Market Timing Blog Archive

Market Timing Blog Archive: Market Timing, Investing and Trading Strategy, Dollar Index, and Fundamental Extended Intraday Comments: A Technofundamental Approach

Links to prior Market Timing Posts:

Market Timing Archive 09-09-2010 to 09-16-2010

09-09-2010: Market Timing Blog 11:55 pm ET

What Do Market Timing Signals Say About Where GLD / Gold is Headed? PART 2

$GLD $GDX The GLD ETF (Gold ETF) had it's FIRST HIGH VOLATILITY down day since the July low of 113 which I called a BUY. The over-expected GLD market timing breakout is now LESS LIKELY to occur for now. Oh, it may come in the future, but what I look for to make early calls on markets is "new behavior." If gold does something "new" near a high and that "new" behavior points down, then it's a time to either be ready to exit or to take some profits. Please read my earlier blog entry from today just below for further discussion.

09-08-2010: Market Timing Blog 10:21 am ET
You Are Getting Double the Return for Your Money Here:
One great "trick" when market timing and playing an UP opening the next day is to buy that which is the most or more volatile. You can pick an ETF or index according to your risk tolerance.

For example, in the first half hour of trading this morning the Russell 2000 index (RUT) was UP 0.78% vs. 0.40% for the SPY (SPX). That is about a 2:1 bang for your buck. Of course, it works the other way too, if you are wrong, so you still have to watch how much risk you are taking on. Now things did change a bit later, so that now the two indices are trading about evenly at 10:18 am, but the point of this example is to point out that in general, you will get more volatility from small caps than large caps and you can TAKE ADVANTAGE OF THAT!

So when you are buying a pullback, don't just use market timing principles to enter. ALSO DECIDE HOW MUCH RISK you want to take on in choosing your ETF or stock to invest in. Pick a more volatile stock or ETF when you are more "certain" of your take on the market.

09-01-2010: Market Timing Blog 2:09 pm ET
$GLD $GDX GLD support levels at the moment
are 121.40, 121.05, 118.37 and 114.86. A strategy that could work if you are "too long gold" is to scale out at each level. How? I will send you a free copy of my E-Booklet explaining it if you subscribe to the FREE "Tips" newsletter. In the box above put "SEB" for "SCALING E-BOOK" to the right of your first name, so I will know you want it. There are good and not so good ways to scale in and out of an ETF.

09-01-2010: 10:37 am ET
$GLD $GDX $SPX $SPY If you have been in what has BEEN working, it's likely not working today and may not work for a while! Don't get stuck in the headlights. We have a clear market timing signal for stocks and ETF's that have not been working well until today as long as this holds.

Average OUT and see my Passive Shorting™ process page on the navigation bar to the upper left if you have questions about how to do this. Consider dropping some bonds, gold miners, gold, and you might even get some commodities to replace some of your gold. Scale into things that are now "working." Remember this all assumes this breakout HOLDS into the close.

As I said, consider scaling in and out rather than selling/buying it all at once. Usually that pays off.

If you do NOT know how to scale in and out, you can receive a free copy of my free E-Booklet "How to Scale In and Out of the Markets Profitably" on request by simply becoming a FREE "Tips" newsletter subscriber (Please put your requested report to the right of your First Name in the subscription box or I will not know what report you want. You also get immediate access to my private (but free) market comments. (The FREE Subscription Box is Above. I will NOT share your email address period.)

Market Timing Blog for 8-31-2010: 1:39 pm ET
$SPX $SPY $VIX The market is caught in a trading range of volatility and price. You can place a bet here, but the smarter thing would be to wait for the market to show it's hand and reveal its direction. It is either going to break DOWN or UP. And although that may seem obvious, it can save you a lot of money by waiting for the direction to appear. If it breaks up through the consolidation, buy. If it breaks down through the base of the consolidation, sell and sit in cash or go short as well. And beware of fake-outs.

7-22-2010: Market Timing Blog 12:58 pmEDT
If they hold this above SPX of about 1092.73 (much watched 50 day moving average, the Bulls have a chance to make it back to 1100. That 1100 will likely be a great short, but we won't judge that one yet.

7-22-2010: Market Timing Blog 9:02 am EDT
The BEST that the SPX can probably do is get back to the down trend line at about 1086 or to yesterday's high at 1088.96. That would add another bit for a total of 1.81% return from yesterday's close or about 0.83% more than WAS in the market at 8:39 or so. SPX futures are up 1.34% now.

7-22-2010: Market Timing Blog 8:39 am EDT
We are going to sell this gap this am. Again, for short term traders. You can still get almost all of what the market sold for just before the worse than expected unemployment number. The SPX futures are up 11.60 points. The SPX are selling JUST below the point of recovery of the "Chairman Bernanke loss." Actually SPX could move a bit higher to 1082.40 which was the actual inflection point of the SPX as his speech was rapidly processed. We could continue up after the open to that number which would add about ONLY 0.128% (total 1.198%) to what you can get now in the market on the SPY for example (0.98%). (SEE ABOVE POST - there is a poss. of a bit more of a run before the first intraday pullback)

You can check this against the particular index you are trading and make that judgment. The likely scenario is that we trade up to the pre-Chairman number and trade down from there.

