#MarketTiming – six days up and what now? – UPDATED

UPDATE: What now?

As suggested in the post below, I expected the market to move up this week, not as much as it did, but no matter.

Anytime one is on he right side of a six-day swing, either up or down, one cannot complain.

In this case, it’s six days up.

TQQQ, the 3x-leveraged and preferred trading ETF for the Nasdaq, gained 22% on the swing. Some major bellwether stocks have powered the six days, AAPL, MSFT, NVDA, AMZN FB, all up six days in a row; TWLO up six days and 73% on the move is by far the most spectacular example I follow.

Swing trading…what more can you say?

But what now?

This could stop right here. The NYMO was down today (see the chart below). How many times have we seen that mark the end, or at least a pause, after a four or more consecutive days up?

However, the all-important NYSI continues to rise so, unless this is going to drop right out of the sky, it’s probably a pause or a stall — it takes time to work off $2 trillion of Federal Reserve funny money spent in all the wrong places.

This has been a long spectacular rally since March, a fast up characteristic of bear-market rallies. If this is the end bullish traders and long-term investors who believe the bull market lives on will be in great danger.

If the market drops here and takes the NYSI negative, watch out…

An always remember there is no profit until you sell.

(click on the chart for a larger view)

#MarketTiming – this week’s up leg UPDATED

In Sunday’s post below it was said:

“Monday will be important but I’m going guess… The market is going to pop and take a leg up for at least a couple days this week.”

Got the pop. Got the couple of days up. Anyone sell the open today?

The market gaped on the overnight futures again but a turn-around-Tuesday did not another Monday make. Unlike Monday there was no follow through on the gap today. Although the bull-market-hope-to-be buyers made a game try to bring it back mid-day after the first slip and slide down, but the bear gave a little push with his paw to bring on a true turn-around Tuesday.

There were reversals all over the board.

That mid-day sway was rather nerve wracking for the 274 put that triggered on my SPY day-trading system but, all’s well that ends well. It finished with a 33% gain.

(click on the chart for a larger view)

As for the day itself…

Hmm…. That big black thing on the daily chart does not…well, that does not look good, but the NYMO and the NYSI continue to rise so there is still some hope for the bulls.

(click on the chart for a larger view)

#MarketTiming – looking for a swing leg up…

Nearly every night for past two weeks, the overnight index futures have been trying to mount another leg up for the market from the March 23rd bottom, and nearly every day the bears try to knock it back down.

Actually that’s typical – as J.P. is reputed to have said famously: “The market will fluctuate.”

As a day and swing trader I’m just sitting on the edge of my desk chair waiting to see which way to go.

Technically speaking, the SPY chart is showing an island reversal for the recent spectacular bounce off the market low.

That is bearish.

In addition the chart patterns I watch most closely — the NYSI and NYMO — are decidedly bearish. After getting wildly and rapidly overbought on the bounce, they have retreated with both highs below highs on the NYMO and a drop below the zero line on the NYSI. In bullish times it usually take three or four NYMO highs below highs to stop a rally. In bearish times it may take but one and several lows above lows to mount one. So far that has been true again (see the NYMO/NYSI line in the middle of the first chart below).

Long term investors, if they are in this market below current price levels, are losing time (at least a year, maybe as much as Trump’s entire term). If they are in at higher price levels they are truly trapped, losing time and losing money.

Regardless, I keep hearing both groups wishing and hoping — and pleading for — more bounce, either to cut paper losses or to get out.

So what’s next?

Having said all the bearish stuff, let’s take a look at the a couple short-term rally possibilities.

The NYMO, despite the current bearish pattern, just did something that is normal in bullish times and is at least a glimmer for a another leg up. It has dipped to the zero line three weeks (15 trading days) from its low. Three to four weeks into is normal for a twelve to fourteen week McClellan Oscillator cycle; it happens all the time in bull markets. Could this be a hint this is the week to try for more upside? A bit of relief, a surge of hope for the bulls? Maybe.

In addition, every day I tabulate all the stocks on my nifty-fifty stock list as to whether they are on buys, buys-overbought, sells, sells-oversold. Have been doing that for years, and it is a list that talks.

See the histogram on the second chart below for reference.

I’ve said before any time 40 or more of those stocks are on sells that is either the bottom of a swing or the beginning of the bottom of the swing. On the chart below, that tallies as 30 or more (stocks on buys minus stocks on sells). The red box mark each time this has happened.

During bull markets, when the nifty-fifty start up again, they either lead or confirm the next up swing. But since February that has not been case. No need to guess why that is so. Whenever a reliable indicator has a change in behavior, it screams there is SOMETHING BIGGER GOING ON HERE! My stock list is one among several technical indicators that have just announced the bear is out of his cave (and he’s given the world a vicious virus besides).

But…like the glimmer on the NYMO, there is a glimmer here also. The stocks on sells has been under forty for three days (there is no four days on this chart), and for the past two of those days it’s been slowing slogging its way higher.

