#MarketTiming – Pot stocks partying like it’s 1999

Canada legalizes marijuana and the stocks get high.

In the past ten trading days, with confirmation from long-term breadth as a market-timing signal, sector newcomer TLRY is up 200%, CRON up 97%, all up, CGC 50%, the sector ETF MJ (this might be the more reasonable way to play the sector), even long-term steady, GWPH, which actually makes money in medical marijuana is up nicely. The cash/percentage gains per $100K invested are the white flags on the lower right of the charts below.

In 1999, it was the dot-coms gone crazy with no more than hopes and dreams of massive monies to be made. With, most notably AMZN, the hopes and dreams have come more than true. So it’s likely to be with cannabis too in the fullness of time, but like in 1999 with the dot-comes, it is now no more than party time.

If anyone rolled these up ten days ago, congratulations! If not, they will correct, probably any moment now with the market but, no matter, these stocks will be obvious prospects for the next market upswing.

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#MarketTiming – Summing up profits on a 10-day upswing

How important is long-term breadth to the swing trader?

It is a trigger to get into the trade and an answer to one of the most difficult questions in market timing and stock trading — When to get out?

Measured here by the McClellan Summation Index ($NYSI), this latest upswing began on the open of of 8/20 and closed on the open today, a 10-trading-day swing. See the indicator in the center band of the charts below).

On the swing, the 3xleveraged ETFs made solid gains for the 10 trading days: TQQQ up 8.6%, TNA up 5.7%, UPRO up 3.7%, FNGU 11.5%, SOXL 19.7%, FAS 2.8%, LABU 18.8%, ERX 4.6%. There were no losses in the group.

On the swing, among my “bellwether stocks” AAPL racked up a 4.9% gain, AMZN gained 7.3%, NVDA 15.9%, NFLX 14.3%, TWTR 5.6%. But there were also losers – TSLA down 2.1% , GOOGL down .9%, BABA 4.4%. BIDU 2.4% and FB down 2.5%. The entire basket was up 1.98%.

The top-ten stocks in my nifty-fifty list coming into the swing outperformed both of the above stock baskets with CRC up 38.4%, TNDM up 36%, PVAC up 4.8%, RGNX up 13.2%, WTI 15.1%, ARWR 4.6%, I up 2.9%, HLG 4.6%, TLRD 7.7% and the only loser in the group was MDGL down 3%. The nifty-fifty stock basket for the swing gained 12.48%.

How important is long-term breadth for the swing trader?

The “When to get out?” was today’s open for everything (market timing). As of the moment of this writing all of the symbols mentioned above are down with the exception of MDGL, the only loser in the nifty-fifty basket (that, I believe, is the market giving a wink to traders just for the fun of it).

Except for the fact we are still in a bull market, today’s breadth sell could have been a short. For aggressive traders, it was.

A main path to the “persistence, experience and discipline” it takes to be a successful trader is the trigger-in one is comfortable with and the trigger-out one is willing to accept without question.

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#SwingTrading – a serious swing through the weed patch

Marijuana stocks are the ruling weeds in the market garden on this upswing.


SWING TRADING TRIGGER – AUGUST 16TH

That was the technical trigger for the open three days ago.

The fundamental trigger came on the news Constellation Brands (STZ), U.S. distributor of Corona and Modelo beers, was investing $4 billion for 38% of CGC. All of a sudden, the Wall Street mob discovered it might be acceptable to pour money on the weed patch, particularly those springing up in Canadian gardens where marijuana has recently been made legal throughout the country.

As a result, of those traded in the U.S., CGC is up 26; a new IPO, TLRY, up33%; CRON, 27%. Even the most legitimate of the medical marijuana companies, the stalwart GWPH is up 3.6%. See the white flags on the lower right of each chart below which correspond to the cash and percent gained for each $100K invested.

