#MarketTiming $SPY – Another day, another…

Had short-term sell signals across the board for Wednesday and the market went up. Marginally.

This bull is trending so hard, it hard to get even two down days in a rows, happens but it is hard. Especially when long-term breadth is rising. For the most part one want to be on the same side as long-term breadth.

For today, both Price and Short-term breadth (see the red circle on the chart below), have again given buy signal so the market should go up. “Should” is not a word that has been that predictable these days either on the long side or the short side although the long side has the edge.

Note: RIOT, the wild and crazy stock featured in yesterday’s timing post, did do what it was “supposed” to do, which was to go down — from 28 to 23.

SWING TRADING SIGNALS:

LONG-TERM BREADTH: Buy (Day 1).

PRICE: Buy. (Day 1).
SHORT-TERM BREADTH: Buy. (Day 1).
VOLATILITY: Sell, (Day 2).

CONTEXT:

SPY CLOSE – 266.75
QQQ CLOSE – 155.99
CNN MONEY’S FEAR AND GREED INDEX: (67, rising, greed level).
NIFTY-50 STOCK LIST: 27 Buys; 6 Overbought, 3 Oversold, 4 new buys today, 4 new sells.

(click on the chart for a larger view)

$KC_F #Coffee futures – racks up 134% on the short side.

I closed this trade earlier (covered too soon) but coffee futures officially closed its current down swing with a profit of about 134%.

Needless to say again, Coffee has been a stellar performer on swing trades this year. Calculated on the continuous contract, it is up $16,500 on swing trades long and short (short being best in retrospect). Sneak a peak at the last line of text below for the current initial margin requirement to see what “stellar” means.

As for the current March contract, it is, according to TradeStation, up $12,600 per contract (see the white rectangle on lower right side of the chart below for closed trades). It is hard to calculate percentage gains since the margin has fluctuated.

Coffee has now reversed to a long. The initial margin requirement is now $2,310 per contract.

(click on the chart for a larger view)

#MarketTiming – What a RIOT!

The late great Kennedy Gammage of the Richland Report used to always say “buy when the market tells you, sell when the stock tells you.”

He was making allowance for stocks that defied the general market’s move or giving stock pickers something to do to impress their clients. What he did not tell was that most often when the market says sell, so does the stock.

As I’ve written here repeatedly, I keep a nifty-50 list of stocks, which I follow both as an indicator and for their individual abilities to move with the market. Every so often (roughly quarterly) I sort the list and add in new stocks to keep it current and vibrant.

On the last sort, the stock symbol RIOT vaulted to the very top of list virtually from out of nowhere. Here is its profile on Yahoo Finance:

Bioptix, Inc., through its subsidiary, BiOptix Diagnostics, Inc., develops enhanced surface plasmon resonance technology platform for the detection of molecular interactions. The company also focuses on animal healthcare and owns important intellectual property rights related to veterinary products. In addition, it has granted a license relating to single chain reproductive hormone technology for use in no-human mammals, which is under active development by the licensee bovine rFSH. The company was formerly known as Venaxis, Inc. and changed its name to Bioptix, Inc. in November 2016. Bioptix, Inc. was founded in 2000 and is based in Castle Rock, Colorado.

What?

Recently, it seems, Bioptix, Inc. changed its name to Riot Blockchain, Inc. and its stock went insane, rising from $8 to $23 in four trading days. Then quickly dropped back down as far as $13 in three days. Then wandered sideways while the Nasdaq pulled back and my three swing signals – market timing signals based on Price, Breadth and Volatility – remained on sells. When finally, the swing signals began to click in with buy signals (see the chart panel below), RIOT took off riotously again, rising 101% on the price signal, 92% on the breadth signal and 96% on the volatility signal in less than five days (again, see the chart panel below) – as Kennedy Gammage would say “buy when the market tells you.”

None of this makes any sense to me. I like to think this is three guys smoking weed in Castle Rock, Colorado, where it’s legal who get the brain stroke to go for a “blockchain” in their name because they sort of are one…and laughing at the idea. Wouldn’t that be a riot? What a stroke!

Well, Wednesday we may get a chance to see if “sell when the market tells you” is more telling than “sell when the stock tells you” since all of my short-term swing signal gave sells today for tomorrow’s open (see table below). Geez…going to have to take swing profits on these signal, somewhere around 90% to 100%. On a stock in three to five days.

What a riot!

SWING TRADING SIGNALS:

LONG-TERM BREADTH: Buy (Day 4).

