Wednesday, December 30, 2015

Dec 30 - Equities drifting lower, commodities getting rocked...again

I just put on a short in SPY for a swing trade and plan on scaling in fairly large as we are close to a inflection point.  VIX is printing a buy and SPY is close to top of its range.

Not a huge amount of negative divergence but we do have a sell signal (mean reversion) on the hourly and very close to the top of the range.  It was enough for me to go short.

in 1999-2001 all the weekly tops tapped a trendline in RSI.  I am looking for a similar setup now
 The RSI trendline setup isnt as good but decent.  We are close enough to make me feel risk to reward this is a good set up.
 Potential VIX movement
 VIX buy signal on daily

Tuesday, December 29, 2015

Dec 29 - Nice pop in equities but will it last?

Very strong move today in equities but very overbought on short term frame.  Sold GDX quickly after open after GLD started dipping for a minimal gain and also SPY longs picked up at close yesterday around midday (a bit too early..).   At close picked up ERY for a short term trade, probably only a day or two based on XLE's relative weakness despite the strong day in equities and oil.  I am slightly bearish (not expecting a big move though) going into the year end and only have a small batch of GDX spreads for next Jan/ Mar.

Still consolidating for a move up but also as it has been so long there is possibility of a spike to downside.

Will GLD get moving?
 Some negative divergence but nothing super strong
 Broke out of the wedge but not trusting it and will wait for more info to take a position
 USO had a nice bounce but it isn't having those violent big candles so I didn't hop back on.
 VIX printing reversal candle which could foretell some weakness for tomorrow.

Monday, December 28, 2015

Dec 28 - Light sell off for equities, precious metals whacked once again

Equities had a low volume melt up after a gap down and poised to bounce tomorrow based on the reversal candle printed in VIX and SPY.  Gold flopping around and I added GDX for a quick bounce based on the hourly.  USO not surprisingly flopped after its promising action last week.  I quickly unloaded in pre my USO position and am standing aside until a better setup.

Buy signal on hourly

GLD basing looks promising but unclear when it will move
 PMOBUYALL still in bullish mode, so probably not the greatest time to go short even though longs seem tenuous
 Sell signal burned off quickly which is bullish
 Reversal candle on low volume bodes well for longs
 Crash!  USO can't hold up.
 Buy signal failed
 VIX hourly printing sell
 But VIX daily candle printing sell but potential buy on stochs.  Given the seasonality not expecting a full blown confirmation until next yr

Wednesday, December 23, 2015

Dec 23 - Seasonality tailwinds strong for equities, buy signal USO

Very strong movement in equities and my 20/20.5 VXX put spreads triggered sale as did my SPY call spreads.  I picked up some USO as it triggered a buy on the hourly and daily but will be weary if this is yet another short term spike.  The positive divergence makes for a very good set up so if it does hold today, we could see a decent spike in the next few days.

Although price action is saying more upside, we are very overbought on the hourly and might see a pullback.  I am not betting on it though in either direction.

If we top out at upper end of the range, would make a good short set up
 Great long set up in USO.  Whether we can build upon gains is a question.
 Buy signal and decent volume.
 Will probably go short equities when VIX gets oversold by end of year, early Jan

Tuesday, December 22, 2015

Dec 22 - Will Santa stay until Christmas?

So far, looks like the week will be a fairly positive one for equities.

QQQ moving up from its bull flag.  Target in yellow.

GLD still meandering.  Seems to be basing but sure is taking a long time.  I trimmed back some of my Jan GDX spreads at a loss.

SPY moving up nicely and confirming the buy signal from yesterday.

Dec 22 - Wobbly move up equities

Not much to note today.  Equities clawing up but I am leaning towards recovering towards a close around the gap.  GLD holding up fairly well even though it had printed a sell on the hourly.

HYG maybe be putting in a bottom.  The equities market needs this to happen for a sustained move up.

Looking to close longs around 50% retrace
 GLD still hanging in there.  Whether it ever blasts off is another question.
 USO may be setting up for a move.  The positive divergence is encouraging.

