Sunday, December 21, 2014

Dec 21 - Big bounce in indexes, potential oil rally

As expected per this Monday post and Tuesday post, the indexes rallied strong and are heading into seasonally favorable period.  This could be exaggerated further by fund managers adding onto their already strong returns for the year.  QQQ looks ready to break previous highs and challenge its upper trendline by January.

USO printed some huge volume which is probably a short term bottom or in the stages of creating one.  With $WTIC at around $55, that is fairly close to an inflation adjusted price of $48 at the 2009 bottom which was around $40.  If oil falls to $45-50, I would be looking at making some long term bets.

GLD looking fairly wobbly and hasn't bounced like I had expected.  It is managing to move up but in a very wobbly manner and with the gold miners showing major negative divergence, it could be telling us something.

HYG although bouncing strongly, continues to display strong negative divergence to SPY.  Something to think about if we enter a deeper correction down the line.

Wednesday, December 17, 2014

Dec 17 - Long SPY/ QQQ

Rather than waiting a day for consolidation , the market blasted off all across the board.  Big moves in VIX, HYG, and the indexes producing buy signals across the board.  HYG in particular had an unusually strong day within the past year.  We are running into extremely bullish seasonality with 2 shortened trading weeks so will be extremely surprised to see major selling before year end.

Tuesday, December 16, 2014

Dec 16 - Near long entry

Volume declined a slight notch in VXX which often marks beginning of reversal.  VIX eliminated its black reversal candle so very possible we gap down tomorrow and seek a reversal.  I am thinking we are 0-2 days away from an intermediate term bottom.

Dec 16 - Potential intermediate bottom

VIX may have topped out printed a reversal candle and HYG looks like it is set up for bounce going forward.  Considering the holiday low volume ahead for 2 weeks, this is risk to reward very good long set up.  It might need tomorrow also to settle though.

Monday, December 15, 2014

Dec 15 - Almost a long entry but not quite

Maybe within 1-2 days and as early as open tomorrow if there is a big gap down.  HYG long set up hasn't triggered, VIX very close to previous highs.  Will go long SPY with expectation of retest of highs in Jan.  The yellow indicates the indices lag.

Sunday, December 14, 2014

Dec 14 - Bounce coming this week?

This last week was definitely a very whippy week on both sides.  SPY after an initial bounce confirmed the HYG sell signal I had posted about 2 weeks ago (also indicated in yellow boxes in SPY chart).  I managed to catch some of the downside this week after being initially stopped out and am looking for some bounce Monday and either more downside or churn.  We are very far outside the Bollinger and would be surprising not to see some bounce even if it intraday.  However, based on the volume still peaked out, I expect more downside going forward.  I would also like to see HYG recover which has been leading out of the last 2 downturns before going long.  On a longer term scale, the negative divergence between the indexes and HYG is increasing a LOT.  This is definitely something watch for as we might be setting up for a bigger correction down the line.

GLD continues to hold steady but gold miners are taking a beating.  Perhaps a lot of bearishness or end of the year tax-selling?  Regardless still bullish going into next year but switching to short term trades in NUGT until the negative divergence, which is quite extreme right now.

Tuesday, December 9, 2014

Dec 9 - Index weakness, GLD blasts off

Overall market is down except oil and precious metals, which are seeing a vigorous bounce today. The gold miners which have been beaten down, even relative to gold, may have a chance of getting moving.  Currently repositioned from 15.5 to high 13's in NUGT.  If it can break its descending trendline and reverse its recent negative divergence to gold, it could be off to the races.

SPY although down, as of now, while breadth is solid selling, may bounce up tomorrow depending on how we close.  FXE at a turning point where the positive divergence and extreme bearish sentiment may trigger a reversal.

Wednesday, December 3, 2014

Dec 3 - SPY recoups losses, GLD still rebounding

Stopped out a bit above cost basis on SDS when SPY pushed above its gap close.  Probably should've taken 50% profits on the previous close as the down moves haven't generally appeared on the first try.  It is possible we will see repeated drops then immediate buying into year end and need to wait until January for the market to ease/ consolidate.

HYG: SPY short setup looks for another setup and until it does, I will continue to trade the indexes lightly.

GLD looks to move up and if we finish around where we are, will be poised for more upside in the intermediate term.  Re-entered NUGT slightly below where I was previously stopped out and as always expecting a lot of rollercoaster action.

Monday, December 1, 2014

Dec 1- Monday recap, sell signal confirmed

Very wild day in precious metals overnight into today.  Reentered NUGT premarket after being stopped out Friday morn.   It looks increasingly possible that we have an intermediate low in GLD.  For sure both bulls and bears are having a hard time if trading on short time periods with these violent moves.

The indexes as expected dipped and looking to hold SDS at least through this week although expecting the market to recover by mid to late Dec.

The dollar also dipped once again threatening to pullback as the long side of boat could be overly crowded.

Dec 1 - SPY HYG sell signal triggered Fri

HYG posted sell signal Friday.  Now sitting in big position of SDS and expecting some selling for this week.  GLD hammered Fri with the oil selloff and will see if NUGT is worth reentering.  Gold miners bounced hard off resistance so for now trend is back down again although there are still indicators that a long position is not out of the question.  If GLD breaks previous lows we could be looking at that big drop more than a few people are looking for.

