Oct 17

Markets and Trends

Overall market trends are still bullish. So, generally I am going to stay long.

Let us see how our major indices are doing:

SPY: Looking nicely bullish

IWM: About neutral with bias towards bullish. It has been flat last 2 weeks or so.

EEM: Very bullish. I am long Brazil – BRZU, Russia – RUSL and China – YINN. Brazil has been turbulent so I am watchng closely. But Russia and China are doing fine.

QQQ: Very bullish

XLF: Moderately bullish

XLE: Neutral. Has been going nowhere over the last 3 weeks. I would just hold for now.

XLV: Topsy-turvy and now in just about neutral territory

XBI: Getting into neutral territory. Has been bullish so the bias is towards bullish trend. But need to watch closely. I am long LABU.

SOX: Very bullish so I will stay the course with SOXL

Oct 17

Everything is Bullish: YINN big winner today

Without a doubt everything is bullish right now. Almost all sectors are doing well. The mistake one can make right now is to get fearful and think that the market has gone up too much too soon. Maybe that is true but the only thing to remember is “price is truth”. So, unless I see a meaningful negative downturn I will stay long my positions.

Today looks like YINN will be the big winner in my portfolio. It is up over 6% in early morning trading. Here is the 3-month chart in comparison to the SPY.

It has had a good run with not too much turbulence. It is up almost 40% compared to around 4% for the S&P 500. It just made another short-term high today. Looks very strong and I will continue to hold it for now.

Oct 17

XLK better returns than SPY

A quick observation that over the last 3 months the XLK (Technology sector) has performed better than the overall market (S&P 500) measured under SPY.

Here is the 3-month comparison chart:

SPY has returned 4.1% and XLK almost double that at 8.9%.

I am long TECL based on trend seen in XLK.

Oct 17

Still holding SOXL

I am still holding SOXL as a trade based on the trend seen in the semi conductors.

Above is the 6-month chart of the index. It is up around 16% over the last 6 months. SOXL is up around 50% in the same period.

My purchase price was $102.1 and current gain stands at around 13.5%

Nov 16

Trade Setups for FAS, TNA and SPXL

Markets are still looking good. In fact they look stronger and seems like the rest of the year could be an uptrend. But I never want to assume anything so will keep watching every day what the trend tells me. As of today, the trend is distinctly bullish.

I am long:

SPXL based on trend seen in the SPY. The trend looks bullish even though it had a down day last Friday.

FAS based on trend seen in XLF. This looks strongly bullish.

TNA based on trend seen in IWM. Again looks string bullish.

So, what about the others. Let us take a quick look at them.

QQQ: Is suffering and looking bearish with the election hangover over it.

XLE: Is kind of neutral at this time. I will keep watching.

EEM: This one is really broken. Completely bearish.

XLU: Completely broken.

XLI: Hugely bullish.

So, seems very much that market is specifically driving up based on expectations from the new President-Elect so far. I wonder if that expectation eventually takes the rest of the market higher or the expectations get dashed somewhere in the next days or weeks. The issue here is that there will be a lot of speculation from now till inauguration day with not much real policy decisions. So, fear could grip the market at any time.

Nov 16

Market Trend has Reversed to the Upside

The markets have completely turned around and the trend is bullish now. There is some fear that it has risen too much too soon. But in my opinion, the trendlines are clear and for the most part the rise has been orderly if one discounts the after hours midnight trading on election night.

I have reversed all my positions and anticipate the rise to continue for a while.

SPY: has turned bullish; I am long SPXL

IWM: same as the SPY – has turned bullish; I am long TNA

EEM: completely broken and with dollar headwinds I would stay away for now

QQQ: bearish; perhaps because of perceived positions of President-Elect Trump

XLF: hugely bullish; I am long FAS



Nov 16

The Aftermath

Markets are holding up well after the stunning election results from last night. It remains to be seen how long it can hold up. The big question mark is what Trump says about trade in the next few days. Having been very vocal about it during the pre-election phase, it is doubtful that he will not do anything.

I am still bearishly positioned in the market based on trends I have been watching. It is time to take stock of those trends again:

SPY: Still somewhat of a bearish trend; I will keep watching and take my bearish trade off if the trend changes

IWM: Similar to SPY this is also still in a bearish trend; I am currently positioned with a bearish trade through put options and long TZA

EEM: This is the only one that has dropped heavily, about 3% as of now. I am positioned with a bearish trade using put options.

USO: Very bearish. I am positioned the wrong way. I need to get out of my call option quickly while it is still breakeven.

XLV: Bearish but good bounce today and could be going towards neutral territory. I am positioned bearish with a put option. I may get out today or tomorrow based on how this behaves.

XBI: Getting out of the hole it was in very fast. Up 7% today which is over enthusiasm I think. I will get out of my bearish trade when there is some pullback in this space.

QQQ: Could also be getting out of the bearish trend. It all depends on how the rest of today shapes up.

XRT: Very bearish. I am long the January put options and will likely stay that way.


Nov 16

Open Bearish Trades: SPY, IWM, EEM, QQQ, XLV

I am positioned very bearishly at the moment in the market. My current trades are:

Long SPXS based on trend seen in SPY. My expectation is for SPY to be trending down. SPXS is the leveraged play for that.

Long TZA based on trend seen in IWM. TZA is the leveraged play for IWM going down.

Long EEM 36.5 December put options.

Long QQQ 114 December put options.

Long XLV 66 December put options.


Nov 16

Market Going Down Protect Yourself!

I took both my SPY puts and the IWM puts off with gains of 86% and 145%. I got into EEM put trade and a XLV put trade yesterday as well. I am very bullish on Square (SQ) and had got into a straight stock trade just before the earnings call on Tuesday. The stock is up about 5% since then. Usually I do not do straight stock trades. But SQ was trading at around 11 and it did not make sense to trade options. I am bullish about the company but may not hold on to it because I expect the market to go lower.
SPY: I closed my November puts and will roll over into the December puts if the market goes up a little today. I feel there is still around 5% downside to the market remaining.
IWM: looks exactly same as the SPY which is to say really bad. Again, I closed my November put options but will likely get into the December puts today or tomorrow.
EEM: bearish; I made a bearish bet yesterday using December put options
XLF: keeps drifting lower and moving towards a bearish zone; so the hope that Financials will pull the market up is diminishing
XLK: definitely looks in bear territory; may get in with a trade today
XLE: bearish trend
XLV: completely broken; I got in with a December put trade
XLU: massive break yesterday to the downside; looks like it will go lower
XLI: bearish
XBI: completely broken, tried getting in with a December put trade but could not get my price
VIX: seems unstoppable at this time
GLD: getting bullish as the market thinks this will be a safe haven

Oct 16

Markets on downward trend

The markets have been in a downward trend since my last post here couple of weeks back. I went long put options on the SPY and the IWM. I did not buy the SPXS and TZA as I had originally planned for as I wanted to define my risk and play a short-term trade.

The move down on the SPY has not been significant since my bearish trade. However, it has trended down. The move down on the IWM has been a little more pronounced and it could be the signal for the broader market to go down as well. I have November puts on both which are showing healthy profits as of now. I may close these and roll over into December puts if the trend is maintained.

To be noted is the fact that XLF is distinctly bullish while XLK and EEM are neutral. So, there is some risk that marjet reverses trend and starts getting bullish.

XLE is broken. XLU is bullish and XLI is bearish.

The VIX just trended up today again but is still low under 17 which is higher than where it has been for a while but still lower than what we would call a bear market.