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

CONTEXT:

SPY CLOSE – 266.78
QQQ CLOSE – 155.69
CNN MONEY’S FEAR AND GREED INDEX: (65, rising, greed level).
NIFTY-50 STOCK LIST: 27 Buys; 6 Overbought, 4 Oversold, 4 new buys today, 4 new sells.

(click on the chart panel for a larger view)

$KC_F #Coffee #futures short nets 100%

Took off half of the position earlier on this futures swing trade. Second half up more than 100%, about $3150 on a $2970 margin requirement.

START OF THE TRADE

This move to the downside has probably gone about as far as one can expect and is threatening a turn to upside (see indicator on the chart below) and is down three days in a row so covered the second half of the trade on the close today.

Not going long until I get a swing signal to buy.

(click on chart for a larger view)

#MarketTiming – said bounce and so it came to pass

Yesterday, my nifty-50 stock suggested a bounce in the market today and so it came to pass.

In the process, the bounce turned long-term breadth up, to go along with the buys now on all of the swing signals (see panel below). With 15 individual buy signals on the nifty-50 list today, the list itself moved to middle ground from oversold which would suggest more to come to the upside.

All of the leveraged index ETFs – TQQQ, XIV, UPRO, TNA – are buys on the open tomorrow, as well as 9 out of the 12 bellwether stocks I follow (see chart panel below).

With all of those positives in the midst of a bull market, one has to assume this is once again going up. Until it doesn’t.

SWING TRADING SIGNALS:

LONG-TERM BREADTH: Buy (Day 1).

PRICE: Buy. (Day 2).
SHORT-TERM BREADTH: Buy. (Day 1).
VOLATILITY: Buy, (Day 3).

CONTEXT:

SPY CLOSE – 264.07
QQQ CLOSE – 154.02
CNN MONEY’S FEAR AND GREED INDEX: (60, stalled, greed level).
NIFTY-50 STOCK LIST: 24 Buys; 8 Overbought, 10 Oversold, 15 new buys today, 1 new sells.

(click on the chart for a larger view)

$KC_F Coffee futures, five days short, up 70%

The char below says it all, short from 128.50 in the March18 contract and up now $2100 per contract on this down swing, a 70% gain on the margin requirement.

Oversold now. Down four days in a row, a marker oftentimes for a bounce.

Taking half off but letting the rest ride in case of a crash.

(click on chart for a larger view)

#MarketTiming $QQQ – a bounce nearly guaranteed…

Thirty-nine of the stocks on my nifty-50 stock list are on sells. Nineteen of those are oversold. If that number was 40 sells or more, I’d take out the “nearly” in the title above. Forty is the magic number that brings a bounce in the market within a day or two.

But only 39…so only nearly guaranteed…

See the chart below to view the stretch of sells (the red boxes) on the stock list and what happens next in the Nasdaq.

In addition two of my three swing signals – Price and Volatility – switched to buys while short-term breadth remained on a sell for the fourth day in a row. Four days down on breadth tends to also lead to an upward pop.

With long-term breadth on a sell, the bounce, if it come today, might be a one-day event but we’ll see.

SWING TRADING SIGNALS:

LONG-TERM BREADTH: SEll (Day 2).

PRICE: Buy. (Day 1).
SHORT-TERM BREADTH: Sell. (Day 4).
VOLATILITY: Buy, (Day 1).

CONTEXT:

SPY CLOSE – 263.24
QQQ CLOSE – 153.50
CNN MONEY’S FEAR AND GREED INDEX: (61, falling, greed level).
NIFTY-50 STOCK LIST: 11 Buys; 3 Overbought, 19 Oversold, 3 new buys today, 8 new sells.

(click on the chart for a larger view)

UPDATE (12/5): $QQQ and $SPY weekly options – a recurring plus 100% dream…

UPDATE (12/5): As suggested yesterday the day began with the Nasdaq (TQQQ) rallying, but unlike yesterday, which was perfect for a QQQ weekly option trade, today would have taken some nimble trading to secure any profits in the QQQ calls and the SPY calls. On a $5k buy close to the open, the QQQ in-the-money call for this week (152 strike) rallied up 56% at its peak, violated a trailing moving average at up 48% ($2400), before selling off all the way to breakeven. Two $5K buys on the SPY in the money calls first stopped out for a 1.2% loss, and on a reentry rallied up about 25% before collapsing again to breakeven.

However, the options day-trade play of the day came in the SPY in-the-money put (265 strike) which triggered later in the day and finished at the close up 66% ($3300 on $5K.

Not a terrible day, but a trading test at best.

