#TrendTrading – short but whipsawing?

UPDATE (12/31:

For the last day of the trading year, the market followed through on short breadth signal without a price whipsaw.  As a result, on the day trade, the 3x-leveraged inverse index ETFs, SQQQ, netted 3% from the open to close; TZA, 1.5%; SPXS, 1.53%; and UVXY, the big winner (as often is the case), 5.8% for the day.

As a side note, TNA gave an scalp buy on the open that was stopped out for a 1.1% loss.

TREND TRADE: Short (or flat) from open, 12/29.

SWING TRADE: Flat from open, 12/30.

DAY/SCALP TRADE: Selling the bounce…

PRICE TREND: Down 3 days.

SETUP:

Today’s market action was mostly flat after Wednesday’s hard reversal to the downside.

So what now?

Tricky territory.  Possible the chop today was digesting a drop that was too far too fast. a pause in a word before more the slide down resumes tomorrow but the recent rally was so fast to the upside there is a chance it’s going to take more than one-day’s hemorrhage to kill the bull.

Yesterday’s sudden slam turned the longer-term breadth trend negative but short-term breadth turned up today so there are cross currents in play.

As often happens at the end of a move, the recent up move in this case, by the time it is clear it could be reversing, there is much at is oversold and could easily bounce to confound the change of trend.  If I had to guess I would guess the market bounces before any more significant downside.

That is a guess based, most notably because SPY (the S&P500 ETF), which topped on 12/13 and has now managed to pull back for nearly two weeks into oversold territory. Also, more than 40 of the stocks on my nifty-fifty stock list have been on sells now for two days – that is almost always the bottom or the beginning of the bottom of a swing (I say almost because when it isn’t it is because the market has suddenly turned into a hard downtrend, like in 2008).

Market followed through on short breadth signal:

(right click on chart for a larger view)

trendswing_2016-12-12_0818

#SwingTrading – up move in motion…

TREND TRADE: Long from open, 11/9.

SWING TRADE: Long from open, 12/27.

DAY/SCALP TRADE: Long, long…

PRICE TREND: Up 2 days.

SETUP:

Market breadth continues to climb, prices continue to rise, more and more stocks register individual buy signals…obviously, the move to the upside, triggered Friday, continued today…

It must be time again to state the market’s second clearest axiom -“the market will go up until it goes down.”  (The clearest axiom, reputed to have been stated by J.P. Morgan himself is “the market will fluctuate.”)

Of the stocks on my nifty-fifty list, 20 gave individual buy signals today, bringing the total to stocks-on-buys to 38 up from 18 Friday.  Too numerous to in total, the stocks include X, KRO, CECO, NUE, BAC, LECO, FORM and FAST.

More notable, all eight of the 3x-leveraged ETFs I follow are on buys — TQQQ, TNA, UPRO, XIV, FAS, BIB, ERX, SOXL.

Let’s call the featured chart below “After Consolidating SPY Tries To Resume Its Rally” because it likely will.

(right click on the chart for a larger view)

trendswing_2016-12-27_0818

 

 

#MarketTiming – trigger for an up swing…

TREND TRADE: Long from open, 11/9.

SWING TRADE: Long from open, 12/27.

DAY/SCALP TRADE: Long…

PRICE TREND: Up 1 day.

SETUP:

Market breadth turned up Friday before the Christmas weekend giving a renewed timing buy signal for Tuesday’s open.

Easiest play would be the long index 3x-leveraged ETFs – TQQQ, TNA, XIV, UPRO.

The top eight stocks in my newly sorted nifty-fifty list are HIIQ, C, X, BRKS, ACM, JPM, KRO, APOG.  Watching for continued bullishness there and bank stocks also were strong across the board Friday.

Stocks from the list triggering new individuals buy signals were TPC, TBPH, SKYW, DV, MDP.

Expecting a run up for at least the day and likely a swing for much of the week.

But as Trader Vic Sperandeo once said if the market doesn’t do what is expected, it is likely to do the opposite twice a much so am using tight time and price stops for this swing.

#DayTrading – the simplicity of the market…

TREND TRADE: Long from open, 11/9.

SWING TRADE: Flat from open, 12/22.

DAY/SCALP TRADE: Long bias but short scalp possible..

PRICE TREND: Down 2 days.

SETUP:

Today was down across the board on follow-through from the breadth turn down 12/20.  Assume tomorrow with be more of the same.

Markets go down until they don’t anymore.  Been told that is as dumb a statement as can be made but it is in fact absolutely true and it is the very basis of simplicity so often unrecognized in market movements.  It is that simple, the market is either up or it is down.

Recognizing the simplicity is where the money is made in trading.

Again, aggressive traders might want to play the short side via short ETF’s — SQQQ (featured on the chart below), TZA, UVXY.  In fact note the previous bounce on SQQQ, not a bad scalp for some profits.  Could happen again.  Now.

