Mid-Term Election Is Critical

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

The upcoming mid-term election is critical. There is a good chance that Reps lose their majority in the House but if they also lose their majority in the Senate, indices would sell-off significantly and lose most of their gains since November 2016.  Recent events have certainly hurt Reps chances of retaining their control of the Congress.

The monthly chart of SPX is shown above.  As highlighted on the chart, in the last 25 years, SPX corrected significantly (15% or higher) when it had traded and closed below its Monthly Dynamic Trend Line (M-DTL, 13 M-EMA) for two consecutive months.  On Friday, SPX closed below its M-DTL (13 M-EMA) for the first time since January 2016.  If SPX continues to trade below its M-DTL and closes below it at the end of November, there would be a high probability that SPX sells-off substantially more to test support on its weekly chart around 2200.

SGS declined substantially last week, signaling that more selling is ahead.

Supports and resistances for SPX for the upcoming week are shown above.  Indices are oversold and chances are high that we see a rally on Monday and Tuesday this week. Those rallies would be good opportunities to open new short positions.

My Plan

I closed my SDS long positions on Friday.  My plan is to open new long SPXU positions sometime early this week as SPX resumes selling to test support at 2630 and beyond.

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)

twitter
#balancetrading
Contact: info@balancetrading.org

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

TLR: Trend Line Resistance   TLS: Trend Line Support

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.

Selling Very Likely Accelerates

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

The rebound rally from short-term oversold levels on Tuesday and Wednesday ran into strong selling on Thursday and Friday.  SPX gained only half a point for the week.  That is quite bearish and I expect selling to resume on Monday and continue at a faster pace.

The upcoming mid-term election is critical. There is a good chance that Reps lose their majority in the House but if they also lose their majority in the Senate, indices would sell-off significantly and lose most of their gains since November 2016.

SGS rebound slightly last week but on Friday it turned down and put in a lower value.  SGS is now well entrenched in the "SHORT" territory.  That signals more selling ahead, or at best a sideways move for the major indices for the next couple of weeks.

Supports and resistances for SPX for the upcoming week are shown above.  Chances are high that the selling that started on Thursday continues this coming week.  For SPX a test of its TLS around 2630 is very likely.  A close below that level this week would signal a high likelihood of more selling to test February lows around 2530, probably by late October to early November.

My Plan

Per my plan I opened my first of two SDS long positions on Thursday.  My plan is to open my final long SDS position sometime early this week as SPX resumes selling to test 2710.

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)

twitter
info@balancetrading.org
#balancetrading

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

TLR: Trend Line Resistance   TLS: Trend Line Support

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

Market Predicts Defeat For Reps If Selling Continues

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

The monthly chart of SPX is shown above.  As highlighted in the chart, in the last 25 years, SPX corrected significantly (15% or higher) when it had traded and closed below its monthly Dynamic Trend Line (DTL, 13 M-EMA) for two consecutive months.

Last Thursday, SPX tested its DTL on its monthly chart at 2710.  If selling continues and SPX trades and closes below 2710 for October, there would be a good chance that selling continues for the rest of year, especially if Reps lose the Senate in the upcoming mid-term election. 

SGS declined substantially last week, signaling more selling ahead.

Supports and resistances for SPX for the upcoming week are shown above.  Chances are high that the rally that started late last Friday continues on Monday and Tuesday as indices retrace back 40% to 50% their losses.  For SPX, I expect to see 2820 to 2840 before selling resumes.

My Plan

Per my plan I closed my SDS long positions on Friday.  My plan is to open new long SDS positions sometime early this week as SPX resumes selling to test 2710.

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)

twitter
info@balancetrading.org
#balancetrading

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

TLR: Trend Line Resistance   TLS: Trend Line Support

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.

SGS Market Timer Is SHORT

SGS  Market Timer Status:  SHORT 
SHORT as of the close of Friday Oct 5, 2018
SGS is a Long-Term (weeks to months) Timer
Why Market Timing Is A Must

Changes are good that indices are on their way to test their late January and early February lows.  For SPX, a test of 2600 is likely.

SGS declined substantially last week, closed below -50 on Friday, and changed its status from NEUTRAL to SHORT.  

Supports and resistances for SPX for the upcoming week are shown above.  

My Plan

I opened my first of three long positions in SDS on Friday.  I'm planning to add to that position sometime this week.

Current Long-Term Portfolio (2018)
Past Long-Term Portfolios (2008-2017)

twitter
info@balancetrading.org
#balancetrading
#OrangeSwan

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

TLR: Trend Line Resistance   TLS: Trend Line Support

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.