadth signal (the NYMO), six trading days ago. That signal triggering from double-bottom territory on the NYMO set the stage for the rest of the signals. Consequently, TQQQ is up 12% on its price signal and 8.3% on the long-term breath signal (the NYSI).

See the charts below — from left to right, short-term breadth, price, long-term breadth.

Since the rally’s start on the open of 6/4, other leveraged ETFs of note were SOXL (semiconductors) up 23.7%, FAS (financials) up 11.6% and FNGU (fang stocks) up 25.8%.

Gains among my be “bellwether stocks” were led by TSLA up 20%, coming from deeply oversold, AAPL up 11%, WYNN up 12.4%, SHOP (newly added to my list) up 14.4%, AMD up 14.5% and even a biggie like MSFT was up 9%.

Did I mention that we’re talking just six trading days, from Tuesday last week to Tuesday today? I guess I did. Six days, needless to say, that is what swing trading is all about.

So what now?

Both short-term breadth and price gave sell signals today with much of the market still wildly overbought. Likely we get a pullback starting tomorrow. Or at least a sideways stall to work off the overbought conditions. Note the big black candle of indecision today on the chart to the right. Below the low of that candle it’s a drop, above the high a resumption of the bounce.

If, by chance, this upswing was just more of the thrust from December to make everyone believe the bearish growl last fall was nothing to listen too, I suppose this rally could drop right out of the sky.

Either way, as long as the long-term breadth (the NYSI) is rising, the path of least resistance is up.

(click on the charts for a larger view)

#MarketTiming – tracks of the bear?

Sometimes, as they say, it’s not a stock market, it’s a market of stocks:

(Click on the chart to see the full twitter thread)

(Click on the chart to see the full twitter thread)

(Click on the chart to see the full twitter thread)

(Click on the chart to see the full twitter thread)

(Click on the chart to see the full twitter thread)

(Click on the chart to see the full twitter thread)

#IPOs – no shares to ride for $UBER and $LYFT yet

Since BYND, with a big jump, is making noise again today, thought it’d be a good time to take a quick look at recent IPOs still in play as per this criteria:

Buying IPOs For Dummies

See the charts below. Each is set at a $10K investment to show the percentage as well as dollar gain for each stock in the white flag on the lower right of each chart — for example, SWAV is up 99% since its IPO buy, SOLY up 115%, and so on.

UBER and LYFT have not climbed above the hype on each of their first days of trading so they are not long investments. At best, LYFT particularly is a short.

Of note, if APLT holds its gain for today, it will be a buy either at the close today or on tomorrow’s open.

(click on the chart panel for a larger view)