for several weeks i have been warning of a short term top to be expected in the 1700 to 1740 spx neighborhood. have my expectations changed? no, we are in a b wave bounce which i warned of within last weeks comments’ section “expected to commence on thursday”. i’m looking for a possible gap fill at 1679 to 1683. we don’t even need this certitude and fulfillment in calling tops and bottoms to profit and aren’t in the business of calling tops and bottoms. we are in the business of managing unexpected tops and bottoms and will try to adjust risk accordingly.
FRIDAY’S MARKET UPDATE, 2013/08/23
unchanged today: 64.00% invested, 0% short, 64% long into close, 29% of longs are in double leveraged $uvxy longs (i am long volatility as a hedge against further spx declines)2% long $aapl, 3% long nugt and 30% long in 3 long term folios: big cap, small cap and small cap B. multiple stock folios will remain fully invested but more $UVXY will be purchased as necessary. i am in effect about 23% net short if the double leverage in uvxy is taken into account.
see section F or blog comments’ section outside of daily market update body for any of today’s trade details .
B. SHORT TERM INDICATORS/SYSTEMS:
1. elliott PSTT: SELL as of the thursday, 2013/08/15, close below spx 1682.10. previous buy signal was from friday, 2013/07/05, when we closed above 1627 spx.
prior signal was a SELL @ spx 1607 on, 2013/06/20, thursday morning.
the PSTT is the most heavily weighted indicator for signaling a change in weekly to monthly wave counts and trend changes.
2. qqq indicator: changed reading @ -9, up 1, still SHORT as of friday, 2013/08/09. prior BUY signal on 2013/08/02. prior signal was a sell on monday, 2013/07/29.
prior BUY signal was on fri., 2013/07/05.
on a scale of -10 to +10 , need a 0 to sell ………and -6 to short. +6 is a buy and remains a buy until 0 is triggered; 0 is neutral. indicator heavily weighs momentum in unison with smart buyer activity.
a negative 6 (-6) remains a short until a neutral 0 is triggered).
3. smart money indicator: -8, unchanged reading, still on a SELL as of 2013/07/25, prior buy was thursday’s close on 2013/06/06 . prior signal was a neutral on 2013/04/17. prior BUY signal was on wed., 2013/04/09.
an -8, once triggered is usually a sell and remains so until a +7 is triggered.
C. TODAY’S BENCHMARKS:
$SPY +0.34%, $IWM +0.25%, $SPX range (h,l,c): 1664.85, 1654.81, 1663.50.
$UVXY -3.97% @35.76, $NUGT +8.28% @ 94.80, $AAPL -0.39% @ 501.02.
1. JULY monthly 2faced longs: closed 2013/08/15, in cash.
2. JULY monthly 2faced shorts: folios was closed 2013/08/15, in cash.
3. weekly 2faced longs: folio is in cash for next few weeks.
system holds longs for a full week to 2 weeks.
4. weekly 2faced shorts: folio is in cash for the next few weeks.
system holds longs for a full week to 2 weeks.
i also use the weekly 2faced stocks as day trading candidates.
5. large cap folio of 49 stocks: +0.21% today, +17.69% since March 05, 2013, vs. $spy benchmark +7.85%.
6. small cap folio of 49 stocks: +0.03% today, +30.65% since March 05,2013, vs. $iwm benchmark +12.90%.
7. nano cap folio of 18 stocks: closed, in cash since 2013/07/11. +18.79% since March 15, 2013 vs. benchmark $iwm +10.34%.
8. small cap B folio of 49 stocks: -0.42% today, +26.04% since March 10, 2013, vs. $iwm benchmark +10.07%.
9. large cap B folio of 10 stocks: closed, in cash since 2013/07/19. +10.47% since March 29, 2013, vs. $spy benchmark +7.98%.
E. LONG TERM INDICATORS:
1. heaven/hell crash indicator: friday , 2013/08/23 reading, up 5 to -2, neutral to caution readings for longs is warranted. prior week’s reading was at -7, a reading of caution for longs.
NO CRASH IN SIGHT until we see a reading of -10.
next signal update will be on 2013/08/30.
a rare -10 signals a 2008 type of crash. currently there are no signs of an upcoming crash. an extremely bullish +10 is very positive for the next several days to weeks for the stock market.
this indicator is more valuable as a crash indicator; i make sure i am heavily short at a -10.
