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

What happens next - Part 2

Current market rating here

I am posting 3 scenarios on what to do if you are short, long, neutral right now.

We took 50% off the ST and IT positions on 08/21 at market close, explanation below. I will let the other 50% of the positions stop themselves, higher or lower, when the turn signal is initiated. LT positions will be stopped on a close of > /ES 2035.

Anyway, where does the market go from here. As I posted in my previous post, I have no clue. Up? Down? Sideways for several days? No idea. Everyone out there is throwing darts at the market, one of the darts will hit the bulls eye. My experience tells me that instead of guesstimating what the market does next, it is best to have plans on how to manage the positions. 

• Have a plan to do if XYZ happens
• It doesn't matter if that doesn't happen, you still have a plan B if PQR happens

In other words, be flexible in this market. If you are chopped by market whipsaws, that is still ok. Take a walk and come back to trade another time. I do have suggestions on what to do if you are:

• Short right now: If you are short from ~ 100 SPX points above like us, take some off the table. That way, your profits will be ensured. Because what if the markets rally straight up from here? You have profits, so take some off the positions. Then, there are 2 scenarios. Market goes up or down. If market goes down, wait for the turn. Close the positions when the market turns. If the market goes up from here, have a stop at about SPX 2065. You still end up profitable being in short positions on this "mini crash" because you scaled out already.
• Long right now: Depends on what level you were long from. We sure hope that you didn't enter long positions at SPX 2100. If you did, you should have been stopped out before 6% down. If you entered long somewhere around, 2025 - 2050, you still should have been stopped by now. If you didn't close the longs on friday at market close and are expecting a rally next, we cannot help. Because there is no guarantee rally is going to come next. May be it will rally. May be it will not. We don't see the rally yet. Without any buying in the market in the last 3 days, how can you expect the market to rally? There are no indications right now that market will rally. That may change come Monday, but we have to see the evidence. 
• No positions right now: This is the best place to be in. :) Cash is King!!! Traders who are in cash are at a huge advantage. Traders who are short right now, have to close their short positions and then take longs - in other words, they have to be ultraflexible about 2 moves; There is a high chance that this group may miss the next up move. If you are in cash now, you are obviusly relaxed and will see the next turn better without getting whipsawed.

Do not try to trade counter trend moves, you will lose the opportunity. We were short on ST, IT, LT positions prior to market open on 08/21. But, we were "expecting" VST counter trend move upwards. We knew for sure that the market did not bottom, hence clearly mentioned this was a VST move. But, the VST move did not materialize and we got stopped at /ES 2005. As a result, we were down 0.6% on the VST move AND we lost the opportunity to profit on the VST short positions from /ES 2021 to 1970. May be VST, but still 50 points is a big move. 

Hence, do not try to trade counter trend moves.

Do not guess the up moves. 

Be nimble

GLTA!

What happens next - part 1

Yesterday we tried something foolish  , more on that foolishness in the next blog post. But, let's try to understand where we stand in this market "crash" and what is next. 

Ivanoff suggests this is a market bottom like Oct. 2014. Technical trader says puts haven't been this high since March 2007, hence this is THE BOTTOM. Is it? May be both are right. What if they aren't right? Are we trying to playing a guessing game on who is right or wrong? Are we gambling with our money on guessing?

I am going to post tomorrow what our game plan is. Hence, watch out!

1st let's look the current situation from my perspective. Last market update was this. Our market guage suggested a decline. We got a 3% decline. So, what is the next scenario? Chart below.

1) Market bottom like Ivanoff suggests and bear crushing rally!

2) What if market declines further for 1-2 days and then rally for few days and further decline?

3) Who knows what happens? And why exactly are we trying to guess!

This post is about perspective, so let's just do that. Chart below. 

More puts have been bought in several instances before. And does more puts bought = harder the market crash? I don't think there is a linear relationship between extent of market decline vs puts. It is not wise to guess based on "VIX hasn't risen more ever" or "puts are high" this time. 

So, what do we do? That is for tomorrow. Thanks...........

Market update

Previous update here

We had to post the previous update to guide ST longs on when to close the position and what levels are important. The /ES futures market was down 15 handles, hence defining levels was important. As posted yesterday, market closed below /ES 2060 and /ES 2035 as well. 

ST - changed from buy to sell

IT - had been a sell signal since July 26

LT - changed to sell from buy

Our options machine is in the "sell" zone, so exercise caution. Chart below. Could this sell move be a headfake? Well, may be, but let the market tell us that point. We are confident to read the charts when that happens.

I am a contrarian but I do follow the charts to identify the trend. I do not play counter trend moves though. Being a contrarian and a counter trend trader are quite different. 

We will post an update when the ST trend changes.

GLTA!

Market update

Previous market update here

Before the market update, based on the question from a reader, we have a post for crude oil. Chart below. 

