MON - FEB 29 2016

SGS_LT  Market Timer Status:  SHORT 

Short as of close of Dec 11, 2015
SGS_LT is a Long Term (weeks to months) timer

Current Long Term Portfolio (2016)
Updated for recent trades

Past Long Term Portfolios (2008-2015)

sgs_st  Market Timer Status:  short 

Short as of  1:00 PM on Feb 18, 2016

sgs_st is a short term (hours to days) timer for SPX
(short term trading record of SPY using sgs_st will be posted soon. I'm waiting for a change in sgs_st status)

If you like this blog and find it useful, then please help me get more traffic to it.  Please spread the word. Thank You.


@ 20:10 - Internal and breadth data suggests that selling should continue tomorrow.  Chances are good that SPX tests support at 1920 which would be a good place to cover short term short positions.



@ 14:35 - Bears need SPX to break out of trading channel to the down side.  Chances are good that happens very soon:

@ 11:40 - SPX possible break out of the bull flag to the upside, waiting to see where SPX closes on its hourly candle:

@ 09:45 - Possible bull flag:

@ 09:25 - Support: 1945, 1925, 1920
                 Resistance: 1960

  

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SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: Nasdaq 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

2016 Versus 2008

In recent weeks, much has been written on the subject of a coming financial crisis similar to 2008 and whether or not it could as bad as or even worse than the 2008 crisis.  There is no crystal ball where one can look in and predict with 100% certainty what is about to happen, but there are two similarities between now and then that are alarming:

• (1) The Underlying Cause - The 2008 financial crisis started when the five year (2002 - 2007) housing bubble popped in late 2007.  When the bubble in the US real estate popped, it triggered the explosion of an enormously bigger bubble in the high yield debt which had been created on top of the housing bubble.  In a way, the correction in the US housing market was the little explosion that detonated the mortgaged-backed high yield financial nuclear bomb.
  
  Similarly, from 2009 to early 2015, a new high yield debt device was created, then aggressively marketed and sold.  This new high yield debt was constructed this time on top of the bubble in the oil and fossil fuel industry.  Now that the bubble in oil and energy has popped, markets around the world are waiting to see if that little blow up is going to detonate another financial nuclear bomb.
  
  
• (2)  SPY Chart Patterns - In 2007 a large Head and Shoulders Top (H&S Top) price pattern was formed in SPY weekly chart, as shown in black in the chart below.
  
  
  
  The Right Shoulder (RS) of that H&S Top pattern was made up by yet a smaller H&S Top price pattern (shown in red).  When SPY finally broke through both necklines of those H&S Tops (SPY 120), it continued its sell off until March 2009, when the Fed intervened with its QE and stopped the financial meltdown.
  
  In the current SPY price chart, shown below, a similarly large H&S Top price pattern (shown in black) has been formed.  The RS of that price pattern is being formed now. Similar to what is shown in 2007 SPY chart,  the bigger RS in the current SPY chart is interestingly made up by yet a smaller H&S Top pattern (shown in red).
  
  
  
  SPY has been trading below the Neck Line of the larger H&S Top since early January.  Once SPY closes below the Neck Line of the smaller H&S Top and starts trading below $180, then chances would be excellent that SPY sells off more until the Fed is forced to intervene again.

Long Term Outlook (Weeks to Months):

SGS_LT Market Timer Status:  SHORT 

Short as of close of Dec 11, 2015
SGS_LT is a Long Term (weeks to months) Timer

Current Long Term Portfolio (2016)
Past Long Term Portfolios (2008-2015)

Longer term (weeks to months) picture has not changed much since last week.   SPX is trading within a bear flag (brown lines shown on chart above).  Chances are good that SPX sell off this coming week and falls through the bear flag sometime later in week.  

Short Term Outlook (Days to  to Weeks):

sgs_st  Market Timer Status:  short 

Short as of  1:00 PM on Feb 18, 2016

sgs_st is a Short Term (hours to days) Timer

(short term trading record of SPY using sgs_st will be posted soon. I'm waiting for a change in sgs_st status)

 
Shorter term, chances are good that the short term bear market rally since SPX 1810  ended on Friday at SPX 1962.