Haven’t had a chance to update entries here since Wednesday (11/19). Given what happened in the market today, it is as if nothing has happened since. Today was almost an exact replay of last Wednesday with the Dow up, the SPX relatively firm and Nasdaq Composite slamming down 72points.

Take a look at the post below. My first sentence was:

The Nasdaq sold down hard right from the start today, and that is a day-traders dream in weekly options.



If there are recurring nightmares in life, can there be recurring dreams?

No doubt.

With the Nasdaq selling down hard right from the start today, the $5K day-trade in the weekly QQQ in-the-money put finished on its peak at the end of day up 120%, $6000 on a $5000 commitment to the trade. Even the SPY in-the-money weelky put cash in on the market’s the slide, netting 118%, $5900 on the $5000 play in the option. The key to this day-trading system for options (as I have written before) is having an entry a trader is comfortable with, likewise a comfortable protective stop, and on the days (like today) when the stop is not hit, the gain, obviously, can be substantial.

I’ll let the great trader and “market wizard” Linda Bradford Raschke sum it up: “Always take the trade,” she once said, “and sometimes you just get lucky.”

So what now? Once again TQQQ may have dropped too far too fast so I will not be surprise if that 3x-leveraged Nasdaq ETF bounces tomorrow like it did last Thursday and takes the rest of the market with it. Maybe for a couple of days…or more.

LONG-TERM BREADTH: Buy (Day 9).

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

CONTEXT:

SPY CLOSE – 264.14
QQQ CLOSE – 152.71
CNN MONEY’S FEAR AND GREED INDEX: (63, falling, greed level).
NIFTY-50 STOCK LIST: 20 Buys; 13 Overbought, 13 Oversold, 7 new buys today, 4 new sells.

$TQQQ – a Nasdaq bloodbath too far too fast?

TQQQ, the 3x-leverage ETF based on the Nasdaq 100 stocks (NDX), was down 5.4% today, a bloodbath that affected many of the bellwether Nasdaq stocks in the index.

See the table below:

(click on the image for a larger view)

NVDA down 14 points, NFLX down 11, and so on. Pretty ugly in the momentum bellwethers.

There was a fake-out nudge to the upside Tuesday, but can’t say today’s slam down was unexpected. Posted this two days ago:

This could be tricky since long-term breadth continues to climb (up for the fourth day). Given that, if short-term breadth turns up here in the next day or two (or bless a bottom dollar, three days), the market would get another bullish boost. If long-term breadth turns down, this could very easily become the hook that catches every bull off guard. Although the bull market has so far defied the signs over and over again, it is inevitable that one of these times, like today, when the signals signal a turn, the turn will come. Probably when the bears are worn out and the bulls don’t expect anything of on their blindside.

If today’s sell off continues, that will be relevant, but there are signs this is done already.

Nearly every time TQQQ falls through the standard deviation lines (the blocks on the green lines on the chart below), the Nasdaq bounces the next day or two days out (the red vertical lines on the chart). It is as if any fall this far is too far too fast. And oftentimes in this bull market, the bounce becomes another rally (see the diamonds on the chart are TQQQ). In fact, a look-black on the chart shows this last great upswing in the Nasdaq, which began in late September, started with a touch down on the green lines just like today.

So I’m looking for the bounce, and looking to ride a rally if it develops here (Santa time?), and if it doesn’t then the suggestion in the quote above might indeed be a sea change in the market.

SWING TRADING SIGNALS:

LONG-TERM BREADTH: Buy (Day 6).

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

CONTEXT:

SPY CLOSE – 262.31
QQQ CLOSE – 153.89
CNN MONEY’S FEAR AND GREED INDEX: (67, rising, greed level).
NIFTY-50 STOCK LIST: 14 Buys; 11 Overbought, 8 Oversold, 6 new buys today, 3 new sells.

(click on the chart for a larger view)

UPDATED: $KC_F #Coffee futures up 73% in five trading days

A QUICK UPDATE: Coffee futures sold off today (probably hexed it with this post) and finished its upswing with a 31% profit. In this swing system it is now a short.

Coffee futures, which gave a buy signal at 123.85, closed today at 129.65, up 73% on the margin requirement.

START OF THE TRADE

That is a net so far of $2,175 on a margin of $2,970. Five trading days from the close six days ago.

In addition it broke out of the box around its most recent consolidation so it is likely to have more room to run (see the chart below). A possible target would be the high at 132.70 back on October 10th (marked by a white dot on the chart).

A great trading vehicle, coffee futures are up 430% year to date on swing trades year to date, long a short, not counting the current gain.

(click on chart for a larger view)