#STOCKS – Gonna huff and puff and blow your house down…

It’s never advisable to short a sector making a straight up move in a bull market. So let’s just call this a heads-up on a sector where sometime soon heads are going to roll.

Housing stocks and housing prices have gone crazy again. Just like in…uh, 2007. History repeats here and I suppose there are those out there in major cities bidding up asking prices on the belief that it’s different this time and even if is isn’t ten years or so from now they will break even on the house they overpay for today.

But it must be noted Toll Brothers (TOL), always the leading stock in the sector, took 6.4% hit today on its earning miss and gave a blow to the rest of the sector at the same time (see the chart panel below). From a charting point of view, today left a lot of uncertainty, if not downright fright, in the sector as measured by all those bearish candle patterns in the stocks. HOV, at less than $3 a share, always get weakest fastest, but consider the doji in the sector ETF, XHB, and in the builder,DHI…

Now is this a just shot across the bow or a direct hit on the housing sector ship?

Either way, heads up! Especially investors.

And P.S. if this sector starts to sink, put a spyglass on the banks.

(click on the chart panel for a larger view)

$SBGL (TRADE UPDATE) – up 9.4% in 4 days…

SBGL, long from 11/21 at 5.09, has had a nice four day run to the upside to close-by resistance.


At the same time the leveraged gold-stock ETF, NUGT, has move up to the top of its recent range (see the chart below). Would like to see a breakout in order to take SBGL above 5.65. It closed today at 5.57.

In the meantime, moving the stop on half the position to 5.42, and to breakeven on the other half.

(click on the chart for a larger view)

$SBGL – the little gold stock known to get bigger..

Back in a little into the little gold stock that can get bigger in a hurry.

As has been said before, divergences don’t mean anything until they do (see the chart below). SBGL made a lower low in the last two days but the channel commodity index did not, setting up, once again, a divergence that might be telling on the long side.

Last this setup took hold, SBGL rallied up 26% in a month at its high and stopped out at up 22% (see the first chart below for the history). Not bad, especially since its stock sector (measured by the ETFs GDX, NUGT, and JNUG) were mostly going lower during that entire advance (see the second chart below).

Closed today at 5.16. May add on tomorrow’s open. Stop at 4.98.

(click on the charts below for larger views)

$SBGL UPDATE – up 25% on this swing and still going…

SBGL continues to defy the general gold-stock sector trend – up nine consecutive days and counting.

This an update of the posts here:

SBGL – Updating the swing hold on the gold stock

The stock, which can be wild and crazy (has been known to double on a swing), has been rallying steadily as the stocks in the sector, measured here by the leveraged ETFs NUGT and JNUG (see chart below), have been moving down and sideways for the past three weeks.

The trade is up 25% in a little more than a month. If the gold stocks have a bounce, SBGL will probably continue its climb, but I suspect the sector is more likely take another leg down, and this time take SBGL with it. The gold-stock sector had a bounce today (11/6) with GDX, NUGT, JNUG up, extending SBGL’s run to the upside to nine days in a row.

I am tightening my stop on the stock to 5.37 on a long that from 4.42 to lock in profits.

(Click on the chart for larger view)

#The10kDayTrade on $EPZM nets $420 for the day

DAY: Positive.
SWING: Positive.
RALLY: Positive.

EPZM, in the biotech sector, was a buy on the third 5-minute bar today (see chart below), based on being above its open and above the rising fast moving average with the market trends all positive.

Show me the money:

The net gain for the $10k trade in EPZM was $420 for the day, exclusive of slippage and commissions.

(click on the chart for a larger view)

Trading System:

This is “show me the money” system when only trading a $10K account.

Stocks are selected the night before and bought at the market on the next day’s open. They are monitored on a 5-minute chart (see below) with a stop-loss on any close below the day’s open after the first five minutes. If a stock does not stop out right away, it will immediately be in profits. If the ETF or stock or option does not violate its open any time during the day the profits can be taken on the close to end of market day. That is the basic trade.

An alternative trade is to buy after the market open in the direction of the market trends whenever any ETF, stock, option is above its open, and manage it the same as above. The market trends are for the three time frames based on market timing – a Day, a Swing and a Rally trend for the longer term.

Profits can be taken at any time when the ETF, stock, option is overbought, or when it breaks down through a fast falling moving average. And as a day trade the trade ends on the close no matter what.

This blog is for entertainment purposes and nothing else. It is not to be in any way considered trading or investment advice.

$KBE – Are these banks or the walking dead?

Long-term market breadth has been rising for nine days.  That usually takes most stocks in the same direction.  After all, if a stock isn’t rallying when it has the entire market on its side, when is it going to rally?

So, consider the banking sector…

JPM, BAC, GS, WFC, DB, KBE (the ETF for the sector) are all falling while breadth is positive (see the rising green in the middle of each chart below), and now all of these stocks have broken support falling out of their respective consolidations (see the blue boxes on the charts below).