Of particular note is MJ, up 10.7 percent, the sector ETF for the weed patch. MJ tracks the Prime Alternative Harvest Index, generally by holding many of these stocks and others traded on the Toronto Exchange.

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#SwingTrading – Up, down, sideways, sideways sideways…

It appears the market could go up tomorrow.

“Could go up”, I say that hesitantly because for end-of-the day swing traders like me, this has been a rather confounding week. On Monday, all of my swing signals (based on price, breadth, volatility) were on sells for Tuesday – Tuesday the intraday market went up. At the end of the day Tuesday all of the signals were on buys for Wednesday – Wednesday the intraday went down. At the close Wednesday, all of the signals were again on sells – today the market went up a lot.

Well, in SPY’s case it went back up into the Monday’s price range – in other words, sideways, sideways, sideways…

Although long-term breadth has not turned up, the low above a low in short-term breadth (see the circle on the upper portion of the chart below) usually will bring a bounce. That should happen tomorrow. And if long-term breadth turns up with it, the entire market could rally for a couple of weeks at least, which would be just fine and dandy.

If the market manages to put a final confounding candle on the cake tomorrow with a hard down day then…okay, I’ll say it, then we will have another indication a sizable bear may be stirring in its cave.

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$TWLO – can the stock swing to 100% for the year?

TWLO, coming out of oversold, is on a buy signal for tomorrow’s open.

It is up 98% for the year to date on 21 swings, longs only, that have been 61% profitable. See the white flag on the lower left of the chart below for the closed profits per $100K committed to each trade.

This is a simple oversold/overbought swing-trading system for a stock on its own with no market factors in play. On market swing signals it is up 44% for the year (not bad). That it is outperforming the market signals is a sign of an exceptionally strong and consistent mover in this bull market.

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#MarketTiming – $TWTR leads latest swing with 33% gain

Been on vacation from this blog for awhile but am back now and will try to be more diligent in posting here.

Now, as it turns out, appears to be an appropriate time to return since latest swing trade on the long-term breath signal will close officially on the open tomorrow. This swing began on the open of the market on 5/31, twelve trading days ago.

In the bellwether stocks (see chart panel below), as of the close Friday, TWTR led the stocks I consider to be bellwethers in this bull market with a 33.2% gain, followed by TSLA up 24.1% and BIDU up 12.6%. Twelve trading days – I’ve said it before but it bulls repeating…this is what swing trading is all about. The position in stocks will be in cash waiting for another swing to begin.

Should be noted, the 3X-leveraged ETF, TQQQ, which tracks the Nasdaq and makes general swing trading easier, is up 12.1% for the trade. FNGU, an 3X-leveraged ETN trading based on the NYSE FANG stock index, is up 33% (remarkably it was relatively small volume).

In addition to TWTR, TSLA, and NFLX, the bellwether stock list also has AMZN, NVDA, GOOGL, BIDU, BABA, FB, and AAPL. The gains for the up swing just ending are in the white flags on the lower right of the charts below. That is a calculation per $100K traded in each position in order to get both a dollar-earned and a percentage gain. Note AAPL is the laggard on the list, up less than one percent for the swing, $800 on $100K. Another example from the charts – NFLX is also up double-digits, 10.7%, $10,690 for the swing.

As for the general market, the sell signal for tomorrow’s open has come most likely because this rally — which longer term price-wise began in early May — is up a lot, overbought and tired.

I would not be surprised, however, by another bounce since short-term breadth has been declining for six consecutive days. Most likely that signals the bounce, at least a feeble one, before a bigger down swing, but if one if particularly bearish after this run up it could signal a hard down thrust this week before the bounce.

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#SwingTrading – 2-day swing ending with all bellwether stocks in black

The technical end of this trade, started just yesterday on the open, is tomorrow’s open.

But as of today’s close all 12 of my bellwether stocks are in the black so there’s a good chance they will remain in profits barring any over-night news.

