#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.

(click on the chart panel for a larger view)

#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.

(click on chart for a larger view)

#MarketTiming – What a “long” glorious week!

This is an update of this post in this link, made last weekend:

#MarketTiming – Time for a bounce…

Wow! The predicted “bounce” has turned out to have been an understatement to what happened in the market this week.

Remember the 1961 movie “The Absent-Minded Professor” with Fred MacMurray, which introduced the world to flubber? Well, this week was a FLUBBER OF A BOUNCE, and since today it turned long-term breadth positive it is a bounce that has likely turned into a rally.

If I had to guess, instead of just following along, I suspect the pause begins tomorrow. If it gaps up, the rest of the day will likely be flat as the monthly options expiration plays out. If it gaps down or opens flat, there’s a good chance it rises again to the close and starts the pause there.

Just guessing this stuff…

Regardless, it has been a truly glorious week for swing traders – among the leveraged index ETFs TQQQ is up 15.8%, TNA up 12.1%, UPRO up 10.7%, even SVXY in the blistered VIX complex is up 15.3%. The at-the-money monthly SPY 263 call from Monday’s open, expiring tomorrow, is up 179%. Among the bellwether stocks AAPL is up 9.2% (that is a heavy market-cap lift in an awfully short time), BIDU up 13%, NFLX up 11.2%. I’m going to update my bellwether stocks later but suffice it to say here all twelve as of the close today are in the black for the week.

Now for a few cautionary notes.

If there is any trouble with this, it is that it has been a straight up move since last Friday. All the major indexes and most of the sector ETFs are up five days in a row. Much of the market is wildly overbought on short-term basis. This up move has been crazy. It is easily three standard deviations of an average advance and done in five consecutive days! (See the histogram on the Nasdaq Composite chart below.) I can’t even remember the last time anything like that happened, and obviously not in the last six months of this huge bull market. Forty-seven of the stocks on my nifty-50 stock list are on buys with 31 overbought (see the swing trading signals below), and yet we are not at new highs. This is going to have to have a pause, some backing and filling, then a resumption of the upswing before one can be sure it is yet another bullish rally in the on-going bull market.

The trouble with rallies out of hard drops, like the one the market took before this bounce, is that by the time they are obvious, they are sometimes over.

In addition, if the fierce sell-off that has preceded this bounce was a shot across the bow of the bull market, it is possible the buying this week is the last leap into the market by those long-ago left behind — if so, and if this rally fizzles before new highs (or even at marginal new highs) then this could be an advance before a mighty, mighty big flop.

Whenever this ends, we are going to have one of the biggest bear markets in history. If you don’t think so, you must not know history or you think “it’s different this time.” History says it is never different this time.

Even flubber bounces had to come back to earth.

SWING TRADING SIGNALS:

LONG-TERM BREADTH: Buy (Day 1).

PRICE: Buy. (Day 5).
SHORT-TERM BREADTH: Buy. (Day 5).
VOLATILITY: Buy, (Day 5).

CONTEXT:

SPY CLOSE – 273.03
QQQ CLOSE – 165.70
CNN MONEY’S FEAR AND GREED INDEX: 11, falling, extreme fear level).
NIFTY-50 STOCK LIST: 47 Buys; 31 Overbought, 0 Oversold, 1 new buys today, 1 new sells.

(click on the chart for a larger view)

#BellwetherStocks – longer fangs for the new year?

Let’s put it this way:

NVDA UP 14%
NFLX UP 13%
AMZN UP 11.3%
TSLA UP 7.7%
BIDU UP 7.0%
GOOGL UP 6.8%
BABA UP 6.5%
TWTR UP 5.5%
AAPL UP 4.0%
FB UP .9%

The above are year-to-date returns – nine trading days – which is why they are the “bellwether stocks” for this melt-up bull market. They also happen to be the stocks in the NYFANG Index, up 8.4% year to date.

Also I would add FSLR, up 8.2%, as a bellwether for the future of energy.

(click on the chart panel for a larger view)

#DayTrading $AAPL calls…

CONTEXT FOR THE TRADE

From the link below:

And, of course, if the market rallies it is also likely AAPL will again participate (always good for a bounce, a scalp, or an option-play).