If you already are short, right now it is hold. Close the short position on a close above /CL = $43.

If you have no position, then open a long position when the /CL bounces in the rectangle. 

What instrument do you use to trade crude oil? ETFs are the way to go. Unfortunately, there is no "best" ETF as a direct play to crude oil. See chart below, while crude oil is down 54% YoY, other ETFs are down much more. USO is an ETF, OIL is an ETN; UCO and UWTI are leveraged plays for /CL. The best of the worst is USO though. 

Now, let us discuss the market update. We flipped the sell to a buy on ST and the market went down 0.8% on the reading. Yesterday was a FOMC day. Nothing significant comes out of FOMC on most days, except once in a while. Yet the market swings a lot. That is never our problem, anyways. We have our own instruments, our own indicators to tackle all that noise. 

No change in market update, we have a 2% stop on the ST.

GLTA!

Market update

Previous market update here

First up, we have a buy recommendation for you. Buy Dominion resources with a 5% stop, chart below

Market update

Previous market update here

No change in the market update as of now. We had a ST sell from 26th July @ SPX 2079.xx

I will post a change in signal as soon as we see it. But, let me post a warning to the bears. This is good for the shorts to close the position. 

The circled turn marks the bottom of the market whereas the arrow confirms the turn. This indicator serves as a warning prior to the turn. But, the signal change is not there yet! 

GLTA!

Market update

Previous market update here

No change in the current market update from the previous one, but we do have a warning (chart below). To be honest, there are several warnings in all time frames, some of the warnings being extreme. But, this market wouldn't budge down. It continues to amaze us.

We don't hold any ST positions as the market did not close below SPX 2095. One of the good things for me personally was that I did not trade much from Dec. 2014 - June 2015 for ~ 6 months, luckily. The last 1 month has been super whipsawy, hence I can understand how it must have felt to have traded during that period. I did not trade, but our staff have traded and I easily understand them. 

Usually we do not do much political/ fundamental commentary 'coz: 

1) Trading is not about talking, it is an art in itself which is based 70% on a) putting the right risk size on the table and b) being flexible to close positions

2) If we start to talk, then we will have to dish out some criticism on someone out there - which is not our wont. 

Out there, I am reading reviews suggesting that the "fear seen among investors now is same as the fear at the 2009 market lows" Oh, really? 

How do you measure fear in the markets? Objectively or subjectively? 

If you poll 100 people on fear about markets, that is subjective. If you look at the data from the market exchanges and derive fear that is objective. 

If investors are fearful of the markets, they should either buy puts or get out of the market, right? We simply don't see any extreme levels of "fear" among investors. If you say there is extreme fear among market participants only 2% off the all time highs, you must be kidding!

Anyway, we do not subscribe to the notion that we are seeing extreme fear currently. Atleast, it is not simply seen in the data. In fact, it is opposite of what is being reported in the interweb.

Chart below

This is only a warning that top is probably in (or close) for this ST frame. This is not a signal, however. Especially in this market where every indicator and signal has been mercilessly trashed. 

It still pays to watch for the warnings, as it allows us to be prepared of the risk that is in the markets out there. Nothing more, nothing less.....

GLTA!

Market update

Previous market update here

VST - Buy

ST - Sell

IT - Sell

LT - Buy

ST is on the border of sell & buy. No change yet! Our ST positions were stopped at 2% up from where we opened the position...phew! Should the market drop below SPX 2095, we will open the short sell market ST position again. Should the market continue upward, we will take the signal.

The problem is FOMC day. Things are not straight both before & after FOMC day. Never mind as we can wait.....

market update

Previous market update here

We got a warning sign yesterday from our options tool, hardly 2 days into this "buy" signal. But, no sign of VST/ ST signal change yet. So, we remain put. Especially considering it is a FOMC day. We reiterate again that we don't trade around FOMC. We do have 2% and 5%  stops for ST and IT frames.

I am all ears on what the Fed chief will say about our economy. It is just that we don't trade what they say.....GLTA! 

Market update

Previous market update here

ST - changed to sell from buy as of close on 07/24

IT - changed to sell from buy as of close on 07/24

LT - buy

ST position: In our previous market update, we posted that we are taking 50% of our position off at 2.5% profit and 25% stopped at 2100. There are times when scaling off seems dumb, for example when the swing trade results in 10% or so. But, that's the reason why we have some left on the table. If the market conntinues in the same direction of our trade, so be it, we will have our chips there. Also, we were not scaling off for no reason. We had this warning sign (chart below) on 07/21. 

IT: IT changed to sell from buy. Previous signal was on 07/17 at SPX 2126. Which is a ~ 2.2% loss of our position. IT loss eats away our ST profits. Ah, humbug!

Anyway, good luck to all! 

