Wednesday, March 31, 2010

Another sell signal...

Besides the "tidal technique" and my "trending technique", Jim introduced to me a third indicator that works pretty damn well.

It's the NYSE McClellan Oscillator and Summation Index. When the McClellan Oscillator moves above zero, it's a buy signal, and when it drops below zero, it's time to get into the G fund. The Summation Index is basically a derivative of the oscillator. When the oscillator is above zero, the summation curve is black. When it's negative, the summation curve is red. See below.

NYSE McClellan Oscillator (I drew in some green and red lines indication "buy" and "sell" dates. Obviously, you won't see these on the raw chart in the link below.)

Matching NYSE Summation Index (Buy black, sell red)

You can see we have dropped below zero and the summation index is red. A pullback is coming. Go long only when the oscillator convincingly moves above zero.

The NYSE MO can be found here:

And NYSE Summation Index here:$NYSI,uu[m,a]daclynay[dd][p][i]&pref=G

Saturday, March 20, 2010

Waiting for a buy signal...

Ok, now that the market is expected to correct at least a little, we need to focus on the 34 ema line. If we bounce off the 34 ema, a buy will be triggered. If (or when) that day comes, the S fund is statistically the better play to maximize profits. If the market crashes down through the 34ema, like it did back in Jan, there would be no buy signal at that time.

The 34 ema current is in the 1128-1130 ballpark, but rising about 2 pts each day. By the end of the week, it should be in the 1135-1140 range. So, that's where we need this correction to go.

Here's a graphic...

In the meantime, while we wait, here are 2 stocks I'm watching this week. Both are in uptrends, and buy signals would be generated as described in the graphics.



Thursday, March 18, 2010

New TTS Signal: Sell

Well, my technical trend system (TTS) triggered a "sell" signal yesterday. The only problem - and it's a pretty big problem - is that the system never triggered a buy signal. grrrr

At any rate, the downside risk is now higher than the upside potential. So, if by chance you have any money outside the G fund, now may be a good time to get it back to safety.

The last time we hit the upper BB to trigger a sell, the market peaked 3 days later, and tanked hard 10 days later.

The spread between the 13 ma and the 34 ema is getting overextended as well indicating a pullpack is likely. Although that should be obvious as SPY has had 14 green candles in a row!!!!

Monday, March 15, 2010

System buy signal for TZA

Montz, this is for you...

My system has a handful of rules. In this case (TZA), rule B was satisfied. In a nutshell, rule B states that when in a downtrend, you buy following 2 consecutive green candles after a bounce off the lower bollinger band (42,2).

Good luck!

Thursday, March 4, 2010

Time to short financials?

Sorry this post is off topic from our TSP's, but this is too good to ignore. Here is $BKX (Philly Bank Index).

This chart is very bearish. The rising wedge dating back to early 2009 was broken to the downside recently. Since then, the index has been trying to get back into the wedge, but has been unsuccessful. This action almost always leads to a significant correction. In a nutshell, it's time to buy some FAS puts, short FAS, or buy FAZ. Take your pick, they should all be profitable.

Wednesday, March 3, 2010

US Dollar Chart

My trend system is fairly effective not only for the S&P, but practically any other daily stock chart. Here's the chart for the US Dollar (ticker UUP). It shows perfectly how the system trips a buy signal.

The USD uptrend (13 went higher than 34) began back in december. However, at the time of the crossover, the price of UUP was too expensive, so the system waits for a pullback to the 34 ema before buying. The ema must hold as support, otherwise, the "buy" never materializes. In this case, the buy occurred Jan 15th...which wouldn't have been a bad day to go into the G-fund.

In an uptrend, the sell occurs when the stock hits the upper bollinger band. In this case, the USD first hit it on Feb 4th. So, the sell was triggered. Using that date to enter the C fund would've been a wise move, as the S&P was 1063 at the close.

So, if the inverse relationship between the USD and stocks continues, one could use the USD chart in this fashion to make IFT decisions.

The interesting thing is that both the S&P and USD are now in uptrends. It will be interesting to see what happens over the next few days/weeks.

System status: 100% G-fund

Tuesday, March 2, 2010

The upward trend cross is upon us...

It looks like today is going to be the upward cross of the 13ma and 34ema. Since the S&P is currently 17 points above both moving averages, it may be wise to wait for a pull back for a better entry point. The actual system won't trigger a buy until the s&p touches the 34ema and successfully holds above that support for a day.

However, on many occasions, the s&p won't touch the 34ema again for quite some time as it continues to go up, up, and away. If transfers weren't limited to 2 per month, I would buy 50% on the upward cross, and then the other 50% if the 34ema holds as support. If one likes a lot of risk, the upward cross could be a good entry point for 100% S fund.

If one were to enter stocks today, the current sell target looks to be between 1150 to 1160 (the upper bollinger band).