Sunday, March 22, 2015

Mar 22 - Possible consolidation this week, short IBB, long GLD

Some very bullish activity Friday including strong volume that would partly have been increased by options expiration.  Often after strong OPEX weeks, the following week does not blast off as one would think merely looking at the charts.

Per Stock Traders Almanac via the The Fat PitchThe week after March OpX has been higher just 30% of the time (data from Stock Almanac). In the last 6 years, it has been a 50/50 coin toss. If you take all the times March OPEX week has been over 1%, the average following week returns -.23%.  If one takes all weeks OPEX that returned 2%+, a resounding 8 out of 9 weeks afterwards have been negative for an average loss of -.93%. 

That said, buying volume only increasing as the week progressed so from a trend standpoint, the bulls are definitely back.

In sum, this week may bring some consolidation but still thinking there will be more upside in April.  

I also lightened up on QQQ long to half position after seeing QQQ sell off late and seeing IBB (biotechs ETF) print a large black candle north of the Bollinger, this could weigh down on QQQ if they consolidate/ correct.   Took a modest short position AH in IBB on Friday so at the moment, hedged on techs.  IWM is extremely overbought also and ended up well north of the Bollinger and will be watching very carefully whether it consolidates in bullish fashion or pulls back.  
QQQ also printed a small black candle that hasn't been much of a signal but I generally take notice after the market has been up for a few days.  It has been a much better indicator for indexes such as the Dow and S+P.
VXX also printing an interesting candle with a long wick outside of the lower Bollinger-another reason to be cautious although this signal is not posting in $VIX nor $VXO.

Continuing to hold a solid GLD position.  There could be upside to 117-120 on daily and around 120-124 on the weekly and if it finally breaks out of this year long trading zone, much higher.

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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...