18
Nov 16

The Bull Ride Continues

Firstly, I sold off my long positions on TNA and FAS yesterdat just before close. I may have sold off early because it was clearly not based on any trend reversal. But I feel the Financials and the Small Caps havebeen on a straight-up trajectory and did not feel confident that that could continue. I will watch the market and may get into them again soon.

Here is how the trends look at this time:

SPY: nicely bullish, no sign of any jitters, I am long SPXL

IWM: very much bullish, but I took my position in TNA off as I thought that this sector has gone up too much too soon. I could be wrong and this could certainly keep going higher in which case I will get in again

EEM: completely broken and bearish

QQQ: this looks neutral at this time; I do gave a small options play on the long side on this with the expectation that the technology sector will catch up to the broader market soon

XLF: very bullish but I took off my long position in FAS thinking the financials have gone up too much too soon

XLE: bullish

XLI: bullish

XME: bullish – I am long call options

XBI: bullish – I am long call options

XLV: somewhat bullish

XLU: broken and looking bearish


14
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.


11
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

 

 


09
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.

 


08
Nov 16

Markets Quiet Before The Storm

The markets went up dramatically yesterday and today it is very calm and lukewarm. It does look like yesterday’s action was the recognition was that Clinton is going to win. I guess the question in everyone’s mind is what happens tomorrow – the day after the election. In general my sense is that the risk is still to the downside. There are several reasons for that. One is that Clinton wins but not with a good mandate. This could even mean (at its worst) a contested election result. That is a really bad situation for the markets. Of course if Trump wins all bets are off. If Clinton wins with a large mandate then markets could go higher.

Let us not forget that the general trend of the market is down. The SPY bounced but is still trending bearish. Same with IWM, EEM and QQQ. The XLF is showing signs of bouncing back towards a bullish trend but it is alone in that action. The XLV and XBI are still broken.

So, I am still hedged as I see the risk to the downside.


07
Nov 16

The Election Trade

From all indications it looks like Hillary Clinton will win the election tomorrow. What is really interesting is whether the Democrats will also take the Senate. Right now it looks that way. If that happens it would be a strong mandate for Hillary. The House seems like will still remain Republican. So, the overall givernment will be split. However, having the Senate behind her may make stronger and the expectations from her first 2 years could be higher than normal.

The general concensus is that there will be a bounce in the aftermath of a Clinton victory. In fact, the pre-market numbers look like there will be a very strong bounce of the lows we have seen.

From the trends perspective, SPY is still very bearish. IWM could be looking to bounce. EEM looks bad. The Technology sector (XLK and QQQ) both look bad. The XLF is neutral. The XLE is broken as well.

XLV and XBI both look broken and will likely have a negative impact even if Hillary wins. I am long puts on both of them.

I am positioned bearishly in the market but will look to trim if I see the trends turning for real.


04
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.

 


03
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

02
Nov 16

Market Is Broken!

Market is broken and it is time to play the downside at least till the election which is a few trading days away.
SPY: broken bad; looks to be trending below and will likely keep dragging the market down. I am long the November puts which are holding some healthy gains so far; I contemplated taking my profits yesterday just before close and then did not as the market really looks broken
IWM: the trends looks exactly same as the SPY; again, I am long the November puts and holding some good gains on it
EEM: somewhat bearish; looks like it has held itself somewhat so far but risk to the downside is more than any chance of upside
XLF: interestingly this is finally starting to go down in sync with the broader market; there was some hope that the financials would take the market up but that hope is fading
XLK: just broke to the downside yesterday and looks bearish
XLE: bearish trend
XLV: completely broken; I may get in a bearish bet today
XLU: seems to be the only odd one out; trending bullish
XLI: trending bearish
XBI: completely broken – maybe because of the politics around this sector; I may get in with a bearish play
VIX: extremely bullish and looks like it is going to break the 20 number; I do not want to trade it though because it is really volatile as its name suggests

01
Nov 16

Market Trending Down

The markets continue to trend down and my put options in SPY and IWM are well in the profits. I am going to continue to hold them with an eye out to 18 November which is their expiration date.

Both the SPY and IWM are trending in similar manner and look very weak. This is in combination with the VIX having back to back over 5% rise which is signaling the downward trend likely continues most of this week through the November 8 election date.

The election polls are also likely going to show that the race is tightening which means more uncertainlty for the market. There are plays for each candidate winning which I will look into later in the week.

Interestingly XLF (Financials) and XLK (Technology) have been somewhat of a good story with either a upward or neutral trend. It remains to be seen if these sectors bring up the overall market or swoon to take the market further down.

Both the XLV (Healthcare) and the XBI (Bio Technology) sectors have been pummeled and look really broken. XLU (Utilities) and the XLE (Energy) look neutral to me.

EEM (Emerging Markets) are still neutral but could be heading downward as well.