$SPY $QQQ – a December rally worth hating…

Granted the general market has rallied this month fairly steadily. Great for buy-and-hold investors, who don’t plan to sell even if it doesn’t, but not so great for swing traders like me.

My swing signals, usually so reliable, have been all over the place. Last Monday buys across the board, market tanks. Tuesday sells, market rallies. Wednesday mixed. Thursday sells across the board, market rallies Friday. Friday buys across the board, Monday…uh, market follows through to the upside…

But follows through in the worst possible way. My signals are for the open the day following the day they trigger. So today’s open gapes up big…then backs off and goes sideways all day for little or no gain from the open. That’s pretty much the way it’s gone on all month.

I do recognize these are swing signals, meant to capture individual moves, and they by their nature can be problematic in a strongly trending market like this one.

The main ETFs I trade, TQQQ and XIV, are up roughly six to eight percent each on the several swing trades this month. Nothing to cry over but those guys are 3x-leveraged so those gain are not much to sneeze at either.

What now?

Everything is up at least for a second day and have entered the first stage of too much too soon. Thirty-nine of my nifty-50 stocks are on buys with 24 overbought (a lot), and CNN Money’s Fear and Greed Index is at a greed level but still a potential divergence if it turns now(see table below). The market can go higher of course, and probably will given the season and given it’s a bull market, but the imminent passage of the Republican tax bill may turn out to be a sell-the-news event so caution as always is warranted here.

SWING TRADING SIGNALS:

LONG-TERM BREADTH: Buy (Day 2).

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

CONTEXT:

SPY CLOSE – 268.20
QQQ CLOSE – 158.64
CNN MONEY’S FEAR AND GREED INDEX: (74, rising, greed level).
NIFTY-50 STOCK LIST: 39 Buys; 24 Overbought, 3 Oversold, 10 new buys today, 1 new sells.

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