The weekly, expiring Friday, in-the-money 170 calls for a day trade. Currently up 70%, from 2.00 to 3.26. $3100 on a $5K position, 25 contracts.

Will update later:

END OF THE DAY UPDATE – up 62%

#MarketTiming – Swing signals positive for stock buys

All of the swing signals – based on Price, Breadth and Volatility – are on buys and even the all important long-term breadth is threatening to go positive.

It would appear we are entering a seasonally positive time.

On a stock trading note: four of the 10 stocks in my bellwether stock list have a good chance, if the market rallies as is likely Tuesday, of following the market:
NFLX
NVDA
BID
FSLR

See the positive candles today on each of those stocks on the chart panel below. Like the stock market itself, expect stocks that are up to follow-through and go up until they don’t. And, of course, if the market rallies it is also likely AAPL will again participate (always good for a bounce, a scalp, or an option-play).

SWING TRADING SIGNALS:

LONG-TERM BREADTH: Sell (Day 20).

PRICE: Buy. (Day 1).
SHORT-TERM BREADTH: Buy. (Day 3).
VOLATILITY: Buy, (Day 3).

CONTEXT:

SPY CLOSE – 258.30
QQQ CLOSE – 153.87
CNN MONEY’S FEAR AND GREED INDEX: (50, rising, neutral level).
NIFTY-50 STOCK LIST: 35 Buys; 16 Overbought, 6 Oversold, 1 new buys today, 6 new sells.

(click on the chart for a larger view)

#MarketTiming – as suggested yesterday, today the bounce…

Wrote yesterday for a lot reasons the market was likely to bounce today and so it did.

Those reasons remain in place. All three of my swing signals are on buys as well as the ever important long-term breadth. Fourteen of the nifty-50 stock list gave buys today, and AAPL moved up as suggested yesterday. All in all, a good day across the board.

I going to note that my bellwether stock are still oversold or still close to oversold, with many buys today (see the green bars coming out of the oversold cyan color coding on the charts below). If they get moving tomorrow, the market, obviously, is going vault much higher.

SWING TRADING SIGNALS:

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

CONTEXT:

SPY CLOSE – 250.05.
QQQ CLOSE – 144.46.
LONG-TERM BREADTH: Buy (Day 33).
CNN MONEY’S FEAR AND GREED INDEX: (78 rising, extreme greed level).
NIFTY-50 STOCK LIST: 26 Buys; 83 Overbought, 12 Oversold, 14 new buys today, 2 new sells.

(click on the chart for a larger view)

#MarketTiming – Time for a bounce?

Last time posted here I said “sideways to down.” Got the sideways (SPY) and got the down (QQQ) on the two main index ETFs I follow.

In the process both SPY and QQQ managed to get over sold (see the cyan color coding on the charts below). SPY came off oversold today despite no more than an small uptick and QQQ also ticked up while remaining oversold. In the nifty-50 stock list only 16 stocks are on buys and 22 are oversold. The question, as always, is once anything is in oversold territory how long can it stay there? In this bull market that has not been long.

So what now?

Given that all three of my swing signals – based on price, breadth and volatility – registered buys today for tomorrow’s open, and long-term breadth remains on a buy and continues to rise, I am suggesting a bounce Wednesday. How high, how long, and whether or not it can hold at all is anyone’s guess. I will buy with a tight stop. For the sake of the stop loss, I pretty much want this to go my way right away so I will be watching on a five-minute bar chart to make the trade stays above its open from the open of the market.

Although none actually met my intraday criteria today for a buy on the open tomorrow, if I had to pick one stock to buy from the ten in my bellwether stock list it would be AAPL, which slid to oversold and stayed there for four days before its bounce today. I would bet it will follow through on today’s bounce tomorrow. Not a bad stock to gamble on in this context for a day trade, and maybe a swing trade if the market bounces with it.

SWING TRADING SIGNALS:

PRICE: Buy. (Day 1).
SHORT-TERM BREADTH: Buy. (Day 3).
VOLATILITY: Buy, (Day 1).

