Proactive Market Timing Archive

Sunday, March 26, 2017, 2145ET
Market Bias for Issue #185

Our current Market Bias with Timer Digest is LONG SPX as of Tues Feb 21 at 2365.38
Our previous Market Bias was SHORT SPX as of Thur Feb 16 at 2347.22

Here are the trade parameters for this week:

SPX Secondary Profit Target for last 20% of our position = 2380-2385
SPX Primary Profit Target for first 80% of our position = 2365 MOD
SPX BreakEven Stop (Last Close) for last 20% of our position = 2328 MOD
SPX Money Management Stop for 100% of our position = 2320 MOD

Action Asset Expiration Strike Option

BUY SPY 04/13/2017 233 Calls

SELL SPY 04/13/2017 238 Calls

You need to execute both legs and hold it as a Call Spread.

Note A: Once the Primary Profit Target has been reached, traders are advised to close 80% of their position in order to lock in profits. The remaining balance can be carried over with a BreakEven STOP, based on the SPX level at the time of entry, in order to make the trade a zero-risk trade with the final position running to reach the Secondary Profit Target. Once either Secondary Profit or Money Management (BreakEven STOP after the 80% peel-off) is hit, our Option/ETF trade for that week is over. Go to Cash and wait for the next PMT Issue.

Note B: When we change our Market Bias with Timer Digest, You need to go FLAT asap. With PMT Pro, that is before the Close that day and with the basic PMT, at the open of the next day.

Fari Hamzei

Sunday, March 26, 2017, 2100ET
Market Timing Charts, Analysis & Commentary for Issue #185

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

Most recent S&P-500 Cash Index (SPX): 2343.98 down -28.62 (down -1.2%) for two weeks ending Friday, March 24, 2017, which closed just above its -2 sigma.

SPX ALL TIME INTRADAY HIGH = 2400.98 (reached on Wednesday, March 1, 2017)
SPX ALL TIME CLOSING HIGH = 2395.96 (reached on Wednesday, March 1, 2017)

Current DAILY +2 Sigma SPX = 2397 with WEEKLY +2 Sigma = 2415
Current DAILY 0 Sigma (20 day MA) SPX = 2369 with WEEKLY 0 Sigma = 2285
Current DAILY -2 Sigma SPX = 2341 with WEEKLY -2 Sigma = 2155

NYSE McClellan Oscillator = -21 (-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 = 52.1 (40 is considered as oversold and 65 as overbought)

While I am at my command post, nothing happens. So I stepped out of Dodge and they sent in the torpedoes.... last Tuesday, SPX moved down about 4 sigma or about 1.2%. Are we oversold? not yet, IMHO.

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

200-Day MA DJ TRAN = 8475 or 5.4% below DJ TRAN (max observed in last 5 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1279 or 5.9% below RUT (max observed in last 5 yrs = 21.3%, min = -22.6%)

DJ Transports (proxy for economic conditions 6 to 9 months hence) made a sizable move south on Tuesday to its -2.5 sigma after failing to hold its 50bar MA the week before.
Russell 2000 small caps (proxy for Risk ON/OFF) also sold off on Tuesday to -2 sigma and then settled by Friday at its -1 sigma. RISK still remains ON but it is definitely no longer RED HOT.

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2330 or 0.6% below SPX closed on Friday (max observed in last 5 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2208 or 6.1% below SPX (max observed in last 5 yrs = 15.2%, min = -14%)

Two of our eight DeTrenders remain negative now. The DeTrenders for DJ Tran & RUT will continue to be harbingers of future price behavior in broad indices.

HA_SP1_Momo Chart

WEEKLY Timing Model = on a BUY Signal since Friday 12/16/16 CLOSE at 2258
DAILY Timing Model = on a SELL Signal since Wednesday 3/22/17 CLOSE at 2348
Max SPX 52wk-highs reading last week = 42 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 14 (over 40-60, the local minima is in)
HA_SP1 at just below its -1 sigma channels
HA_Momo = -4 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

VIX is currently at its +1.5 sigma level at 13.96, having traded over 14 which was a tad over its +3 sigma (remember it�s the VIX�s volatility 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).

In contrast with previous weeks, the VOL Complex with exception of OVX (Crude Oil) moved up.

5-day TRIN & TRINQ Charts

NYSE 5-day TRIN gave a BUY Signal last Thursday while NASDAQ 5-day TRIN is NEUTRAL but leaning to a SELL signal.

Components of SPX above their respective 200day MA Chart

This scoring indicator dropped to 76% after failing at its 20day MA (79% area). NO DIVERGENCE with SPX here means no signal here.

SPX SKEW (Tail Risk) Chart

Last two weeks we kept alarming everyone in the chatrooms and on Twitter that SPX SKEW (Tail Risk) was rising. As matter of fact, on Friday March 17 (St. Patty's Day), it printed a new ATH of 154.34 (normal = 120-125, range 100-150). Well, you saw what happened on Spring Equinox +1 (last Tuesday).

All quiet again on the Eastern & Mid-Western Fronts? We don't think so, not with Grumpie way over his head when comes to details and facts.....

3-month VIX Futures Spread(VX) Chart

Our VX Spread (LONG APR SHORT JUL) behaved pretty docile this past week, closing at -2.95 near its hourly +3 sigma on Friday.

HA_SP2 Chart

HA_SP2 = 26 (Buy signal <= 25, Sell Signal >= 75)

The 2nd mouse is now stalking SP2.... we should a local minima this week after 25 is breached. I love this prop indicator.

US Treasury T-Notes & T-Bonds Yields Chart

HOUSTON, the lift-off of the Yield Curve fizzled, specially the long end pulled back to its Monthly Pivots......

Fari Hamzei