Don’t those boxes look a lot like coffins?  So is this out of the coffin and into the grave like “out of the frying pan and into the fire”?

Enough fiddling around.

If you’re a bull this is not a sector you want to see lagging, let along falling apart.  So here’s the heads-up, they’re likely going down.

(click on the chart for a larger view)



$GS $JPM $BAC $DB – banks of a feather bounce together…

Update April 3, 2107:

After eight days down in a row on the Dow, today’s bounce was nearly inevitable.  Eight days in a row is a lot when four is most often the magic number to buy for a bounce.

And as inevitable, an oversold sector is likely to bounce with it.  In this case, the financials – that is, the banks — GS, leader to the downside, as well as JPM, BAC, and even the deadest dog of the bunch, DB, which has some serious fundamental problems all its own (besides being the last lender to loan to Donald Trump).

Most likely this bounce will continue in a rise to resistance, most likely to bottom of the boxes indicated on the chart below at the point the stocks fell through support going into this recent decline.

If they turn over again with lower highs sometime soon…say, next week…that will not be good for any bull market going forward.  In other words, head up the bull might actually be stumbling.

(right click on the chart for a clearer view)


#MarketTiming – the trend is…

The trend is your friend.  Heard that old saw a thousand times, and yet how many often is it forgotten?  The trend is your friend.  True last year, true this year.  True in 1920, 50, 70, 90 and now.  True, in 1929, and in 1987, and in 2000, and in 2008.

True now.

TREND TRADE: Long from open, 11/9 – UPRO up 14.6%, TQQQ up 6.4%, TNA up 37.1%, XIV up 23.8%.

SWING TRADE: Long from open, 12/16 – UPRO up .3%, TQQQ up .7%, TNA up 3.4%, XIV up 5.6%.

DAY/SCALP TRADE: Long on open, flat on close – UPRO up .25%, TQQQ up .55%, TNA up 1.45%, XIV up 1.61%.

Among the other 3x-leverage ETFs on the trend trade from 11/9 ERX is up 25.6%, SOXL up 27.6%, FAS up 30%.

Notable stocks on the trend trade AAPL up 5.2%, GS up 27.7%, TSLA up 9.2%, UAL up 25.9%, BID up 16.7%, FB down 4%.

Market timing the trend – quite spectacular, still on-going….


#StockMarket – it has to stall before any fall…

And there is hardly any sign of either – the stall or a fall – as index breakouts begin (or continue) everywhere.

Hard to believe this rally, much like the post-Brexit rally but here it is, the same marching song,  with the lows above the lows on the NYMO, McClellan Oscillator (green circles on the chart below), tapping out the same beat while the rising NYSI, the McClellan Summation Index, plays the baseline.

Needless to say this has been a spectacular rally since the NYMO first turned up (at the end of that nine-day October decline) on 11/03.  Among the 3x-leveraged ETFs I’ve written about off and on here for years, TNA is up 47 percent from there; TQQQ up 12.3 percent; UPRO up 16.5 percent; XIV 31.5 percent; and as to sectors, BIB up 33.5 percent; FAS up 30 percent; SOXL up 28.6 percent and ERX up 22.2 percent. If one had to guess, it would be TQQQ catching up to the others going forward.

From the last upturn in the NYSI posted here in my “IT RHYMES” thread (see an updated second chart below), TNA is up 6.3 percent; TQQQ up 6.8 percent; and XIV up 13 percent.

Once again, the wonders of breadth as monitored by the McClellan Oscillator.

If the bears have any hope at this point it is the possible choppiness that may come up Tuesday and through the holiday, and could surprise with more downside than I’m suspecting, but after that I believe the market continues its march higher into the Santa-Claus rally.

(right click on the chart for a larger view)



#Nifty50StockList – picking bottoms with 40-plus sells

Again and again, my nifty-50 stock list moves from oversold to overbought and back again to oversold like an ever spinning wheel within the market’s spinning wheel…

And each time there are 40 or more of the 50 stocks on sells, it’s time to sit up and take notice since that is the number that most often signals either the bottom or the beginning of a bottom on each down swing.

This is just FYI, but it is what market timing and swing trading are all about, and the results can be quite remarkable.  For instance, the last 40-plus sell day was November 13th for a buy on open of the 14th.  On that buy signal, among the leveraged ETFs  TQQQ is up 10.6% (tracking the Nasdaq), TNA up 6.6% tracking the Russell), and UPRO up 10.7% (tracking the S&P 500).

Leveraged sector ETFs include ERX up 12.1% in energy, BIB up 10.7% in biotech, and FAS up 8.6 tracking financials.

Notable stocks on the same signal – AAPL up 4.7%, BIDU up 6.3%, and NFLX up an amazing 15.8%.

This is all in just three trading days so far. Nuff said, I guess.

(click on the chart for a larger image)