Thursday, March 31, 2016

Mar 31 - Interesting bullish post from Paststat


http://paststat.com/blog/a-spy-momentum-fuelled-bullish-1dom-pattern/

with 1DOM ( 1st day of the month ) around the corner ,
below the trading strategy rules,

1) as on the last trading day of the month $SPY gained by more than 5% for the month
2) tomorrow is 1DOM

below the trading odds for $SPY longs , for the next 1/2/3/4/5 trading days ,since Y2K

24/24 times  $SPY closed  higher than the current close at some point of time in the next five trading days .. 


with an average loss of 102 basis points at the 1st positive close within in the next five trading days. five trading days. 

Mar 31 - GDX short

Re-entered GDX short as just noticed that miners are showing negative divergence (GLD up. GDX down today) and it is coming back down out of the entry range I had set up last week.  If equities look like they might take a dive, I may pull this one off bc of the recently strong correlation.


Mar 31 - Boring low volume consolidation

The adage goes something like don't short a dull market?  I was looking for a gap down or at least some pick up in volatility but not today.  Very disappointing and I am in 100 % cash again but ready to buy back puts at any time.


Wednesday, March 30, 2016

Mar 30 - Short SPY/ QQQ

Bought a combo of SPY/ QQQ very deep in the money puts expiring in May.

VIX not at 12 where I want it but this isn't a bad place either

Reversal candle north of BB


Mar 30 - Blow off top?

Hard to say now but the big volume today could be distribution not a push towards ATH's in near term.  Sitting tight until close but the reversal candles at the upper Bollinger look good to short at this point.
 QQQ is particularly promising as a potential short as it hit the upper Bollinger and reversed.  Will wait towards end of day to see whether to jump in or not


Mar 30 - ATH's?

SPY is showing solid volume in the morning so far and my TVIX short +10%  is moving nicely.  GDX has slipped a bit but still not at breakeven yet, -5%.

It remains to be seen whether this is blow off top or true buying pressure.
Volume is strong if you look in the yellow boxes vs previous days.

Miners still holding strong.  Hopefully this thing starts slipping soon.
Big move beyond the upper BB
 Right now above resistance and close to upper BB but not scratching it yet so still room to go up
 VIX is very close to a zone I would feel comfortable shorting for a multi day play

Tuesday, March 29, 2016

Mar 29 - short GDX/ TVIX and waiting for equities short entry at 12 VIX

Entered 2 positions today TVIX short which could benefit from major VIX contango and GDX short which is pretty underwater and I am a little annoyed with myself for not waiting until EOD to enter.  Closed the SPY short within minutes after open today.

This is what I'm looking for what appears to be a very good risk to reward short entry in equities. Was 5 for 5 last summer in hitting the short term tops. I'll be prepared that it won't be the cathartic crash like everyone is expecting and maybe a bit of chop like last summer.  Until then, I could see the MM's jam this up into the end of quarter.
Looking for a close at the 12 level in VIX, ideally south of the lower bollinger.
Who knows maybe we go even lower into the 11's...


Mar 29 - Yellenmania continues

Amazing.  Looks like we are moving out of this consolidation zone into the next level up.   Went short a small amount of TVIX (which is suffering from major contango and will probably fall even if equities go sideways) and took on swing short of NUGT.

Still looking for that 'top' but the market isn't giving it to us yet.







Mar 29 - Covered SPY short

Covered when SPY was -.35% and seeing that VIX hadn't moved much.  We might have another move down around the Yellen speech but taking profits for now.

As before, still waiting for more confirmation of an intermediate top and need to see more selling volume and VIX spiking.  We haven't seen it yet but seems like we are getting closer.  Also seems like I have been saying that for a while.



Monday, March 28, 2016

Mar 28 - Potential short entry SPY

On the days where we have had sub 100MM shares traded, 7 out of 10 times there has been a pullback within 2 days.  Today's volume is extremely low, maybe we will end up around 60MM which is unusual for a Monday after long weekend.

If SPY ends up positive for the day, will take a short.  If we sell off, it could just set up another short squeeze in which case I will stay flat.

Again, until we get some volume/ price confirmation, this is currently setting up to be a short term play, maybe a few days.  But it does have potential to break the trend and become something more significant.


TLT starting to perk up also with a volume spike last week.


Saturday, March 26, 2016

Mar 26 - Not in the low risk short zone yet?

Took a closer look at the volume behavior in SPY and if we were to use the previous Nov run-up as an analogue, we would like to see some evening in volume between up and down days before getting aggressively short.

The green zone represents area where the up days are marked by much stronger volume than down days.
The yellow zone represents areas where the volume is starting to increase more in favor of down days.
The orange zone for periods where down days dominate on volume.

Basically the green zone still presents possibilities for shorting but high risk of buyers moving in so one would need to be nimble and take gains very quickly. i.e. within a day or two.

The signal I would looking for would be a red volume spike on the daily chart that represents more aggressive selling coming in.  So far though on this up cycle it hasn't happened yet although it could come out of nowhere and perhaps bypass this yellow zone and go straight into selling.



