#MarketTiming – the rally takes off…

TREND TRADE: Long from open, 1/4.

SWING TRADE: Long from open, 1/4.

DAY/SCALP TRADE: Buying the dips…

PRICE TREND: Up 3 days.

SETUP:

As projected, the market moved nicely to the upside from today’s open.

My nifty-fifty stock list has moved from 40 stocks  on sells, 22 oversold, to 40 stocks on buys, 19 overbought, in two days.  Now that is a bounce!  At this point I expect more of the same into Thursday and will tighten stops on the swing trade.

The 3x-leveraged index ETFs mentioned in yesterday’s post were all up from the buys on today’s open — TQQQ up 1.2%, TNA up 3.6%, XIV UP 3.7% and UPRO up 1.1%. The sector ETF were lead by BIB up 5.2%, FAS up 2.4% but SOXL was down .4% and ERX also down 1.1%.

Of the stocks mentioned — GS, DIS, NAV, BAC NVDA- only NAV was loser at down 1.1%.

As for the trend trade, it has now clearly reversed to the upside, and it is a matter of buying dips as the rally moves forward.

For those who pay attention to these things, the Dow could easily take out 20,000 by the end of the week.  But arbitrary levels matter less then getting the general direction of the market right, which is what market timing is all about.

On the chart below, just for fun, is a look at the SPY monthly at-the-money 225 call option on the swing trade from yesterday now up 53%, and the day trade on the same option up 15% from the open today to close.

(right click on the chart for a larger view)

optionsday2017-01-04_1213

 

 

 

 

 

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