i’m guessing the coming month will be very challenging for the impatient as well both the veteran and inexperienced trader/investor. with the possibility of heightened middle eastern tensions and a choppy market trend one needs to sit tight and allow the indicators to speak to us.
short term indicators, especially the smart money indicator tells me a small blip of a rally is due but oversold indicators sometimes become more oversold as we all know. more importantly, the elliott “PSTT” remains on a sell and is not even close to a buy signal. if and when the buy is triggered it will likely be a a very brief signal because my qqq indicator is still severely bearish.
any longs (or uvxy shorts) i might add will be short lived.
continue to watch price and forget about the news and trying to anticipate news releases.
FRIDAY’S MARKET UPDATE, 2013/08/30
no changes thursday or friday: 42.25% invested, 0% short, 42.25% long into close, 7.25% 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 10% long in each of 3 long term folios: big cap, small cap and small cap B folio. multiple stock folios will remain fully invested but more $UVXY will be purchased as necessary. i am in effect about 27.75% net long if the double leverage in market inverse uvxy longs are 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: unchanged reading @ -10, 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 , we 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: +3, up 8, 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.
a -8, once triggered is usually a sell and remains so until a +7 is triggered.
C. TODAY’S BENCHMARKS:
$SPY -0.32%, $IWM -1.56%, $SPX range (h,l,c): 1640.08, 1628.05, 1632.97.
$UVXY +2.40% @ 46.95, $NUGT -4.30% @ 76.03, $AAPL -0.91% @ 487.22, $NFLX -1.37% @ 283.91.
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: -0.60% today, +15.12% since March 05, 2013, vs. $spy benchmark +5.93%.
6. small cap folio of 49 stocks: -2.17% today, +30.35% since March 05,2013, vs. $iwm benchmark +9.85%.
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: -1.39% today, +22.52% since March 10, 2013, vs. $iwm benchmark +7.09%.
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%.ocks: -0.15% today.
E. LONG TERM INDICATORS:
1. heaven/hell crash indicator: friday , 2013/08/30 reading, up 4 to +2, neutral to slightly positive reading for longs. prior week’s reading was at -2.
NO CRASH IN SIGHT until we see a reading of -10.
next signal update will be on 2013/09/06.
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: changed: ACTIVE, ADD SHORTS AT SPX 1543.
all other long term indicators remain on a BUY.
medium term “PSTT” is now on “SELL”.
F. MISCELLANEOUS DAILY COMMENTS:
no trades occurred today.
possible gap fill and fibonnacci retracement upto spx 1679 to 1682 still remains a strong possibility prior to it making a “c” wave u turn to 1569.80 to 1560.33.
PLAN FOR TUESDAY, 2013/09/03:
1. raise stop to 42.49 on the remaining 7.25% allocation of long uvxy.
2. in spx, a slight drop below 1627.47 is expected followed by the long awaited “b” wave type of small rally to about 1680 followed by new lows to my longer term target of spx 1560.33 to 1569.80 is still the road map. i’m guessing that the spx downside is limited for this week. the following plan is in order :
shorting a 30% allocation of $UVXY @spx 1646.75 for monday only, buying only a 5% allocation of $UVXY at spx 1619, one filled order cancels the other order; this trade is triggered only by the spx reading. as you know uvxy trades inversely to spx that is, if spx rises uvxy drops.
avoid all market noise and focus only on price action. price activity absorbs all information and churns out a trail, watch this trail.
BRIEF REVIEW OF RECENT SYSTEM SIGNALS AND TRADES:
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 ON WEDNESDAY, 2013/08/07 and remains active at an updated SPX 1543.
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:
1. on monday, 2013/08/19, a 2% allocation of $aapl at 512.98 was added.
2a. on fri., 2013/08/16, added a 2% long allocation of uvxy at 35.93
and a 2% long allocation at 37.54.
on same day 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.
2b. added a 15% long uvxy from 37.18 on 2013/08/15 as a hedge against remaining folio longs.
also added a 10% long uvxy position at 38.03 on 2013/08/15 was added as a hedge against remaining folio longs.
on 2013/08/28, a 14.5% allocation of uvxy longs were closed out at 42.01 and a 7.25% allocation of uvxy longs were closed out at 44.08. maintaining a hard stop on the remaining 7.25% allocation of uvxy longs.trade to be moved to closed trades once the remaining 7.5% long allocation is closed out.
NON FOLIO HOLDING STOPS, stops good until cancelled:
$AAPL stop at 456.02. also short a 1% allocation at 474.01.
$NFLX short a 1% allocation at 267.03.
$NUGT no stop. short a 1% allocation at 48.01.
$UVXY stop on remaining 7.25% allocation of longs at 42.49.see “daily miscellaneous comments” section above for next trade details.
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.
currently 7.5% hedged in double leveraged $UVXY, that is, i am long
volatility. aapl, nugt, and nflx are high risk long term trades with wide stops not for the fain of heart, that is why my trade allocations for these trades are so small.
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sound money management shouldn’t depend on guessing market direction and i don’t, but purely for entertainment reasons and upon readers requests i present the following chart ( the wave a needs to complete its 5th wave down, then we rally in a slow and sloppy fashion as is usually the earmark of a “b” wave to at least about 1680 or possibly higher then back down to about 1569.80 to 1560.33. if the “b” wave formation approaches this year’s high the “c” wave down will be more shallow to about 1620 and not 1569 to 1560.
if time permits i will add some possible additions to the september monthly 2faced long/short folio.