Friday, March 25, 2016

Mar 25 - The bullish contrarian view

While I am looking for an intermediate term top, I am also looking for potential arguments to the contrary.  A couple of interesting articles on why the crowd, including myself, could be wrong.

http://lplresearch.com/2016/03/24/when-is-overbought-really-another-word-for-bullish-maybe-right-now/

90% OF S&P 500 COMPONENTS ABOVE THEIR 50-DAY MOVING AVERAGE IS ACTUALLY BULLISH



http://www.seeitmarket.com/sp-500-bollinger-bands-squeeze-massive-move-brewing-stocks-15482/2/

lowest percent width bollinger bands stock market instances since 1990 returns

Thursday, March 24, 2016

Mar 24 - Bullish uptrend still intact but showing more signs of weakness

Courtesy of

http://niftychartsandpatterns.blogspot.com/2016/03/es-support-levels.html

It says it all from a price standpoint but VIX is bottoming, put call ratios hitting more dangerous levels, and we are close to levels that are extremely likely to trigger more sustained selling like 206-210 SPY.


Mar 24 - Closed 3/4 shorts - looking to reload on potential bounce

Have a core position of 1/4 but unloaded the rest as very possible we bounce as short term time frames pretty oversold.  That said, we have a sell signal on the daily so we probably will go down from here or have a short bounce then back down again

 Too far below lower BB to stick around.  When the trend down is further established I would be more likely to ignore the oversold signal
 2 hr frame below lower BB.  Could trigger a bounce
 Was hoping for 200 target but the short term time frames too oversold to hold here
 VIX currently printing reversal candle but it's too early to say what will happen

Wednesday, March 23, 2016

Mar 23 - Back into shorts

Entered May 210 SPY puts as the trendline broke




Mar 23 - Waiting for more VIX / SPY divergence

The last intermediate term top VIX/ SPY negative divergence lasted about 1.5 weeks (first yellow box)  Looking for at least a week of that also here (second yellow box) before getting aggressively short.

 If we hit the next level of resistance, would be a very good risk to reward short entry

This ratio is signalling we are close to a top
 PMOBUYALL signal triggers early in strong uptrends but we are seeing signs of cracks in the small red bars
 Put call ratio also signalling excessive bullishness

Mar 23 - Closed shorts for now...top is getting near

Hitting support here and buy signal on 30 min frame.  Sooner or later we will hit an intermediate top and it will become evident when one of these consolidation patterns fails. 

Monday, March 21, 2016

Mar 21 - Grind up on very low volume

Let's see where things close but a positive close in SPY would be fairly bearish.  8 out of 10 low volume readings on positive days has led to short term weakness (in yellow boxes).  Still sitting in VXX although very close to being stopped out.


Sunday, March 20, 2016

March 20 - Short term equities weakness possible

Still sitting in VXX and looking for a small pullback tomorrow/ Tues.  There still could be more upside left in this up move so playing a very short term time frame.  Also looking a re-entry into GLD short in anticipation of minor settling.

In the potential sell zone for equities

HYG printed a mildly bearish reversal candle.  Not actionable in itself but worth watching.  Treasury yields dropped both Thrus/ Fri which is also of note


The 30 min looks very strong so just looking for some settling based on the 30 min RSI.  Post OPEX week should provide headwinds for equities
 Hourly issuing sell signal on CCI but the up move has been strong and recent CCI signals have failed or worked very short durations
 SPY cracked it descending RSI trendline.  Are long term trends changing?  I doubt it but will keep an open mind.
 1-2 day pullback should be around the corner.
 GLD looking like a decent short at the upper end of its recent choppy range.

Thursday, March 17, 2016

Mar 17 - Potential SPY short

This is a very short term (only looking for a couple handles) idea for SPY.    RSI gets overbought and SPY moves down 2-3 points.  I am only long VXX as of today's close but not looking to hold for long.  I am guessing that we have moved high enough that there is a good chance of some churn in the 200-208 range of SPY to frustrate both the bears and bulls.


Mar 17 - Long VXX

Took a mid sized portion here for a 1-3 day volatility long based on the 2 hr and VIX hitting its lower BB.

Although I am taking a short, I highly suspect that we won't get a big sell off immediately.  I am leaning towards a lot of chop possibly through April which is seasonally strong.

Wednesday, March 16, 2016

Mar 16 - GLD spikes hard

Needless to say, my stop got hit very quickly where it was set right above the high of the day.  Going to wait until EOD for both gold + equities and see where the dust settles.  VIX is getting closer to a buy zone.


Mar 16 - GLD short, flat equities

sold SPY longs at breakeven on gap close and now flat equities.  Got back into GLD short on the bounce this morning but am closely watching equities.  In case equities fall, gold could catch a fear bid and throw a wrench into what is a pretty good short setup now.

 The weekly looks about to issue sell signal but the recent uptrend has been very strong so any pullback will find buyers at some point
 Backtest of trendline and turned down

This is starting to look wobbly.  No position here and will wait EOD to do anything if at all.


Aug 25 - Re-entered (again) GLD short, long LVS, AMZN, NFLX, SHAK

I have been stopped out twice in last few weeks trying to short GLD.  I have a pretty sizeable position of Nov/ Dec GLD/ GDX puts. Also ha...