Monday will be important but I’m going guess… The market is going to pop and take a leg up for at least a couple days this week.

Needless to say, I could be totally wrong about this since I am arguing against the NYMO and NYSI at the moment, the two most important measures of market psychology there is.

If so…well…it will be a short…again.

(CLICK ON THE CHART FOR A LARGER VIEW)

(CLICK ON THE CHART FOR A LARGER VIEW)

$SVXY – Just a heads up…

If you haven’t been sitting on the edge of your SVXY already, now is the time.

Back in January I did the bookend to this post in this link: $TVIX – Just a heads up… and reiterated it when the explosion began in this link: $TVIX – From heads up to launch up….

TVIX was at 40 or so then and hit a high of 1000 yesterday, while its little sister in the land of leveraged VIX relatives, UVXY started its own spectacular launch from 12 or so and hit 134 yesterday.

There’s only a month of it but enough of this past history. Can anyone hear me laughing at how insane this rum has been? It is time to turn attention to opposite trade on the VIX.

See the charts below.

VIX already is going sideways at an extremely high level but until today TVIX and UVXY didn’t seem to notice. Both took new stabs the highs today and closed below both their respective opens and closes from yesterday. While they haven’t quite broken any trend lines or any reasonable moving average, they both have truly big ugly, ominous, candles.

If TVIX and UVXY didn’t know the VIX might be done with its move until today, it would appear their leveraged counterpart, SVXY, hasn’t quit notice it yet (see the chart). With all this volatility ripping back and forth, it finished up a relatively paltry 3.3% today and produced a perfectly reasonable little white candle.

SVXY goes up as the VIX goes down. If it gets moving it can hit 35 in a flash, and 50 in a quick explosion of its own.

So heads up – there’s a good chance SVXY runs up tomorrow. If not tomorrow, soon…

(click on the chart panel for a larger view)

#MarketTiming $SPY – Buy now, resell later…

Gotta be a bounce if only because it can’t go down forever.

CNN Money’s Fear and Greed Index is at one. One. It can’t go below zero.

Forty-nine of my nifty-50 stock list are on sells with forty-eight of them oversold. I can’t remember 48 oversold all at once before.

The VIX is at 75. That is virtually a bear market momentum number.

The VIX leveraged ETFs, TVIX and UVXY, have been the stars of this market plunge. See the charts below. Since the NYSI downturn 13 trading days ago UVXY is up 40% and TVIX is up 72%

TVIX was at 40 when I posted this advance notice in January – $TVIX – Just a heads up… – and closed today at 399. Absolutely f-ing spectacular if I was so myself.

So what now?

This is a only a guess because I have no actual upturns anywhere – not in the NYMO, let alone the NYSI, not in price, not in volatility, definitely not in fear and greed but this exercise band is stretched so far, the market ether has to crash tomorrow or snap back.

I’m guessing the shorts cover only because they have made so much profit this week and it would be prudent to take some before the weekend.

Could be wrong.

President Incompetent could try to “reassure” the market again, or claim everything is hunky-dory again, or blame Obama again or blame the Fed yet again. (Hell, the Fed fought the NYSI mid-day today and lost that battle big time by the close.) Yes, yes he claims he knows a lot about the stock market but knows nothing so he slam the market down another thousand points or more…again

But if he shuts the tweet up…

My guess is it’s a buy now – not for the long term – and a resell later.

Regardless – tight stops.

(click on the charts for a larger view)

$TVIX – From heads up to launch up…

On January 14th, I posted this link as a “heads up” to the what was happening in the VIX and its related ETFs and ETNs like the 3x-leveraged TVIX:

$TVIX – Just a heads up…

“I don’t know what’s going to finally trigger it nor when it’s coming,” I wrote in that post, “but when this leveraged VIX ETF turns, it’s going to explode.”

The trigger turned out to be the old reliable standby – the NYSI, the McClellan Summation Index, as long-term breadth tripped under the price surface of the market, along with the first day TVIX did not make another new low. That was on 1/22 for a buy of TVIX on 1/23 (see the blue candles on the chart).

By the time TVIX finished its down swing, it made new lows 11 days in a row, four days after the “heads up” given here (see the blue vertical line and the pink dots on the chart below) – great anyone short any VIX-related product — but that was also a sign the pop was going be a bang, maybe even more than a bang – an explosion yet to come?

Since then, three trading days ago, TVIX is up 29.9% on today’s close. UVXY, the 2x-leverage ETF, is up 22.7%.

(click on the chart for a larger view)

#MarketTiming – the Santa Claus rally goes crazy

The Santa Claus rally which arrived with a buy signal on the open of December 9th, is still going and going and going…

I wrote about this quiet rally trigger first in this link:

#MarketTiming – with not much fanfare Santa slips into view

Then, as the fanfare took hold:

#MarketTiming – the Santa Claus Rally, a progress report

Since that second post, TQQQ has gone from up from 9% to 17.7%, UPRO from 6% to 11.2%. The 3x-leveraged sector ETFs continue to surge: TECL (tech) up 21% now, ERX (energy) up 18.1% and SOXL (semis) up 29.9%. Among the bellwether stocks I follow, TSLA is leading the pack, up 27% now; NVDA up 13.4%; WYNN up 18.2% on a big jump out of a high-level consolidation today.