MY Plan:

No change. Depending what price action is seen around 1830, I might cover all short positions or keep them open.  Should SPX sell off, take out 1810 and close below it, I would do my third and final short sell in SPY and QQQ.

On Friday 2/19 I opened my first of 10 positions (equal $) in UWTI.  My plan is to add to that position on days that WTI Crude is down 4% or more.

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SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: Nasdaq 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

Disclaimer: The views expressed are provided for informational  purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

FRI - FEB 26 2016

SGS_LT  Market Timer Status:  SHORT 

Short as of close of Dec 11, 2015
SGS_LT is a Long Term (weeks to months) timer

Current Long Term Portfolio (2016)
Updated for recent trades

Past Long Term Portfolios (2008-2015)

sgs_st  Market Timer Status:  short 

Short as of  1:00 PM on Feb 18, 2016

sgs_st is a short term (hours to days) timer for SPX
(short term trading record of SPY using sgs_st will be posted soon. I'm waiting for a change in sgs_st status)

If you like this blog and find it useful, then please help me get more traffic to it.  Please spread the word. Thank You.


@ 19:30 - Deja Vu? Interesting chart below:

@ 14:35 - Possible bull flag (in pink)? Bears need a close below DTL today.

@ 13:50 - This is funny:

@ 13:00 - Interesting development, Rubio OUT / Christie IN as VP for the Donald.

@ 11:15 - SPX has been moving in lockstep with Crude for a while now.  Chart below shows that selling in crude very likely continues:

@ 09:00 - Support: 1945, 1925
                 Resistance: 1960

  

@ 09:00 - Oscar Carboni

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SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: Nasdaq 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

THU - FEB 25 2016

SGS_LT  Market Timer Status:  SHORT 

Short as of close of Dec 11, 2015
SGS_LT is a Long Term (weeks to months) timer

Current Long Term Portfolio (2016)
Updated for recent trades

Past Long Term Portfolios (2008-2015)

sgs_st  Market Timer Status:  short 

Short as of  1:00 PM on Feb 18, 2016

sgs_st is a short term (hours to days) timer for SPX
(short term trading record of SPY using sgs_st will be posted soon. I'm waiting for a change in sgs_st status)

@ 23:15 - Internal and breadth data was bullish today.  Also SPX closed and traded above its 50 D-SMA for the first time since 12/29/2015.  GDP and Consumer Confidence data is released tomorrow at 08:30.  That data could move indices dramatically.

@ 14:45 - So far 50 D-SMA has held up very well.  There has not been any price penetration which is good news for bears.
 
@ 14:05 - SPX is about to test resistance at its 50 D-SMA:

@ 09:50 - The Fed Prepares to Dive?

@ 09:00 - Possible bear flag on SPX weekly:

@ 8:50 - Support: 1920, 1900, 1885 
               Resistance: 1935, 1945

 
If you like this blog and find it useful, then please help me to get more traffic to it.  My oldest daughter who is a graduate student monetized my blog and she is hoping to make a couple of hundred dollars a month via letting Google show ads on the side bar.  Please pass the word. Thank You.

twitter
facebook (comments)

opader@gmail.com

SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: Nasdaq 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

WED - FEB 24 2016

SGS_LT  Market Timer Status:  SHORT 

Short as of close of Dec 11, 2015
SGS_LT is a Long Term (weeks to months) timer

Current Long Term Portfolio (2016)
Updated for recent trades

Past Long Term Portfolios (2008-2015)

sgs_st  Market Timer Status:  short 

Short as of  1:00 PM on Feb 18, 2016

sgs_st is a short term (hours to days) timer for SPX
(short term trading record of SPY using sgs_st will be posted soon. I'm waiting for a change in sgs_st status)

If you like this blog and find it useful, then please help me to get more traffic to it.  My oldest daughter who is a graduate student monetized my blog and she is hoping to make a couple of hundred dollars a month via letting Google show ads on the side bar.  Please pass the word. Thank You.


