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Proactive Market Timing
Proactive Market Timing Service

Market Timer: Fari Hamzei

Executive Officer: @Fleet_Adm_Tiko

Editors: Nancy Scott

Here is the most recent How the PMT Market Bias Service Works Video

Weekly PMT Webinars on YouTube   PMT Archives   Current PMT Issue

Most Recent PMT vs SPX Performance Chart

Wednesday, January 27, 2016, 2300ET
Our DAILY Timing Model gives a BUY Signal

Note: SPX put in an outside bar reversal today and SKEW downticked to 129 (its -1.5 sigma).

Tuesday, January 26, 2016, 2229ET
Notice of Change of Market Bias with Timer Digest

Dear Jim,

Given AAPL's lower guidance & continued weakness in Crude, markets should not be too anxious to welcome Auntie Janet tomorrow (riding into town on a [dark] horse) and then we have AMZN reporting on Thursday.

Therefore, we are going SHORT SPX as of tonight’s Close (1903) and thus locking in another 67 S&P handles from going Short last Tuesday (from 1881) then reversing to long the next day (from 1859).


Fari Hamzei

Monday, January 25, 2016, 1050ET
Companion Chart for Market Bias Review, Issue #128

Sunday Night, January 24, 2016, 2230ET
Market Bias, Issue #128

Our current SPX Bias with Timer Digest: LONG SPX as of Wednesday, January 20, 2016 Close at 1859.33
Our previous Bias: SHORT SPX (as of Tuesday, January 19th, 2015 Close at 1881.33)

This WEEK’s Bias = LONG SPX or SPY via Calls Spreads

Profit Target = 1950-1970
Money Management Stop = 1900

BOTTOM LINE: We expect Auntie Janet to ride into town, on a white horse this week (for the FOMC Meeting), and make SPX rally into the 1950-1970 zone.

NOTE: All LEVELS mentioned here have been, are, and will be, based on the S&P-500 SPX Cash Index, and not the ES Futures. Tomorrow after the first hour is complete, we will post here a companion chart showing critical short-term WEEKLY levels to watch for possible “retest failures.”

Also Note: Once one the targets is hit (Profit or Money Management), the trade for that week is over. Go to Cash and wait for the next PMT Issue.

Fari Hamzei

Sunday, January 24, 2016 2215ET
Market Timing Charts, Analysis & Commentary for Issue #128

Timer Charts of S&P-500 Cash Index (SPX) + NASDAQ-100 Cash Index (NDX)

Most recent S&P-500 Cash Index (SPX): 1906.90 up +26.57 (up +1.4%) for the week ending on Friday, January 22nd, 2016, which closed above its -1 sigma.

SPX ALL TIME INTRADAY HIGH = 2134.72 (reached on Wednesday, May 20th, 2015)
SPX ALL TIME CLOSING HIGH = 2130.82 (reached on Thursday, May 21st, 2015)

Current DAILY +2 Sigma SPX = 2116 with WEEKLY +2 Sigma = 2146
Current DAILY 0 Sigma (20 day MA) SPX = 1966 with WEEKLY 0 Sigma = 2012
Current DAILY -2 Sigma SPX = 1817 with WEEKLY -2 Sigma = 1877

NYSE McClellan Oscillator = -12 (-150 is start of the O/S area; around -275 to -300 area or lower, we go into the “launch-pad” mode, over +150, we are in O/B area)
NYSE Breadth Thrust = 40.6 (40 is considered as oversold and 65 as overbought)

By midday last Wednesday, SPX has had its worst 3-weeks of any new year, ever, being down over 11.4% with NDX being down 13% in 2016. McClellan Oscillator & Breadth Thrust were showing extreme short-term oversold readings. The massive rally since that intraday low ripped the faces of the shorts and left us longs absolutely breathless.

Canaries [in the Coal Mine] Chart for DJ TRAN & RUT Indices

200-Day MA DJ TRAN = 8106 or -16.4% above DJ TRAN (max observed in last 5 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1190 or -14.3% above RUT (max observed in last 5 yrs = 21.3%, min = -22.6%)

By midday Wednesday both DJ Transports (proxy for economic conditions 6 to 9 months hence) & Russell 2000 Small Caps (proxy for RISK ON/OFF) were at their respective WEEKLY -3 sigmas for three weeks in a row !! If history is any guide, we think 1-month to 3-month forward, SPX should trade much higher. Having said that, we still think a key retest failure is ahead and we need to keep our guards up.

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX =2023 or -5.8% above SPX (max observed in last 5 yrs = +8.6%, min = -9.3% )
200-Day MA SPX = 2050 or -7.0% above SPX (max observed in last 5 yrs = 15.2%, min = -14%)

All of our Eight DeTrenders are still negative but now they are all reversed up.

HA_SP1_momo Chart

WEEKLY Timing Model = on a BUY Signal since Friday 11/27/15 CLOSE
DAILY Timing Model = on a SELL Signal since Tuesday 1/05/16 CLOSE
Max SPX 52wk-highs reading last week = 3 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 178 (over 40-60, the local minima is in)
HA_SP1 = above its -1 Sigma
HA_Momo = +0.91 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

VIX = 22.3 which is just above its 0 sigma (remember it’s the VIX’s vol pattern (its sigma channels) that matters, and not the level of VIX itself (this is per Dr. Robert Whaley, a great mentor and the inventor of original VIX, now called VXO. VIX usually peaks around a test of its +4 sigma).

This shockwave is over, at least for now, ioho.

5-day TRIN & TRINQ Charts

Both 5-day TRIN (for NYSE) and 5-day TRINQ (for NASDAQ) are very neutral here.

Components of SPX above their respective 200day MA Chart

As anticipated here before, the 20% level was tested on Wednesday and then this scoring indicator rebounded. Next target is the 34-35% zone.

SPX SKEW (Tail Risk) Chart

SPX SKEW (Tail Risk) = 134 is near its -1 sigma (normal = 120-125, range 100-150)

All Quiet on the MidWestern Front?
Yes, until the next shoe drops, ioho.

3-month VIX Futures Spread(VX) Chart

Our 3-month VIX Futures Spread (LONG FEB16 SHORT MAY16), was at +2.37 when Wednesday low was put in.

HA_SP2 Chart

HA_SP2 = 51.67 (Buy signal <= 20, Sell Signal >= 80)

At ~52, this prop indicator showed a classic bullish divergence last Wednesday. Worth noting on this chart is that the very short-term HAPI StockRSI has started an upward move.

SPX 2008 Analog for SPX 2016

FWIW, my co-pilot, @Capt_Tiko (now with over 240 Twitter Followers) is anxiously following a track using 2008. I may have to step in and provide some guidance and counsel.

US Treasury T-Notes & T-Bonds Yields Chart

Treasury Complex Yields snapped up starting mid-Wednesday, again confirming the funds flowing back into equities.

Good luck this week,
Fari Hamzei

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