CONTEXT:

SPY CLOSE – 249.07.
QQQ CLOSE – 143.17
LONG-TERM BREADTH: Buy (Day 22).
CNN MONEY’S FEAR AND GREED INDEX: (67 rising, greed level).
NIFTY-50 STOCK LIST: 16 Buys; 3 Overbought, 22 Oversold, 7 new buys today, 5 new sells.

(click on the chart for a larger view)

$SPY – after the pause, the bull moves on?

On my last post here last week, it was noted that the market was giving “glimmers” of a pause in its advance.   After two days down for SPY and one for TQQQ, it appears the pause late last week is over and it is likely the current bull rally will continue this week.

AAPL, after its own three-day pullback, bounced Friday to turn the Nasdaq again to the upside.

My three swing signals based on Price, Breadth and Volatility have again gotten in sync with individual buy signals on each, and most telling signal of all, long-term breadth, has not wavered on its advance.

CNN Money’s Fear and Greed index has enter and an “extreme greed” level so the market is extremely overbought but as yet there is no sign of a turnaround.  Quite the opposite for Monday.

SWING TRADING SIGNALS:

PRICE: Buy. (Day 1).
SHORT-TERM BREADTH: Buy. (Day 1).
VOLATILITY: Buy, (Day 5).

CONTEXT:

LONG-TERM BREADTH: Buy(Day 15).
CNN MONEY’S FEAR AND GREED INDEX: (77 rising, extreme greed level).
NIFTY-50 STOCK LIST: 19 Buys; 7 Overbought, 6 Oversold, 5 new buys today, 3 new sells.

Bellwether stocks meeting 5-minute day-trading criteria for a buy on the open Thursday:  BABA, AMZN, NVDA, GS, TSLA; four stopped for losses, GS a winner, for a net of minus .12%.

Bellwether stocks meeting 5-minute day-trading criteria for a buy on the open Friday:  GS, TSLA, BID, FSLR; two stopped for little losses; TSLA and FSLR, winners, for a net of plus .45%.

Bellwether stocks meeting 5-minute day-trading criteria for a buy on the open Monday: TSLA, NVDA, FB.

 

 

$SPY – giving glimmers of a pause…

This is just a guess but it will not surprise me if the stock market rally takes a pause Thursday.

Overall, the  bias remains bullish with long-term breadth continuing to rise, and my buy signals based on price and volatility sill in place.

So why a  pause?  Why now?  Maybe?

The ETF for the S&P 500 — SPY — is not only up three days in a row, it has now been overbought for all three of those days.  The last time it was overbought for three days was September 1st going into the holiday weekend.  On the Tuesday following the holiday, the market took its deepest setback in this latest advance from late August.  And while this bull market has been relentless even in the face of any indication it might turn down, short term breadth turned down today at an overbought level itself (see the red box in the upper right of the chart below).  Many times when that happens as prices are shooting upward, it is the glimmer that there is weakness under the mask of the price advance, and many times it the prelude to a quick dip (look back over the chart for similar instances). Also, the stocks on my nifty-50 stock list have been slowly rolling over for the past two days, from 34 on buys to 27 today, another glimmer.

However, those glimmers may mean nothing at all and even if they do bring on a pause, or a sideways slide for a couple of days, it is no big deal.  It’s going to take more than this to slow down long-term breadth (the straight up line with the black dots in the middle of the chart below).  There are just too many positives so the market still has higher highs ahead.

Should be noted that AAPL filled an intraday gap from three days ago today down at about 158 and the stock finished near its high for the day.  If it bounces based on that, as big as it is, then there won’t even be a pause in the rally tomorrow.

SWING TRADING SIGNALS:

PRICE: Buy. (Day 3).
SHORT-TERM BREADTH: Buy. (Day 3).
VOLATILITY: Buy, (Day 3).

CONTEXT:

LONG-TERM BREADTH: Buy(Day 13).
CNN MONEY’S FEAR AND GREED INDEX: (67 rising, greed level).
NIFTY-50 STOCK LIST: 27 Buys; 17 Overbought, 6 Oversold, 5 new buys today, 9 new sells.

Bellwether stocks meeting 5-minute day-trading criteria for a buy on the open Thursday:  BABA, AMZN, NVDA, GS, TSLA.

(click on the chart for a larger view)