The rest of the possibilities and strategies are in last night's newsletter.

7-22-2010: Market Timing Blog 12:58 pmEDT
If they hold this above SPX of about 1092.73 (much watched 50 day moving average, the Bulls have a chance to make it back to 1100. That 1100 will likely be a great short, but we won't judge that one yet.

7-22-2010: Market Timing Blog 9:02 am EDT
The BEST that the SPX can probably do is get back to the down trend line at about 1086 or to yesterday's high at 1088.96. That would add another bit for a total of 1.81% return from yesterday's close or about 0.83% more than WAS in the market at 8:39 or so. SPX futures are up 1.34% now.

7-22-2010: Market Timing Blog 8:39 am EDT
We are going to sell this gap this am. Again, for short term traders. You can still get almost all of what the market sold for just before the worse than expected unemployment number. The SPX futures are up 11.60 points. The SPX are selling JUST below the point of recovery of the "Chairman Bernanke loss." Actually SPX could move a bit higher to 1082.40 which was the actual inflection point of the SPX as his speech was rapidly processed. We could continue up after the open to that number which would add about ONLY 0.128% (total 1.198%) to what you can get now in the market on the SPY for example (0.98%). (SEE ABOVE POST - there is a poss. of a bit more of a run before the first intraday pullback)

You can check this market timing scenario against the particular index you are trading and make that judgment. The likely scenario is that we trade up to the pre-Chairman number and trade down from there.

The rest of the market timing possibilities and strategies are in last night's newsletter.

7-21-2010: Market Timing Blog 5:05 pm EDT
If you look back at the Tweets today, it was at 3:02 pm that I first smelled a turnaround point and so I looked at the 1 charts. The number that was hit at the low was just above the 1064.88 number we closed at on Friday the 16th as I've been calling it today. The SPX got to 1065.25 and bounced a little bit. That was enough to "detect" it. From there the market was noisy and traders were getting kicked around, but the market held that level and then slid into the close, down a bit by 0.18 on SPY after the close. But the VIX fell afterhours. I'll discuss that further in tonight's newsletter.

Market Timing Blog Tip: When a market slows down and pauses as it did last Friday when it's on the way up, it can lead to a reversal. The same thing applies to the downside. When a market has fallen a fair amount and then pauses at an important landmark, it often rallies.

We are in a Bear market. The rule is: Buy a bit late and sell a bit early with your market timing. You don't want to try to catch a bottom on the way down in other words. And you don't want to hang around at resistance. It's safer to take profits at resistance points until the Bear becomes a Bull. And that point is a matter of proving technical strength that I look for every night.

Market Timing Blog Comment My gold SELL a while back was again affirmed today. It "smelled funny" that GLD was rising so timidly into the consolidation range where it just broke down. That means it broke through the base and then crept up above that base. Today it failed again and should be headed to our lower GLD target.

I can't give all our numbers away. The distance from here to our target will first save you more than double the newsletter cost for a year if you invest just $10000 in this trade. And on the way back up you can potentially make that back again. If you don't understand this, please read the Passive Shorting™ page (see navigation bar).

7-21-2010: Market Timing Blog 3:50 pm EDT
Now if the SPY's could close above the close of 107.29 the Bulls would be doing better. Let's see what they can do. This trade is back to resistance only until proven otherwise and it may not even get that far. This could just be a serial step down. This is about the intraday or one to two day time frame.

7-21-2010: Market Timing Blog on the VIX 3:26 pm EDT
VIX close below 26.25 would be positive for Bulls although they still are in trouble with that overhead resistance. Remember this is a trading range at the moment, not a great buying point.

7-21-2010: Market Timing Blog on VIX 3:26 pm EDT
Trouble again. VIX back TESTING RIGHT AT 26.25. This is the key fight. I am talking about making a trade here only. There is no evidence of strength as discussed for long term positions. This may only last for a day or two or less.

7-21-2010: Market Timing Blog on VIX 2:55 pm EDT
SPX is now dealing with VIX above 25.80 which you will recall from the other day. It's above there at the moment, which favors the Bears and a deeper sell-off. The VIX in fact as I type has just crossed above that 26.25 number (for now). We will have to see if this all sticks into the close.

TYPO Corrected in bold below:7-21-2010: 11:28 am EDT
VIX close ABOVE 26.25 would be good enough for Bears. That would set up a close above all the other recent closes. Then we need to take out resistance at 28.16 by closing above there to confirm a deeper sell-off in the SPX.

We have fallen from resistance as we said we could last night. Tested and failed 1080 initially, but have now climbed above it. The VIX started it's current intraday decline at about 11:38 am EDT.

7-20-2010: Market Timing Blog 5:41 pm EDT
A dollar index move above 82.82 will not be good for the SPX.