@ 21:15 - Internal and breadth data were neutral.  Chances are good that SPX tests its 50 D-SMA around 1945 tomorrow.  A close above that resistance would be bullish.

Tomorrow Durable Goods Orders and Jobless Claims can move futures dramatically.  Also on  Friday GDP and Consumer Sentiment  can moves futures dramatically as well.  Interesting two days are coming our way, fasten your seat belt.

@ 14:50 - The rally from LOD (1891) is impressive.  It seems to be a 50/50 combination of short covering and dip buying in individual stocks.  Where indices close today would be very interesting and telling as far as where indices are heading this week:

@ 12:20 - There is a rally happening now, but it could be all just a short covering / profit taking rally.   There is still a good chance that indices sell off and SPX hits around 1880 as its LOD.

@ 10:20 - SPX has a good chance of selling off to 1880 today, good place to close short term short positions.

@ 9:45 AM - SPX is selling off to test neckline again around 1880 to 1885:

 
@ 8:45 AM - Interesting video by Oscar Carboni

@ 8:00 AM - Support: 1900, 1885 /  Resistance: 1925

Index futures and oil are sharply lower this AM, this is the reaction to Trump winning, imo.

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SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: Nasdaq 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

TUE - FEB 23 2016

SGS_LT  Market Timer Status:  SHORT 

Short as of close of Dec 11, 2015
SGS_LT is a Long Term (weeks to months) timer

Current Long Term Portfolio (2016)
Updated for recent trades

Past Long Term Portfolios (2008-2015)

sgs_st  Market Timer Status:  short 

Short as of  1:00 PM on Feb 18, 2016

sgs_st is a short term (hours to days) timer for SPX
(short term trading record of SPY using sgs_st will be posted soon. I'm waiting for a change in sgs_st status)

@ 10:33 PM PST :  Market internal and breadth data suggests that the sell off very likely continues tomorrow.  I expect SPX to test 1900.

@ 3:35 PM - Bears could use a nice whoosh into the close.  If that happens, SPX very likely would test its DTL around 1906 tomorrow, good place to close all or at least 1/2 of put positions:

@ 2:05 PM - On weekly, SPX successfully back tested it DTL, resistance held with no penetration ... good sign for bears:

@ 1:56 PM - Waiting for indices to take out their LOD's before adding more shorts (SPY and SPY puts, short term trading only).

@ 1:10 PM - A small bear flag is being formed:

@ 12:40 PM - Bears need a close at or below 1915 today ... that would very likely send SPX to test 1900 tomorrow. 

@ 11:26 AM - It seems negotiation among US, Russia, Saudi Arabia and Iran over Syria is hitting major sangs, so oil war is back on and by proxy risk off.

@ 10:55 AM - SPX is about to test support at 1925 (old PDL-1 trend line).  A close below that line today would signal a move to test 1900.

@ 10:17 AM - SPX is not trading below its 13 H-EMA (hourly chart).  Bears like me need a close below that.

@ 9:46 AM - Support: 1940, 1925 /  Resistance: 1950    

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SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: Nasdaq 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

MON - FEB 22 2016

SGS_LT Market Timer Status:  SHORT 

Short as of close of Dec 11, 2015
SGS_LT is a Long Term (weeks to months) Timer

Current Long Term Portfolio (2016)
Updated for recent trades

Past Long Term Portfolios (2008-2015)

SGS_ST  Market Timer Status:  SHORT 

Short as of  1:00 PM on Feb 18, 2016

SGS_ST is a Short Term (hours to days) Timer for SPX

@ 11:10 PM ..... Market internal and breadth data suggests that the rally from SPX 1810 peaked today at 1946 ... SPX futures are down around 8 points, let's see what tomorrow brings.


@ 2:25 PM .... SPX has formed a small bear flag (pink) on its hourly chart below.  A move down outside of the flag would signal more selling into the close today:

@ 11:45 AM ...Weekly DTL (13 W-EMA) seems to be the resistance that SPX has to overcome for the rally since 1810 to continue:

  
@ 9:15 AM ....
Support: 1925 - 1900
Resistance: 1940-1950

Specific support (red up arrows) and resistance (green down arrows) levels are shown on SPX daily chart below:

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SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: NASDAQ 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.

