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

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

Aug 16


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.

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.