the resumption of the corrective down leg may have started at friday’s high of 1664.83, if i’m incorrect i shouldn’t be stopped out of my remaining 25% allocation of $uvxy shorts from 44.45. it’s been a tough past two to three weeks but we’ve been making money on both the long and short side on all the recent turns in the uvxy.
if the market continues to rally the move should be limited to spx 1679 to 1682.
FRIDAY’S MARKET UPDATE, 2013/09/06
some changes today: 60.0% invested, 25% short, 35% long into close, (25.0% of shorts are in double leveraged $uvxy (i am short volatility to take advantage of a potential spx rally) 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 longs will be purchased as necessary if the spx decline renews itself. i am in effect about 85.0% net long if the double leverage in market inverse uvxy shorts 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: *CHANGED TO A BUY SIGNAL @ SPX 1656 ON MORNING OF THURSDAY, 2013/09/05.
prior sell was as of the thursday, 2013/08/15, on the 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 daily reading @ -7, up 2, 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, down 2, 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 +0.05%, $IWM +0.27%, $SPX range (h,l,c): 1664.83, 1640.62, 1655.04.
$UVXY +1.26% @ 41.82, $NUGT +4.63% @ 74.39, $AAPL +0.60% @ 498.22, $NFLX -1.21% @ 291.54.
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: -0.10% today, +17.25% since March 05, 2013, vs. $spy benchmark +7.48%.
6. small cap folio of 49 stocks: -0.30% today, +32.64% since March 05,2013, vs. $iwm benchmark +12.05%.
7. nano cap folio of 18 stocks: closed, in cash since 2013/07/11 when spx closed at 1675.05 and iwm closed at 102.47. +18.79% since March 15, 2013 vs. benchmark $iwm +10.34%.
8. small cap B folio of 49 stocks: -0.29% today, +20.50% since March 10, 2013, vs. $iwm benchmark +9.24%.
9. large cap B folio of 10 stocks: closed, in cash since 2013/07/19 when spx closed at 1692.09. +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 , 2013/09/06 reading, up 6 to +8, bullish 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 : ACTIVE, ADD SHORTS AT SPX (new data point) 1543.
all other long term indicators remain on a BUY.
medium term “PSTT” is now on “SELL”.
F. MISCELLANEOUS DAILY COMMENTS:
some trades occurred today.
closed shorts from thursday,2013/09/05,where a 20% allocation of uvxy was shorted at 42.44 and closed at 40.25 on friday, 2013/09/06 for a 5.16% profit. a 5% allocation that was shorted on 2013/09/03 at 42.65 was closed at 40.25 on 2013/09/06 for a 5.64% profit. this trade will be moved to closed trades when the remaining 25% allocation of uvxy shorts from 44.45 are closed.
possible gap fill and fibonnacci retracement up to spx 1679 to 1682 has changed from a strong possibility to unlikely scenario. friday’s high may be the start of a “c” wave down to spx 1569.80 to 1560.33. i very much don’t like the fact that the qqq indicator is still on a sell while the “pstt” elliot indicator went on a buy on thursday.
PLAN FOR MONDAY, 2013/09/09:
1.update all stops on uvxy shorts and add uvxy longs:
change stop to 44.29 on the 2013/09/03 trade of uvxy remaining shorts, a 25% allocation (shorted at 44.45). buy a 30% allocation of $uvxy at 44.29 stop or at spx 1640, which ever occurs first.
2. in spx, the long awaited “b” wave type of small rally may be over at friday’s high of 1664.86. a new wave “c” down to my longer term target of spx 1560.33 to 1569.80 might have already begun. i’m guessing that the spx upside is now limited for the coming week.
CLOSED $NTSC in small cap B folio with a 178.88% profit, a buy out. used proceeds to buy $IWM.
again, 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 CLOSED TRADES:
the heavily weighted short term “PSTT” went on a “BUY” SIGNAL @ SPX 1656 ON MORNING OF THURSDAY, 2013/09/05. the prior SELL signal was 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 recent “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”.
current non folio holdings:
1. on tuesday, 2013/09/03, a 25% allocation of uvxy shorts from 44.45.
2. on monday, 2013/08/19, a 2% allocation of $aapl at 512.98 was added.
3. 2013/08/06: 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.
NON FOLIO HOLDING STOPS, stops good until cancelled:
$AAPL stop at 470.00 on longs. also shorting a 1% allocation at 470.00.
$NFLX short a 1% allocation at 267.03.
$NUGT stop at 70.24 on longs, shorting a 1% allocation at 70.24.
$UVXY stop on remaining 25% allocation of uvxy shorts updated: change stop to 44.29 on the 2013/09/03 trade of uvxy remaining shorts, a 25% allocation (shorted at 44.45). buy a 30% allocation of $uvxy at 44.29 stop or at spx 1640, which ever occurs first.
the aapl, nugt, nflx systems are longer term in nature and require larger stops to work, gains are large but losses are also large. system is not for those that want constant trades or are afraid of large stops or no stops.
other non folio recent closed trades:
1. closed on 2013/09/03: remaining 7.25% allocation of uvxy longs at 42.48. here is the history of the entire campaign: on 2013/08/15 added a 15% long uvxy from 37.18 as a hedge against remaining folio longs. also added a 10% long uvxy position at 38.03 on 2013/08/15 as a hedge against remaining folio longs. on fri., 2013/08/16, added a 2% long allocation of uvxy at 35.93
and a 2% long allocation at 37.54.
2. 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. on 2013/09/03,tuesday, the remaining 7.25% allocation of uvxy longs closed at 42.48.
3. 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 the 2013/08/05 close at 1.32.
4. 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.
5. 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.
6. on 2013/08/02 i closed $NUGT also from 6.88 at 6.22 for a 9.59% profit.
7. 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.
8. 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.
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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a chart and more commentary may be added this weekend prior to monday’s open. peace.
below is the same chart i provided last week. the only adjusted conjecture is the lowered probability of spx rising to 1680 prior to its’ “c” wave descent to 1569.80 to 1560.33. friday’s high at 1664.83 might just be the high for the coming one to two weeks, it is still a wee bit too early to surely tell but the odds for it are ever increasing.