Tuesday, November 25, 2014

Nov 25 - NUGT/ GDX poised for another leg up - SPY/QQQ continue to show strength

NUGT could start the next leg up despite supposedly bad news in wake of the strong GDP report.   A next upmove could bring it to 18-19 range. GLD has been consolidating for a while which is giving confidence to the mining sector.  UUP interestingly down for the second day in the row, although trend is up , could be the short term pullback as it could be a false breakout.

SPY and major indexes shrugged off the potential sell signal and for now looks like consolidation. My SDS position not moving and not unexpectedly slightly underwater.  As the week progresses, the thin volume will not do the position any favors.

At close, exited the SDS position because of the thin volume and historically bullish 1 1/2 days ahead and flipped long to SSO with an eye for rest of week.

Sunday, November 23, 2014

Nov 24 - Chance of consolidation/ reversal coming in SPY

Friday although gapping up big, printed a black reversal candle with higher volume near the upper Bollinger. This has been a pretty good signal to go short for 1-3 days but heading into the shortened week this may be a less reliable signal.  So there exists this is a short term 'blow-off' top that would lead to some long-awaited correction or consolidation.  Went short via SDS at close on Friday with a modest position because the risk of a big move up on Monday would be probably limited.

The HYG/ SPY short setup discussed earlier in the week is still not there yet.

Gold miners continue to consolidate in a bullish manner and possible the next leg up happens within a few days.  On the other hand, GLD could be in a rising wedge though.  It has been pretty good about dropping upon hitting the upper trendline so will be watching to see if this turns into just a channel in next week or two.

Thursday, November 20, 2014

Nov 20 - Equities rebound strongly, GLD recovers

Major indexes showed strength recovering from a gap down.  In strong bullish trends these outsized gaps often present very good risk to reward for gap fills.

The short set up looks like its a week away if and when the negative divergence in HYG / SPY appears.  Problem with this is that it runs into December which has very strong seasonality behind it.   Until then the longs continue to have the upper hand and continuing to squash weakness by rapid (or rabid) buying.

GLD bounced well today and seems to be primed for more upside.  On the good side, UUP appears to set up to slip down some with a CCI and black reversal candle and FXE looks to rebound with a decent amount of positive divergence.  On the down side, GLD still stuck underneath serious resistance and will need to clear it to continue moving up, otherwise GLD could bounce right down and continue its long term slide.

Wednesday, November 19, 2014

Nov 19 - Equities weakness

A very unexpected slide in equities and metals triggered my stop in NUGT at 15.25.  I wasn't expecting any big moves until after the release of FOMC notes so this is surprising.  The speed of the move down and its fairly strong volume made me lean towards waiting to see how the day plays out before considering jumping back in.

HYG continues to slide also and I will continue to monitor to see if the negative divergence increases.

Update:  Back in NUGT at 15.50 and watchful of FOMC minutes coming up soon

Monday, November 17, 2014

Nov 17 - Short set up SPY

IWM: SPY set up that triggers on bearish MA cross and negative divergence between IWM and SPY.  Looks like it could trigger later this week or next week.  This is similar to the HYG: SPY set up posted earlier.

Nov 17 - NUGT blasting off, potential for 50%+ move

In at 12.33 and looking for a lot of upside here as precious metals seem to be stabilizing.  1st target around 18

Nov 17 - More consolidation and HYG may bounce

Early weakness and defensive sectors leading along with DIA/ SPY while the risk indexes QQQ IWM lag.  HYG may bounce here and will be interesting to see if HYG makes a lower high and SPY makes a higher high to set up negative divergence.

Sunday, November 16, 2014

Nov 16 - Market correction upcoming?

HYG tends to lead intermediate up and down moves recently.  It has been showing considerable weakness last few days with stronger volume.  As SPY/ HYG divergence intensifies, i.e. lower high in HYG and higher high in SPY, very possible the market pulls back some.

SPY 1 yr frame looks like we are exhausting here and I am leaning towards some sort of consolidation for a few weeks before going higher.

Friday, November 14, 2014

Nov 14 - GLD long

Very strong spike with good volume in GLD.  Will be interesting to see if this is just a short squeeze or buyers materialize behind this.  The weekly looks fairly promising now having printed two hammers in a row.  The general weakness in the indexes such as SPY/ QQQ is helping funnel off some action into precious metals.

Wednesday, November 12, 2014

Nov 12 - Melt up continues, is GLD basing for a move up or consolidation for move down?

Today exhibited very bullish behavior although gains were small and SPY was slightly red.  IWM and QQQ led today making this a risk-on day.  QQQ in particular looks primed for a strong move up as it has been consolidating for a week.  SPY issued a hollow reversal candle combined with a black VIX which is pretty bullish.  The yellow areas in the SPY chart show that every day in the last 6 mo we have seen next day upside.

GLD continues to bounce within a zone and has the potential to have a decent bounce especially with Yellen speaking tomorrow.  The bad news of QE is already out but if there is hint of interest rate rises being delayed, the bears could find the need to hit the exits quickly.  Generally speaking, I am still inclined to see a bounce rather than a move down from here because it seems there are still too much bearishness in the public and within the last week, a lack of conviction pushing prices down further.  That having been said, it only takes one big down day to set things in motion for the intermediate term.

May 15 - Closed out IWM puts for +120% and picked up DAL and HD Jun calls

I'm going to let the market do its thing this week and probably stay away from new positions until Friday unless something very good pop...