Monday, December 21, 2015

Dec 21 - Buy signal SPY

We have a set up like back in the Greek debt crisis which should trigger after today and be good until end of week.  I am not expecting much in either direction maybe +.5% in SPY.  As stated before, I am seeing signs the market is very wobbly and unless January starts off with a bang, 2016 could be an ugly year.

Making an ugly double bottom here.  See if it holds.  If so, we should see at least a 50% retrace
 Same setup as July.  The bounce might not last long though.
HYG showing weaker selling volume today which is a plus but that is largely due to seasonality.  The negative divergence between equities and bonds is not good.

Sunday, December 20, 2015

Dec 19 - Bounce probable in equities this week but longer term picture looks weak

Lots of near term oversold readings and likely to see at minimum a slowdown of the recent selling but it will be important to see bulls take over or the market for the long term will be setting up for a major decline.  Still holding the long GLD/ GDX positions from 2 weeks ago and small VXX puts from Friday close (that I will close out at latest end of week).  Waiting to see if this bounce appears and whether we can short into it.  The big play will be going short in  January/ Feb for a major decline.

SPY on the hourly is showing a buy signal but for how long is the question.

SPY still in the consolidation zone but doesn't look good that we have had so many failed attempts.

 QQQ could be construed as having a bull flag but the fact that the other indexes look so tired gives me less excitement here.
 IWM looks horrid.  It bounced much less than I expected after the excellent buy set up from September.

Major buying of SPY/ AAPL on weakness according to WSJ.  This isn't a great indicator but is good for checking if moves are starting to become overdone.  If it happens a few times, it is usually a good idea to build skepticism about current trending positions.

HYG has always bounced when closing south of its lower BB.  This week it printed a doji and a 2nd close south of the BB.  It could bounce strongly in the next 1-2 weeks.  This negative divergence is very extreme and looks like a problem in addition to the terrible breadth.

Saturday, December 19, 2015

Dec 19 - Market is screwed

I think the market is most likely fucked.  It will probably arrive at one of these bounces that suddenly give out to the air below.  I hope we get a bounce to short into because it will be a big move.

Unless the bulls stage a monster move in Dec/ Jan to all time highs, I think it is possible we have seen a major top and I will be flipping my bias short for pending market weakness.  There is a lot of stuff that is problematic including the performance of high yield bonds, high historic price to earnings ratios, etc. but the two things that stick out the most to me are the increasing volatility and the negative divergence in small caps.

I hopefully can get to volatility later this weekend but for now I will focus on the small caps and all world indexes.

1998-2001, in orange there is negative divergence before the double top in SPY and the market quickly entered a downward trend

2005-2007, in orange there is negative divergence btw small caps and SPY and again the market quickly entered a downward trend
 2013-2016, once again there is negative divergence btw small caps and SPY.  We had a false signal in fall of last year and it was quickly erased by SPY marching to new highs which recovered the previous damage in a wicked V-shaped bottom.  We aren't seeing that now.  The market is struggling and the most optimistic analog is what happened in 2011 where we consolidated right under highs then blasted off.  Given that volatility has been low for years to see it finally ramp up like this is not a positive.  It will take a huge move to undo the technical damage.

Negative divergence in the all-world index which looks eerily similar to the previous H+S top.

$SPX is beginning to trigger various sell signals on the monthly such as CCI, stochs, RSI, MACD.  Once the CCI/ stochs cross into >20 territory it will confirm a long term downward trend.  Still possibility for a recovery but it needs to happen soon.

Friday, December 18, 2015

Dec 18 - Equities bounce possible next week, GLD/ GDX maybe finally basing

I'm not super confident of this, but we could see a bounce next week with the oversold conditions and am adding modest amount of VXX shorts.

At the bottom of the range and the market will need to catch a bid by this afternoon or Monday or things might collapse.

Buy signal on hourly but no positive divergence so beware.

GLD might finally be settling but I have said that over the past few weeks.

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...