AAPL, which lagged early on, has now moved up a nice 10.9%, closing above 300.

Big gains in not much time – the rally is a mere 17 trading days old.

All of which is great for the bulls…except it’s all begun to go kind of crazy.

AAPL has a market cap of $1.3 trillion, somewhat insane no matter how much cash the company generates for buy-backs. MSFT is at $1.2 trillion; both GOOGL and AMZN are knocking on the trillion-dollar door. These stocks have market caps four and five times such “puny” companies as Walmart, Coca-Cola, Nike, Proctor and Gamble, Home Depot and even Exxon-Mobil. How crazy is this?

Speaking of buy-backs, corporate debt is likely piling up more and more as the FED keeps its foot on the printing-press pedal – margin debt did not move much last month so all this “irrational exuberance” has to be coming from somewhere.”

CNN Money’s “Fear and Greed” Index is at 97. Ninety-seven! That in and of itself is the stratosphere of extreme greed. It can’t go higher than 100. A year ago it touched 3, on a trap door that swings both ways.

Still, the market can go higher, and probably will, since there is momentum in that 97 number. It usually takes a divergence (a high below a high) in that index to trigger a decent down swing (see the red circles on the chart below). The index has to back off on a market dip (which is likely imminent) then fail to go higher as the market resumes its advance to another high.

And both breadth measures, the NYMO (short-term) and the all-important NYSI (longer-term) remain positive. So there is time for more rally.

Not much more to say at this time…except to note in markets going crazy (like 1999, like now) there is, in the end, no profit until one sells.

(click on the chart for a larger view)

#MarketTiming – the Santa Claus Rally, a progress report

On December 6th, the all-important NYSI, measuring longer-term market breadth, turned up signalling an on-coming upswing in the market beginning the open of Monday, December 9th. It was an unusual turn in that it preceded the NYMO short-term breadth indicator.

That doesn’t usually happen unless there’s been a V-bottom in price on the most recent downswing. And, in this case there was, and the NYMO confirmed the rally on 12/11 giving its own buy signal for the open of 12/12 when I wrote this entry below:

#MarketTiming – with not much fanfare Santa slips into view

Since then most of the major indexes, and their 3x-leveraged ETFs, have been up a cumulative eight days. Needless to say, the market is overbought. CNN Money’s Fear and Greed index is at 90, an “Extreme Greed” level, a level which eventually leads to sells downs.

Consequently, the market could take a dip or a tumble anytime (although with Christmas yet to come everything remains bullish). With that in mind, me thinks it’s time for swing traders and anyone else who feels comfortable taking profits should either tighten stops under the advance or cash out some of the gains.

Among the major leveraged ETFs, TQQQ is 9.0% for the eight days, TNA up 6.3%, UPRO up 6.0%. In the leveraged sector ETFs, TECL is up 10.4%, ERX (remarkably) up 10.3% and SOXL is up a whopping 19.6%. Eight trading days.

Notable stocks in my bellwether group include TSLA up 19.5%, NVDA up 11.3%, SHOP up 7.5%, NFLX up 7.9%. AAPL usually gets the press coverage but it’s a laggard at up 3.6%. Still, it’s just eight trading days.

(click on the chart for a larger view)

#MarketTiming – with not much fanfare Santa slips into view

On a FED day as the Federal Reserve held firm on low interest rates, it appears the annual Santa Claus rally may have quietly slipped into view despite the tight trading of the past few days.

Possibly it’s even set up a for a fast move by the tight trading.

Appropriate timing, I guess, since it’s hard to fathom this market continuing to rally on anything other than the FED pump, pump, pump…

Regardless, the NYMO put in a low above a low today (see the chart below), to go along with the important NYSI’s rise for the past four days. That completes the breadth pattern that is a most reliable trigger for a sustained up swing.

Since the last time the NYMO put in a low above a low on October 8th, SPY has rallied seven percent.

I would venture to suggest about the only thing that could abort the rally would be the Tweeter in chief scattering the trade-talk sticks again. Reportedly he is meeting tomorrow with advisors to discuss the proposed Dec 15th tariffs against China. Since when has he listened to advisors? So anything can happen.

In the meantime, one has to respect the signals and be long, and buying dips, until further notice.

(click on the chart for a larger view)

$SPY #Options – day trading calls 10/15

The market context for these trades is outlined in this post – #MarketTiming – the NYMO low above a low. It is in place.

ENTRY:

FIRST HALF PROFITS:

CLOSE OF TRADE:

All Twitter time stamps are Pacific time.

PLEASE NOTE: None of the entries in this blog should ever be construed as investment advice or trading recommendations. They are presented solely for entertainment and educational purposes, and to record trading activities for my own personal trading journal.