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.

July 11 - GLD sucks

stopped out of GLD yesterday for -25%.  Holding off on reentry and maybe will enter if we drop another level. SPY on the other hand is crus...