Oct 16

Market commentary for October 18, 2016

The market looks somewhat mixed. The main signals seem to be towards the bearish side with SPY and IWM trending low. There is some good news from the quarterly results from the banks and financials though which is likely stemming the tide a little.

But overall the market seems to have more chance of going down than up. So, I may take up a stance along those lines in the next day or so.

SPY: Bearish since last Thursday October 13; I should have got in with a bearish trade that same day. I will likely buy SPXS today

EEM: Just about touching the bearish line; should watch for the next few days

IWM: Really in bearish territory; I should go long on TZA

XLE: Very choppy; cannot make a judgment

XLU: Has been severely bearish; now trying to come up a little but still in bearish territory

XLI: Almost in bearish territory

XLF: Strangely trending against the wind a little; looks like in somewhat of a bullish trend probably due to the good results from the banks and financials recently

XLK: Neutral but looks like breaking soon

Oct 16

Trade Update on SPXS, ERY, EDZ and FAZ

I sold all my positions on SPXS, ERY, EDZ and FAZ for a net loss of 3%. Lesson learned is get in when the model tells me to get in and don’t wait. In this instance I wavered and waited. Not that I would not have lost some money. I still would have. But I would have disciplined towards my principles.

Oct 16

Market Trends and Trade Status on SPXS, ERY, EDZ, FAZ

Overall the market looks like in neutral territory. However, I have a bearish bet at this time and it does not look like the chances of the downward trend that I am hoping for may pan out. The chance only seems to be 50% at this time – not something I like to bet on. So, the prudent thing for me would be to get out of the market and wait for a definite trend to develop.

SPY: looks neutral but also looks like will break in some direction quickly; there is danger that it will break in the opposite direction that I am positioned – I am positioned in a bearish stance; perhaps I will reduce my exposure or get out completely to see which direction the market breaks and then take action

EEM: very much same as the SPY

XLF: clearly very volatile; best for me to get out

XLE: has turned bullish; I need to get out from my bearish bet

Sep 16

Two more trades: ERY and FAZ

Last Thursday I sort of doubled down and went long the FAZ based on trend seen in XLF and ERY based on trend seen in XLE. Both, per my earlier commentary were broken. So, here is how my trades look now:

EDZ bought at 23.77

SPXS bought at 12.66

FAZ bought at 31.68

ERY bought at 13.81

The markets seem mostly on neutral territory at this point in time. But it just seems to me that it is waiting for an excuse to go down.

SPY: kind of neutral at this time

EEM: almost went close to positive territory but I consider neutral as of now, today is important

XLF: in a bearish trend

XLE: in a bearish trend

Sep 16

Tracking the Market and the Trades on SPXS and EDZ

Yesterday I went long the SPXS based on trends seen in the SPY and EDZ based on trends seen in the EEM. I will be tracking these to see how this move pays out. There have been a couple of days of sideways moves from the markets. So, let’s look at some of my favorite tickers as to how they are trending:

SPY: still broken and cannot seem to make up its mind; this is not surprising because the biggest influencer of the market – the Fed – cannot seem to make up tjheir mind either; so the broader market is just reflecting the dilemma of the Fed

EEM: looks little less bearish than the SPY but bearish none-the-less

XLU: bearish

XLF: looks worse than the SPY

XLK: better than others but caught in the downward trend of the broader market; may be the last one to fall

XLE: looks really sorry, completely broken

Today is a big day with both the Fed and the BOJ coming out with policy statements. The BOJ policy starement is already out as I write this and it was not the shock and awe that the markets were fearing. So, futures are higher as of now which is about 15 minutes before market open. But more important now will be what the Fed says later in the day and how the markets react. It is important to distinguish from the immediate market reaction to the slightly mid-term market reaction. By mid-term I really mean a week to a few weeks.

Sep 16

Trades in SPXS and EDZ

Yesterday I pulled the trigger deciding that the chances of the market going down are higher than going up. This was based on trends seen in the pricing on most of the tickers in my watchlist over the last week. I bought the following:

SPXS at 12.66 based on trends seen in the SPY

EDZ at 23.77 based on trends seen in the EEM

Both the US market represented by the S&P500 and the emerging markets represented by the EEM is showing bearish trends.

I will be watching the markets and more closely the trades in the coming days to make sure I am ready to take the next action at the right time.

Sep 16

Markets are Broken

The markets certainly look like they are broken – Fear is in. Next week may the right time to male the plays to the downside. Let’s see how our favorite tckers are doing:

SPY: very bearish; every high it is reaching is lower than the earlier high which tells me the market wants to take it higher but not with a lot of heart

IWM: bearish – not as bad as the SPY but still bearish

EEM: bearish

XLE: very bearish

XLF: completely broken

XLK: strangely neutral; I suspect it is becuae of the good showing from AAPL

XLU: bearish

XLI: completely broken

GLD: neutral to bearish

SLV: bearish

USO: bearish

Sep 16

Fear is In and the Hedge worked

My hedge on the market yesterday as I took profits on my VIX calls. In the last 3 trading days the VIX has climbed about 42% which has mant my calls doubled. Nice work AT! But was that designed to happen and can you repeat that wity 100% confidence. The answer obviously is No. I got lucky with the timing. The calls were slated to expire next week and they were far out of the money calls – as I had mentioned it was not a trade but a hedge. I was prepared to lose that money.

OK, so how does the market look like. Well Fear is defnitely in. Let’s look at the big indicators:

SPY: it’s broken, maybe wait for the bounce today and then take action, definitely looks bearish at this point, the only danger is that it has broken in 3 trading days and maybe we need to still wait and watch to see if this is going to be a bigger swoon

IWM: same as SPY – broken

EEM: just went truly bearish yesterday, so broken as well

XLE: close to broken but not yet really

XLK: yes, broken

XLF: broken

XLU: broken

XLI: broken

USO: not yet broken, wobbly and needs to be watched

GLD: neutral

SLV: neutral

So, really almost everything looks bearish or broken (as you can tell it is my favorite word for today) but it has been very quickly broken. Most of these indicators were trending sideways for a while. So, the 2 days of downturn has made them look really bearish. I think I am not going to take any action today but have a wait and watch approach.

Aug 16

Market has a Cautionary story

The VIX has turned bullish by trending up the last several days which gives worry to the market that there is going to be a pullback. In general this is a time for caution and the only thing I have open are those VIX calls for now.

SPY: the bullishness is fading slightly, price went below both the 10 and 20 day moving averages, has been down 3 days in a row although looks to be opening higher today

IWM: I would call it neutral now seeing the SPY trend

EEM: in a similar way starting to get bearish, likely to fall faster than the US markets perhaps

XLU: looking terrible, maybe shape of things to come in the overall market, I use this mostly to gauge the market – don’t really trade it

XLI: neutral and trending bearish slightly

XLF: looks nicely bullish bucking the trend of the rest of the market

XLK: bullishness petering out, turning neutral for the most part

GLD: turning bearish, has been down for the last 6 days in a row

SLV: also bearish

USO: caution here, the moves have been too big and not sure if this is a wave that is finally going down and making a lower low than it made in early August

XLE: very choppy as I would expect


Aug 16

Same old wait and watch phase for the markets

The market is in a wait and watch mode as far as I am concerned. I am still long the VIX calls but not sure if it will really spike soon. It just trended up a little this week.

SPY: neutral territory for now; has been mostly going sideways the whole month

IWM: has been trending bullish slow and steady

EEM: neutral territory for now

XLF: nicely bullish – so why is SPY not as bullish

XLK: somewhat bullish

VIX: the volatility started trending up but remains to be seen if it spikes