Regardless, it is a market signal that runs this strategy so no later than tomorrow’s open a sell for swing traders it will be (would be nice to have a gap up for that).

My “bellwethers” are TSLA, NFLX, AMZN, BID, TWTR, BIDU, AAPL, GS, FB, NVDA, FSLR, BABA. See chart panel below. The white flags on the lower right of each chart is the current profit per 100K committed to the trade (also correlates to a percentage gain).

The current swing is led by BIDU up 4.5%, followed by BABA up 3% and NVDA 2.9%. That’s in two days.

As a side note BABA is up eight days in a row so if there is market weakness tomorrow it is ripe for a day-trade scalp on the short side.

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#BellwetherStocks – End Of A Swing Trade

The swing trade for buying stocks signaled by the market’s breadth indicators on the open of April 4th, thirteen trading days ago, ended on the open of trading today.

START OF THE TRADE

Despite a choppy market in which neither SPY nor QQQ rose as much as one percent, all twelve of the bellwethers were in the black for the trade and several on the list had rather stellar gains for 13 trading days — TWTR up 20.5%, NFLX up 19.3%, TSLA up 14.2%, AMZN up 13.1% and FSLR up 11.4%.

The Bellwether stocks with single-digit gains were FB, 9.7%; BIDU, 8.4%; BID 7.5%; NVDA 6.3%; BABA 6.6%; GS 2.3%; and last and least (remarkably) AAPL 1.4%.

Once again, market timing has been validated by the stocks even when the market is going no where.

On the charts below, the white flags on the lower left quadrant of each chart is the dollar gains for $100k invested in each particular stock.

Thirteen days…

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#MarketTiming – Swing trading the bellwether stocks…

My swing signals, based on breadth, price and volatility, turned up in unison on April 3rd for a buy on the open of April 4th.

More importantly, short-term market breadth put in a divergent low in the midst of recent market thrusts to the downside. When that happens, the next step that usually confirms an upside swing is the upturn in long-term breadth. That confirmation came yesterday.

There was a previous discussion and chart of this yesterday HERE).

From stock trader’s or investor’s point of view, the purpose of market timing is tell when to buy. And once again, the bellwether stocks list proves that point.

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

On the chart panel below, the white flag on the right axis is the current gain per $100k invested (also calculated for the percentage gain). At the moment, this upswing is lead by TSLA at 17%, followed by NFLX and AMZN, both up 6% plus. Remember when (three days ago) there was some dope speculating TSLA would go bankrupt and President Dumb-Ass was attacking AMZN like it actually owned the Washington Post? What a difference a day or two makes in swing trading.

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#MarketTiming – From follow through to follow through

The general market, after Tuesday’s bounce, followed through today for big gains across the board, made all the more bullish by coming back from a deep gap down.

The Dow, or instance, was down 500 points at the open and finished up 230.

The question now, of course, can there be more tomorrow.

All indications are this correction is over with many of the indexes touching their 200 daily moving averages, with my nifty-50 list of momentum stocks triggering 30 buy signals in the past two days (Monday all but two of those stocks were down, today all but six were up), with CNN Money’s Fear and Greed Index finally lumbering up off a very low readings at 12 today (it got as low as six and can’t go below zero). That later index is still registering “extreme fear” which is the time a time for investors to be looking to buy stocks.

But most importantly (see the chart below), short-term breath put in a low above a low in negative territory, a divergence with the SPY Tuesday which needed a follow through into positive territory to turn the all-important long-term breadth up. The follow through came today.

All three of my swing-trading signals, based on price, breadth and volatility, are on buys now.

So this market bounce has more to come and could morph into a full-fledged multi-week rally.

Some notes. AAPL is probably the safest bet during a market bounce (emphasis on “safest”) but NFLX, NVDA and TSLA will probably out-perform among the big boys. Look at TSLA today, up 7.5% on the day and 13.7% from the open — there was some dope just last week predicting Elon Musk’s baby would go bankrupt.

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