26
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


21
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.


20
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.


18
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


14
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.


29
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

 


26
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


23
Aug 16

Oil is misbehaving!

On hindsight I feel good that I did not pull the trigger on the oil sector when it went bullish 3 trading days back. I mentioned at the time that I felt nervous and fearful pulling the trigger. Although that should not happen and I should have got in either using ERX or UCO, my gut feel was good. Yesterday oil gave up almost all its gains of the last few days.

So, I have decided to stay away from trading Oil for the time being. It is just too volatile.

I am still long the VIX calls and yesterday VIX moved up a bit with the market being down. That did not do much to my calls as they are far out of the money and I am really using them as a hedge.

Let us see how the overall markets are doing:

SPY: holding it’s own and staying above the 10 day moving average and all other moving averages; so despite all odds looking bullish

EEM: has fallen 1.9% in the last 2 days and trended below the 10-day moving average; so still bullish but cannot be sure

IWM: bullish and looking good; it went up on a slightly down day yesterday

XLF: a little sketchy but staying bullish

XLK: staying bullish or neutral; nothing to do

XLU: definitely bearish; this is why I am not confident about the market even though most of the indicators look bullish; there is an undercurrent of fear in the market

XLE: topsy turvey and unreliable

XLI: staying above water

GLD: mildly bullish; not worth taking a risk

SLV: definitely gone bearish

USO: already discussed


18
Aug 16

Fear!

Yesterday I was too scared to pull the trigger. Not a good sign as that is an emotional reaction to the pundits calling for pullback. My model was very clear for me to get in long on the broader market from middle of July. Lesson learned: always follow the model.

So how does the market look like today:

SPY: still bullish and showing no signs yet of any pullback.

IWM: down 2 trading days in a row but still bullish although the price just moved below the 10-day moving average.

EEM: down 2 days in a row but price is still above all moving averages; looks to be opening down today. Still bullish though.

XLE: definitely bullish and this is where I was scared yesterday to pull the trigger; should go long ERX today – hope I can muster the courage

XLU: was bearish yesterday but had a good uptick and seems like going to open strong today; must watch for general market health; so assessment of 2 days back has not panned out and I am lucky (at least in the short-term) to not have gone short

XLI: neutral – still nothing much to say

USO: hugely bullish; need to decide whether to go long UCO or ERX today.


16
Aug 16

Market Trends: August 16, 2016 Edition

The markets in US took a breather today but SPY is still up over 6% over the last 3 months and 13% over the last 6 months. That is a good uptick. The question is whether it can hold on and keep going up.

I am long VIX September 23 calls as a hedge.

SPY: has been in a bullish trend since July 8 and still remains bullish. No action.

IWM: has been bullish since July 12 and still remains reasonably bullish. No action.

EEM: has been bullish from July 11 and seems to be getting more bullish. This is a wait and watch situation and I will pull the trigger if the trend continues. Today was a slightly down day.

XLE: The 6-month trend is bullish but lately has been a bit topsy-turvy. That said it closed today just about in a bullish trend. So, if I want to pull the trigger now would be the time. I will make the decision tomorrow morning. I could do UOP or ERX.

XLU: looks really horrible and could be the starting point of the general market trend to go bearish. This one is begging me to pull the trigger. SDP would be my ticker – ProShares UltraShort Utilities.

XLI: neutral for now – nothing much to say.

GLD: neutral for now.

SLV: neutral

USO: roller-coaster ride but just turned bullish today. That confirms the trend seen with XLE as well. So, decision time on this tomorrow. UCO would be my ticker.