Market update

Previous market update here

My ST signals have been on a sell since 3 weeks. No change yet and we didn't get a buy signal yet. Since something "greek" is going on, let us look at one simple chart. The support for the $SPX lies in the ~ 2065 - 2070 area. A flush below this strong level, there is thin support at the ~ 2040 level. Below that, at the ~ 1980 level. The US market futures are down about 1.5% at this time but remember that it is only the daily close on the actual indices that matter.

We were on a "sell" signal since 3 weeks based on our indicators (one of them below in the chart). You might be wondering what we did in the last 3 weeks. We don't trade only the buy and sell signals. In addition to the flipping of positions during these signals, we take advantage of the dips and rips by scaling in and out. In other words, if the market moves in the direction of our trade, we do take some chips off the table. That ensures that we book our profits. Please read our trading methodology. The market has indeed come to the ~ 2070 level twice in the last 3 weeks. Some of the positions were partially closed when that happened. This is the 3rd time we are about that level. 

What happens tomorrow? I have no idea. Be careful out there. Use stops, and do not over trade on days like this.  I am not necessarily saying we will crash tomorrow but some caution should be exerted. There is always another tomorrow!

GLTA!

Market update

Previous market update here

 

VST/ ST - New buy signal

 IT/ LT/ VLT - Buy

 

Previous sell signal was a fail = This ST/ VST updates could be chop and top/ drop. Trading portfolio is getting chopped. But, IT remained a buy signal through out, so we are better in that account.

 

Except internals (Breadth and other liquidity indicators), everything in the externals are firm including price structure. Breadth has been bad for the last 2 months, indicating topping. In 2007-2008, it took 3 months for the price to realize bad breadth. But, in 1998 - 2000, it took 2 years for the market to eventually top. Bad breadth continued to push the market higher from 1998 to 2000. So, there is no telling if the market will top tomorrow or in 2 years. Our barometer has not given a signal either, so wait for IT change in stucture, not yet at least!

 

Internals are obviously bad, so be prudent; Be flexible; Signals may fail, signals may be profitable but be advised to be change your mind at the hint of change in direction.

 

 

 

 



Market update

VST/ST - Sell

IT - Turned to Sell at close yesterday

LT/ VLT - Buy

Previous update here



Market update

Good morning Trader, How is you? 

I have taken a good break for a couple of months. I did miss a couple of market swings, but I was working on other important opportunities for myself. So, I didn't miss anything for not trading for the past 2 months. I got back couple of weeks back, I took time to settle into a rhythm, I traded on paper for 2 weeks. I am ready for new trades.

The market hasn't gone anywhere in the last 1 1/2 months. In the market, there are going to be phases like this. Hence, even if you are a market trader (trading /ES or SPY or QQQ...), you will benefit if you trade some other stocks with high volume, big market caps, no/ low news tickers. Every single ticker doesn't always rhyme with the market. 

Market update

VST/ ST/ IT/ LT - on Sell obviously (no positions)

VLT - ticked to Sell right now but too early as we are only in the 1st week of the month, things can change by the end of this month

For definitions of my time frame terms - click here 

We are on sell mode in all time frames, things look gloomy, huh? If you are already on the short side, hold on! I do not suggest new positions in the middle. I am looking for a turn, however. Few of my barometers have been suggesting a turn (one below in the chart) but price is king and indicators are queen. Barometers like the below only suggest me that a possibility of a turn is possible, but no guarantees till the price turns. 

I have posted this chart few times in the past to pick tops and bottoms. At this point of this barometer, it can be said we are forming a bottom. It doesn't mean you exit your current positions. It means that you should be on alert for the possibility of an exit/ scale out of your current (short market) positions.  

Gold update

VST - Buy

ST - Turned to buy at 9 am EST

IT - Sell

LT - Buy

VLT - Buy

Market update

Previous market update here

VST/ ST - Bearish

IT - Turned bearish as of market close yesterday (stopped at 1880 SPX long)

LT - Still bearish

VLT - Bullish

 

I am short SPX right now with adequate chops. That's not a typo, but I meant 'stops' haha. The April - May period every year is full of chops and stops get hit relentlessly. In the my 2013 annual report, I did note the April chops effecting portfolios.

 

I am short right now but I am doubtful of this decline, let's see. I am watching the options market everyday after close. While $CPCE is in Bearish territory (>0.75 in the bottom indicator) (chart below) ,

 

 

it also means that a close below that 0.75 means we are bullish again. If you keenly observe the chart, a rise above 0.75 and close below marks the bottoming process. The process could take a while, we have no idea till confirmation. I would always have 2 positions (trading on the basis of hourly/ 4 hourly charts and swining based on dialy charts) for this reason. I select 2 different instruments if I am in a bipolar mode. And often times, it does work well for me.