Is Current Bear Market Rally Over?

SGS Market Timer Status:  SHORT 

Short as of close of Dec 11, 2015
SGS is a Long Term (weeks to months) Timer

Current Long Term Portfolio (2016)
Updated for recent trades

Past Long Term Portfolios (2008-2015)

Is Current Bear Market Rally Over?

Very likely yes and selling should resume on Monday.  Here's why:

• Fundamentally (Global Macro View):  Economies worldwide are slowing down to no, or at best anemic, growth.   Central banks have reduced interest rates to zero and sub zero to no avail.   The amount of goods and services being produced is far exceeding the amount being consumed.   The global consumer is either too old or too poor to consume all of that production.  There seems to be no way out of this stagflation / deflation cycle.

• Politically:  Donald Trump is going to be the likely  nominee for the Republican Party.  That brings a great deal of uncertainty to equity and bond markets.  Markets hate uncertainty.  When faced with so much uncertainty, there is only one way they go and that way is down.

• Technically: SPX reached its All Time High (ATH, 2134) on May 20, 2015 and since then SPX has lost 10% as of close of last Friday.  From late August 2015 to early February 2016, there were four bear market rallies and SPX gained an average of 10% during each of those rallies.  Except for the rally from 9/29/2015 low (1871) to 11/3/2015 high (2116) the gain has been lower and lower for each rally.  Furthermore, market internals and breadth deteriorated more during each rally.
  
  A study of the number of new highs (NH) versus the number of new lows (NL), summarized below, supports that the recent rally from 2/11/2016 low (1810) very likely ended at 2/17/2016 high (1930).

Long Term Outlook (Weeks to Months):

As shown on chart above, from 1990 to 2007 SPX traded below its 13 Q-EMA three times,  Every time that happened the US economy entered into a recession 2 to 3 months later and SPX continued its sell off for at least another year.  Those were recessions of 1991-1992, 2000-2002 and 2008-2009.

From 2009 to 2015, SPX traded below its 13 Q-EMA twice, but both times the Fed intervened by starting more QE rounds (QE-2 in Aug 2010 and QE-3 in Nov 2011) which shored up indices and avoided a recession.

The long term picture has not changed.  SPX penetrated its 13 Q-EMA and traded below it on Feb 12 by 3%.  Chances are high now that the US economy enters or has already entered into a recession.  Unless the Fed intervenes again and starts another round of QE, indices continue to suffer.

Short Term Outlook (Days to  to Weeks):

SGS_ST  Market Timer Status:  SHORT 

Short as of  1:00 PM on Feb 18, 2016

SGS_ST is a Short Term (hours to days) Timer

Shorter term, chances are good that SPX continues to sell off.  Once SPX starts trading below its AUL, then the likelihood of further sell off to retest of recent lows becomes high.

MY Plan:

Depending what price action is seen around 1830, I might cover all short positions or keep them open.  Should SPX sell off, take out 1810 and close below it, I would do my third and final short sell in SPY and QQQ.

Last Friday I also opened my first of 10 positions (equal $) in UWTI.

twitter

facebook (daily updates)

opader@gmail.com

SPX: S&P 500 Index    D-SMA: Daily - Simple Moving Average
DJI: Dow Jones Industrial Index    D-EMA: Daily - Exponential Moving Average
DJT: Dow Jones Transportation Index    PDL: Primary Downtrend Line
NAZ: NASDAQ Composite Index    PUL: Primary Uptrend Line
RUT: Russell 2000 Index    ADL: Active Downtrend Line
OEX: S&P 100 Index    AUL: Active Uptrend Line
NDX: Nasdaq 100 Index    DTL: Dynamic Trend Line   
TUL: Tentative Uptrend Line   TDL: Tentative Downtrend Line  

Disclaimer: The views expressed are provided for information purposes only and should not be construed in any way as investment advice or recommendation.  Furthermore, the opinions expressed may change without notice.