(right click on the chart for a larger view)

day_trade2_2016-12-07_1311

 

#DayTrading – signals…

TREND TRADE: Long from open, 11/9.

SWING TRADE: Buy from open, 12/14.

DAY/SCALP TRADE: Long bias but short scalp possible..

PRICE TRENDS: Down 1 day.

SETUP:

Failed to post this yesterday due to time conflicts but for the record this is what was.

Although the longer term remains bullish, market breadth gave an ominous short-term warning of a possible dip in the market (which was posted, see below).  As a result there were no day-trading stocks to buy and in case the dip might become a tumble, stops needed tightening on swing and longer-term positions to preserve profits according to one’s own risk tolerance.

Scalps would be easiest on the 3x-leveraged ETFs: SQQQ, TZA, SPXS and for the those addicted to the wild and one-day crazy, UVXY (today’s move featured below).

(right click on the chart for a larger view)

day_trade2_2016-12-07_1311

 

#MarketTiming – early warning signs…

One of the great things about market breadth is that over and over again it warns when a rally is weakening.  It usually takes more than one warning before a pause becomes a fall but…

Actually, it usually it takes three and we are at two early warnings now.

See the red circles on the chart below, both past and present.  And note how often they are the precursors for sell-offs to come. Sometimes this trading and investing is simpler than most analysts and Wall-Street players would have to common man believe.  But one must take heed.

Not saying this rally is over.  In fact, it is just the kind of rally (like the Brexit rally last summer) that can go on confounding bears and confounding indicators as it rides waves of too easy money, a seasonal bullishness, and like all bull markets the tendency to go up until it stops going up..

But the warnings are here now and beginning to repeat so this is becoming a time to take some profits or to tighten stop-loss points to make sure not too much is lost when a serious tumble finally takes hold.

(click on the chart for larger view)

twitter_day2016-12-12_0842

#DayTrading #Stocks – today’s net…

Despite the market weakness across the board today, and a turn down in short-term market breadth, stocks that signaled individual buys for today’s open finished the today’s day-trade with four winners and four losers, essentially flat (up .15%) as a group.

day_trade2_2016-12-07_1311

The leader (above) was HIIQ up 6.18 from today’s open, and NUE , featured with a chart in yesterday’s tweet, (below) managed a small gain (.37%).

#MarketTiming – the trend is…

The trend is your friend.  Heard that old saw a thousand times, and yet how many often is it forgotten?  The trend is your friend.  True last year, true this year.  True in 1920, 50, 70, 90 and now.  True, in 1929, and in 1987, and in 2000, and in 2008.

True now.

TREND TRADE: Long from open, 11/9 – UPRO up 14.6%, TQQQ up 6.4%, TNA up 37.1%, XIV up 23.8%.

SWING TRADE: Long from open, 12/16 – UPRO up .3%, TQQQ up .7%, TNA up 3.4%, XIV up 5.6%.

DAY/SCALP TRADE: Long on open, flat on close – UPRO up .25%, TQQQ up .55%, TNA up 1.45%, XIV up 1.61%.

Among the other 3x-leverage ETFs on the trend trade from 11/9 ERX is up 25.6%, SOXL up 27.6%, FAS up 30%.

Notable stocks on the trend trade AAPL up 5.2%, GS up 27.7%, TSLA up 9.2%, UAL up 25.9%, BID up 16.7%, FB down 4%.

Market timing the trend – quite spectacular, still on-going….

 

#DayTrading – signals…

TREND TRADE: Long from open, 11/9.

SWING TRADE: Buy from open, 12/14.

DAY/SCALP TRADE: Long.

PRICE TRENDS: TQQQ, up 1 day, TNA up 1 day, up down 1 day.

SETUP:

With short-term breadth once again turning up today within the long-term up trend, tomorrow’s open is again an opportunity to jump on this scary bullet train of a rally as it continues to whoosh by.

Stocks from my nifty-fifty stock list giving new individual buys today were FIVN, LSTR, TRMB, and TWI. Others of note giving individual buys signals for tomorrow included FB, CMCSA, AMZN (might be an option play) and NFLX (ditto the option play).

But virtually all index ETFs, even though overextended, are in play on the short-term breadth signal — TQQQ, TNA, UPRO — for day trades certainly, and possibly swing trades for more than a day.

Much of the prospect for success on this setup will depend on the Fed Reserve decision tomorrow and the market reaction to it.  Just saying…

UPDATE 12/14 close:

Yes, much depends on the market’s reaction the Federal Reserve’s rate hike.  And the reaction was down and as the market goes so go most stocks. Of the four stocks on buys today from the Nifty-fifty-list, one was up (barely) and three down for a loss of 1.2% on the entire basket. So it goes.