 

If you keep your risk under control, regardless of chops/ stops, you still emerge a winner in the annual horizon. Good luck to you!

 

 



Update

Based on the update here .

Usually I don't post VST/ ST trade updates since it is already implied at open that we either close on "adequate" profits (VST & ST trades I mean) or get stopped out. Unfortunately, I got stopped out on ST trade that I opened today morning= small loss. 

I didn't get the next signal turn yet on ST trade, so we stand at 

ST - Bullish (stopped out), no turn signal yet

IT - Bearish

LT - Bearish

VLT - Bullish

The market hasn't closed yet for today; so if there are any changes, I will add in the comments section at EOD.

I took profits on the TSLA 190/180 vertical put spread at open today. Good luck trading!

Market update

Previous update here .

 

 

VST, ST - Bullish, hold

IT - Turned bullish as of Thursday's close (stop 3% below Thursday's close)

LT - Bearish

VLT - Bullish

 

We traded the gyrating ups and downs of the market swings very well. I, infact tweeted live all my moves. I expect the market to continue to be volatile, I expect much downside or at best choppy. But, since I will only take my signals and not let my bias affect my trading, I will disregard the "general talk". I will update any changes in the market directions. GLT All!

 

Market update

The market has turned to a ST buy at Friday close. The last sell netted ~  862 DJI points (16462 - 15794).

 

VST - Buy

ST - Buy

IT - Sell

LT - Buy

                             

AAPL update

Andy Zaky and Cody Willard who loaded on AAPL calls at 700$ and then 650$ on margin are as good as dead now from loading up to their gills. While Andy Zaky's last public post came on October 23rd, Cody Willard is now seen answering questions about the fundamental big picture on marketwatch like he is some expert on market fundamentals. Lol. Few days ago, I was having a conversation with a stocktwitser and he was saying Andy Zaky made a lot of money on AAPL in the last few years. Yes, they were rewarded from AAPL's long run for a long time by getting lucky but they frittered it away. Both levered it up many more times than they actually can, bought options on margin. Word on the street is Zaky is now unofficially bankrupt. People like them will continue to load it up on both stock and calls as the AAPL plunges and will get delivered by a big shaft named AAPL. They had no clue while it was going up, they will have no clue when it is going down. Every Tom, Zaky and Cody will be right in a bull market. It is them who survive the bear markets finally make it to the end. Zaky and Cody are not one of them.

Exactly when AAPL hit a generational low (sarcasm peeps), I posted this . AAPL rallied hard and then hard till 590$, everyone who proposed the generational low thought I was wrong.  If you read that blogpost well, I said there will be violent moves in both directions, long and short. I said fortunes will be made and lost. AAPL is a stock that cuts both longs and shorts. It has been that way forever, and it will continue to be like that. If you check market action of AAPL in the long time, between peaks and bottoms, you will find that it often cut itself into 1/2 or then double again. For example, in 2008 from 180+ to 110$ and then again to 180+ and then to bottom at 80ish. These type of moves happened even when the stock was in the teens. These will happen even now, except the volatility has risen now much more. Big gap downs and gap ups seem common. Most of the traders have no clue which way it goes. I have been making good money off of it, but I rarely hold overnight, mostly by trading intraday. I don't want to keep a loaded gun in my pocket while I am asleep, nope. Traders have no clue, then investors don't have any idea what investing is. Yes, some of them have made 1000%+ gains in the last decade but what is the use if they don't make it to the bank. They are clinging to their positions thinking that the fundamental big picture is excellent. Apple as a company will be here (I hope so!) in the next 10 years just like Microsoft but as a stock it will underperform in the long run now. Law of averages will catch up eventually. 

I am still clinging to my 'generational low' post even now. We are yet to see a bottom in the intermediate term. The gravity is too high and the stock cannot sustain here. New intermediate lows are coming. My only hope for the bulls is for the stock to bottom in the 490ish range where the monthly 20 MA sits. Of course  the bottom would not complete till the ticker hits 430ish. But, first 490$, then upside and then again start the move lower. That will kill both longs and shorts, get it? Yep, bear markets kill both bears and bulls because moves will be violent in both directions. That is why market veterans ask us to be in cash in bear markets, and they are true for a reason. That is it for now on AAPL.

Market update:

VST - Bearish

ST - Bearish

IT - Bullish

LT - Bullish

Use SPY/ DIA to play my market updates. QQQ is out of sync due to the AAPL fiasco.

Market update

The market has been waiting for some "crucial news" from the fiscal cliff talks and then tomorrow's FOMC announcement. The transportation index has been in a box for over 6 months now. Which way does the market go depends on the DJT moving up (breakout) or down (box trading again). I am watching this as we trade the markets. Currently, my targets are almost achieved on the VST and ST. I am neutral on these timeframes now. I am bearish on the Intermediate term. I am bullish on the long term of this market.