Monday, October 26, 2015

Market update

Previous market update here

We will not take any ST positions before FOMC meeting announcement on 10/28 - may be we will stay in cash 1 - 2 days later as well. 

The market exceeded the bullish expectations we had at this time . This was at a time when everyone and their mother including, were bearish and short the market. Everybody was clamoring for providing a good bearish number, most of them around SPX 1500 - 1600. So, where are these bearish pundits now after that breath taking rally in the last 2 - 3 weeks? Are they still short? ;) 

Many pundits are talking about this being the market top for the IT frame - we are trend followers, so we don't see any sell signal at this time. We will post when there is change in the update. 

Let's be honest, we were also not expecting this huge rally from /ES 1950. But, our stance is different = We do not have predictions usually, the above one is a rare instance. Hence, we are not shocked about this rally.  Usually we check our charts and take bullish/ bearish positions with an objective of scaling out in profit.  

Some of the positions taken previously (please updated "SilverVen's 100k portfolio for details):

Short $AAPL @ 110.22 - stopped out 2%
Short $SPY @ 200.3 - stopped out 2%
Long $TSLA @ 229.3 - Stopped out 2%

= Currently no positions

The 100k portfolio reflects all the above ST trades - does n't include the IT/ LT positions.

Current market update

ST - Buy
LT/ IT - Buy

We were stopped out of LT/ IT short $SPY positions in our fund @ /ES 2035 as mentioned in our blogspot several times, the last time being here . Even now our line of sand for IT/ LT positions is /ES 2035.

In IT/ LT positions for our fund, we flipped from sell to buy $SPY. 

Our indicator remained bullish throughout, from ~ SPX 1950 or so - please see chart below:

The blue arrow is where we took a ST short position previous week = false signal

Thursday, October 15, 2015

Market update

Previous market update here

ST - changed from buy to Sell
IT/ LT - Sell

Check the real time trading portfolio on the right panel of this post for updated trades...

2 new trades as shown below, 2% stops

Monday, October 12, 2015

Market update

Recently we have launched a $100k trading portfolio. Please click the link, titled "SilverVen's 100k trading portfolio", on the right side of this post.  The trades are revealed to the public in real time on twitter or stocktwits ; The spreadsheet in the link will reveal the same, and track the previous trades. 

Last trades 

Closed SPY from $192 to $199; closed XIV from $24.6 to $27.85

Previous market update here

Current market update

ST - Buy since Oct. 2nd
IT/ LT - Sell

The market has been on a ST buy since Oct. 2nd. The market still is on a ST buy. We closed the ST long positions merely to avoid volatility before the FOMC on 10/08. The liquidity (based on our charts) is considerably better compared to June - Sept. We are about almost to get a buy signal on the IT as well. 


Monday, October 5, 2015

/ES - Inverse Head and shoulders pattern

Current market update here

Chart below with notation, click to enlarge. Keep an eye open for this pattern; we might trade different ideas though.

Sunday, October 4, 2015

Market update

Previous market update here

After we posted our market update before the Sept jobs report, the pre-market tanked to /ES 1890 on Oct. 2nd. At that time, as posted in our blog, we were long on short term. Haven't been stopped out or we didn't add any longs to our position. But, should you have followed our post, you would have benefited from the dip.

Current update

ST - Buy
IT/ LT - Sell

Current positions

We have closed 50% of our ST long position, since scaling out is our strategy. That way if we are stopped out lower, we wouldn't be in loss. Rest of the ST position will be stopped out (lower) or closed when the turn comes (higher). 

IT  - Short from SPX 2078
LT - Short from SPX 2050


Saturday, October 3, 2015

Cycles and bear markets - 1: US real estate

Previous market update here

We have some interesting stuff about the market update, that is for tomorrow. 

Out there in the www world, we have seen that the forecast of a bear market bottoming at SPX 1550 - 1600 is very popular. Now, everybody is 100% sure that this is a bear market. Nobody is doubtful abouut this. There are no questions about it. The focus is on forecasting the bottom and the time of bottom now. The number of experts with the forecast of  bottom at SPX 1500 - 1600 is increasing. 

Does the stock market actually take the pundits's permission to bottom at XYZ number? We have no idea how they can come to a conclusion of market bottom when neither the market top or bear market is confirmed by them. 

Let us focus on the title here. Chart below, click the chart to enlarge:

We use the US real estate index as one of the metrics to guage the stock market pulse from time to time.  

- US real estate index made a lower high in June 2015 when the market topped - comparison to 2007 when the US real estate index made a lower high in Oct. 2007 when the market topped

- This assumption will be invalid if the US real estate index breaks higher than Jan 2015 high, then expect the market to break higher - comarison to 2011 when the US real estate index broke higher in 2012 invalidating the market topping speculations in 2011. 

- Caveat: The US real estate index actually bottomed in 2000 when the stock market topped. The US real estate index is tracked in from 2000 (no prior data) but if you are not a kid then, you would certainly know the US real estate in the real world topped in 1997 - 1998 while the stock market bubbles blew into the year 2000. We are not ruling out the same happening now as well. 

How do we trade this? 

Like we said above, this is only one of the guages that we look at. We do not trade based on it. But, these comparisons provide confidence to the long term outlook. 

Almost all of the guages have confirmed US stock indices topping in July 2015. Our line in sand for the long term outlook is SPX ~ 2050. If the monthly chart closes above it, then the market topping theory is off. 

Good luck to all! 

Friday, October 2, 2015

Market update

Previous update here

What did we say in the previous update?

At SPX ~ 1978 on Sept 15th, we said "The odds of the market becoming bearish again have increased as our guage indicates below and primed for the market to move south. "

Here we are today at SPX 1923 after a low of SPX 1871 2 days back. I hope you made the best of the market going down.

What did we do after the previous update?

At the time of previous update, we were positioned all bearish in all time frames. The market spiked up in FOMC's bullishness to > SPX 2000 and then went down for the last 2 weeks. We covered the ST short positions on the downturn. Not at the bottom but on the rebound at SPX 1890. 

I hope you got the summary of my post and traded the same way! When in doubt, ask questions. Simple. 

Why was this blog quiet for 15 days?

When there is no change in the update, no posts are done. 

Traders are often frenzy aiming for 100% in 10 days or 1000% returns in 90 days. Come on, people. Be modest in your expectations. And then trade calmly. You don't have to flipflop your positions every single minute to score big annually. 

You get the outlook correct. You get in the positions. If you are wrong, get stopped out. Otherwise you have a chance to score 2 - 3% on the ST. Few scores like this will take your account to 20 - 30% up annually. Trading every minute takes your account to zero in no time, Believe me.

Current market update

As the chart below indicates, the market is primed for ST (short term) neutral to bullish. We use other guages as well to position ourselves, which currently indicate for a bounce short term.

ST - Buy
IT/ LT - Sell

Our positions

This is a counter trend ST move against IT/ LT bearish outlook. Usually we position 50% of our account in ST, 20% in IT, 30% in LT. Since this is a counter trend move, we position only 30% of our account in ST.

Always remember, we are mostly right. We are not always right. When we are wrong, that is when stops are useful for us, stops are useful for you as well.  

Good luck trading to all! 

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