#MarketTiming – moving up from fear…

“I will tell you the secret to getting rich on Wall Street. You try to be greedy when others are fearful. And you try to be fearful when others are greedy.”
― Warren Buffett

Started the week in fear on CNN Money’s “Fear and Greed Index” so I suppose it is appropriate to end the week with a look at how the market moved up from fear and racked up a lot of swing-trading profit in the process.

My post from last Sunday : http://www.thegodoftrading.com/uncategorized/spy-now-upward-bias-fear-greed/.

So where are we now?  See the chart below.  The blue-block line is the Nasdaq Composite.  The red-block line is the Fear-and-Greed Index.

In this market context, and as my daily price signals kicked in, the leveraged index ETFs: TQQQ closed today up 10.3%, XIV up 8.9%, TNA up 7.0% and $UPRO up 5.3%. Among the sector leverage ETFs LABU closed up 17.3%, and SOXL was up 12.7%.  The leader among my bellwether stocks, as of today’s close, was NFLX up 5.8%.

Me thinks it doesn’t take long staring at those percentages to recognize the value of market timing and swing trading.  Of course it is not always like this but when it is…well, it just is…

The 5-minute day-trading stocks for today – FB, NVDA, TSLA, AMZN, and NFLX – had four winners (NVDA, the leader) and one loser (NFLX) and finished up .60%.  Not all that much, but winners are winners and a profit is a profit.  Only NVDA of the ten bellwethers meets the criteria for a buy on tomorrow’s open.  That may be saying something, given there were four or five to buy on every other day in this bullish week.

Also, given that these index ETFs are up four or five days in a row, and TQQQ and the Nasdaq Composite are both overbought, close to two standard deviations of an average advance, and given that trading will likely slow going into the holiday weekend, I will not be surprised to see sideways-to-slightly down Friday.

All buy signals are in place and long-term breadth remains positive and is accelerating so this is still a bull market that is going to go up until it goes down.

SWING TRADING SIGNALS:

PRICE: Buy. (Day 4).
SHORT-TERM BREADTH: Buy. (Day 2).
VOLATILITY: Buy, (Day 2).

CONTEXT:

LONG-TERM BREADTH: Buy, (Day 5).
CNN MONEY’S FEAR AND GREED INDEX: (45 rising, at neutral level).
NIFTY-50 STOCK LIST: 39 Buys; 21 Overbought, 0 Oversold, 9 new buys today, 2 new sells.

(click on the chart for a larger view)

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