The VIX move is positive. Tonight I'll outline what the trading / market timing parameters are in the newsletter. It appears that we can at least get back up to the 1088 level. Then we see. It would be very unusual to see the market suddenly just shirk off the entire sell-off from Friday.

Just look at the SPX chart going back over the last year. Do you see any "straight up" moves after declines from resistance as we had on Friday 7-16? No, it's rare. Generally when the market jerks up quickly, it just brings on the next selling wave. The SPX did do this at one point in the past. I'll reveal that date and the market timing strategy to use in tonight's newsletter.

But now I will tell you what happened. Although a similar rapid move up occurred at a similar moment on a technical basis during a previous sell-off, the rally eventually reversed EVEN after a brand new high was made and then a Bear market followed or resumed depending on how you look at it. You can probably now figure out which rally I'm writing about. At any rate, this rally will likely fail as well. But we are Perma nothing hear, not perma-bear or perma-bull. We are perma-conscious. Or we do our best to be!

We will re-enter ONLY after a certain amount of strength is proven in the SPX, and we are not there yet.

The fact that they like the AAPL earnings does not mean it will necessarily help the overall market as I mentioned today on the Twitter systems. After the close the market only moved up a bit higher after Apple's earnings, while Apple was up over 6% initially (up a bit less now).

Chairman Bernanke is on the Hill tomorrow. I guess "Hills" was not canceled. That could tweak the market one way or another. Actually there is more often a positive bias with him as he speaks well/sounds sane whether you agree with his approach or not. He could help the market to that 1087-1088 number.

It's generally best not to jump in or out of the market in one move. You have to make a judgment. Sometimes it could be OK to do that, but generally not. Most would recommend holding a core portfolio even if it is just 20% stocks, whereas others may feel that is too little. They might say to move between 40 and 60% stocks for example. You would move down to 40% coming down off a high as in 2007 or perhaps now, but scale out in steps, not all at once. And when you re-enter, you scale in.

Please do what is comfortable for you. You are the one who will live with the decisions. Never follow any advice or opinion until you find it is intuitively true FOR YOU. If not, determine what is true in your opinion. That is the way to use external information and advice in your investing and trading to the greatest benefit.

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Beyond the Market Timing Blog: I wrote an E-Booklet for subscribers to the newsletter that shows you the advantages and disadvantages of scaling in and out fast vs. slow. It even shows you how you would have done in 1987 crash. Scaling out worked even then. But you need to know how. By subscribing you get not only a free 2 week trial but also the E-Booklet on "Scaling In and Out Profitably."
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7-19-2010: Market Timing Blog 3:49 pm EDT
Prior post updated:If the VIX can stay BELOW 25.80 now, there is a chance for the market to rally back up to resistance which could be as high as 1088ish to the last high at 1099.46. So there is a defined "risk" of a rally if the market can hold below that VIX value. Then the VIX could form a double bottom and then bounce and bring down the market again. But once we get to that 1100 area, the big test comes, we'll have to see how the market behaves. If it can go cleanly through there it will have to deal with the June high resistance that I wrote about last night.

Failed the second try at the breakout for SPX. VIX is at 25.63 right now. Realize this is just a potential for a rally. It may not occur and sometimes the SPX leads and the VIX follows.

In any case, the reward: risk is poor as I wrote in one of my Tweets. 0.48 to 1: at that time it was 13 points up and to 1040 target would be 34 points down.

At this very moment, the SPX was sent DOWN from the early high from today, but is just now making another try. It is a failed breakout; however, the VIX is below 25.80, which would be a positive for the Bulls. There is plenty of time for the VIX to climb though. The intermediate term trend is still down until proven otherwise.

7-19-2010: Market Timing Blog 3:04 pm EDT
If the VIX can stay BELOW 25.80 now, there is a chance for the market to rally back up to resistance which could be as high as 1088ish to the last high at 1099.46. So there is a defined "risk" of a rally if the market can hold below that VIX value. Then the VIX could form a double bottom and then bounce and bring down the market again. But once we get to that 1100 area, the big test comes, we'll have to see how the market behaves. If it can go cleanly through there it will have to deal with the June high resistance that I wrote about last night.

At this very moment, the SPX was sent DOWN from the early high from today, but is just now making another try. It is a failed breakout; however, the VIX is below 25.80, which would be a positive for the Bulls. There is plenty of time for the VIX to climb though. The trend is still down until proven otherwise.

7-19-2010: Market Timing Blog 10:26 am EDT
Not likely to come into play but 25.80 on the VIX would be the downside cap. If it crosses there even intraday, it would spur a rally. Remember that whenever I say rally through, I MEAN THROUGH, that is, not stopping a fraction above and cutting hard back the other way. The latter is a fakeout, not a breakout.

The VIX may have already made it's low for the day.

Banks are trailing the SPX (S&P 500) which is negative.

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Market Timing Blog Archive Week of 7-12-2010