2. early warning intermediate to long term two stage indicator for hedging: unchanged: ACTIVE, ADD SHORTS AT SPX 1596.
all other long term indicators remain on a BUY.
medium term “PSTT” is now on “SELL”.
F. MISCELLANEOUS COMMENTS:
possible gap fill and fibonnacci retracement upto spx 1679 to 1682 might be in progress. upon such an occurrence it will creat a good opportunity for adding $uvxy longs at lower prices. i also plan on
adding a 10% allocation of $UVXY longs at 40.76 for monday, good until cancelled.
looking for 1630 spx as a near term “canary in cold mine” target . once hit it will give some indication as to whether we continue dropping or have a “b” wave type of small rally followed by new lows to my longer term target of spx 1560.33 to 1569.80.
the heavily weighted short term “PSTT” has finally turned gears and is officially on a SELL signal as of thursday’s, 2013/08/15, close below 1682.10.
the qqq indicator went on a sell short on friday, 2013/08/09, with a -7 reading. .the early warning long term two stage indicator for hedging gave a signal for hedging at spx 1596 ON WEDNESDAY, 2013/08/07 and remains active.
the smart money indicator went on a sell on thursday, 2013/07/25 and remains on a sell. the prior buy was thursday’s,2013/07/06, close.
uvxy shorts were added upon the current “pstt buy signal triggered on friday, 2013/07/05.
uvxy shorts from 62.88, 60.58 and 72.69 were closed out monday, 2013/08/12, at an average of 36.55 early that morning per friday guide lines – for a 41.9% profit, e.g.” will sell at spx 1684.75 or uvxy 37.01 which ever is hit first”.
the preponderance of evidence is heavily leaning toward the likelihood of a 5 to 10% correction, and i am net short.
current non folio holdings:
1a. on monday, 2013/08/19, a 2% allocation of $aapl at 512.98 was added.
1b. edited on 2013/08/27: 0n thursday, 2013/08/15 i added a 15% allocation of uvxy longs at 37.18 and a 10% long allocation of uvxy at 38.03. on fri., 2013/08/16, added a 2% long allocation of uvxy at 35.93 and a 2% long allocation at 37.54, also added a 1% long allocation of nugt at 9.34 or 93.40 after adjusted for a 10 to 1 reverse split effective on the 2013/08/20 open and a 1% long allocation at 9.27 or 92.70 after the adjusted for a 10 to 1 reverse split effective 2013/08/20 open.
2. added a 15% long uvxy from 37.18 on 2013/08/15 as a hedge against remaining folio longs.
also a 10% long uvxy position at 38.03 on 2013/08/15 was added as a hedge against remaining folio longs.
other non folio recent closed trades:
1. long tna holdings from weeks ago were closed on 2013/08/05 open at 56.28. fnma long holdings from weeks ago were closed at today’s close at 1.32.
2. uvxy shorts, closed on monday, 2013/08/12, at an average of 36.55 early morning per friday guide lines for a 41.9% profit.
3. on friday,2013/08/09, i closed half of the $NUGT shorts from 6.88 at 6.46 per daily market update stop instructions for a 6.10% profit.
4. on 2013/08/02 i closed $NUGT also from 6.88 at 6.22 for a 9.59% profit.
5. stopped out of $NUGT longs on monday, 2013/07/22, at 7.33 average after being long from 5.70 a 1% allocation and from 7.46 for a 2% allocation for an average price of 6.58 for an 11.39% profit.
6. a 20% allocation of tna shorts were added on friday, 2013/07/26, at 57.56. on 2013/07/31 the 20% allocation of shorts were closed out at a 2.7% average loss for a 1/2 of 1% dent in my total portfolio, thus the cost of hedging and a small price to pay.
see comments section for any of today’s trades and other adjusted stops, if any.
CAUTION IS WARRANTED FOR EQUITY LONGS,
currently 29% hedged in double leveraged $UVXY, that is, i am long volatility.
summary: waiting for the elliott b wave gap fill to complete in the 1679 to 1682 area to add more $UVXY longs to capture profits from the expected spx decline to about 1560.33 to 1569.80 based on fibonnacci and elliott wave. let’s manage the risk and see how things pan out, it should be challenging and interesting.