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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

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Most Recent PMT vs SPX Performance Chart

Monday, November 6, 2017, 1005ET
Companion Chart for Market Bias Review, Issue #216

Monday, November 6, 2017, 1000ET
Market Bias for Issue #216

Our current Market Bias with Timer Digest is SHORT SPX as of Friday NOV 3 at 2587.84
Our previous Market Bias was LONG SPX as of Friday OCT 20 at 2575.21

            Here are the trade parameters for this week:

SPX Money Management Stop for 100% of our position = 2601
SPX BreakEven Stop (Last Open) for last 20% of our position = 2587
SPX Primary Profit Target for first 80% of our position = 2560
SPX Secondary Profit Target for last 20% of our position = 2545

Action Asset Expiration Strike Option
BUY SPY Friday NOV 17 259 Puts
SELL SHORT SPY Friday NOV 17 255 Puts
You need to execute both legs and hold it as a Put-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, November 5, 2017, 2233ET
Notice of Change of Bias with Timer Digest

Dear Jim,

After reviewing the chartpatterns for Friday’s Close (bullish price action of stock indices with non-confirming divergences in internals, DJ TRAN & RUT), and, given the news overseas since Saturday evening, we are changing our market bias for about a week to 10 days.

Therefore, we are going SHORT SPX as of 2587.84……

Fari Hamzei

Sunday, November 5, 2017, 2230ET
Market Timing Charts, Analysis & Commentary for Issue #216

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

Most recent S&P-500 Cash Index (SPX): 2587.84 up +6.77 (up +0.26%) for the week ending on Friday, November 3, 2017, which closed at its +2 sigma.

SPX ALL TIME INTRADAY HIGH = 2588.42 (reached on Friday, Nov 3, 2017)
SPX ALL TIME CLOSING HIGH = 2587.84 (reached on Friday, Nov 3, 2017)

Current DAILY +2 Sigma SPX = 2588 with WEEKLY +2 Sigma = 2596
Current DAILY 0 Sigma (20 day MA) SPX = 2565 with WEEKLY 0 Sigma = 2489
Current DAILY -2 Sigma SPX = 2542 with WEEKLY -2 Sigma = 2383

NYSE McClellan Oscillator = -67 (-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 = 47 (40 is considered as oversold and 65 as overbought)

Both DJ TRAN and RUT failed to confirm new highs in SPX, NDX & DJIA. We view this as a tad troublesome.

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

200-Day MA DJ TRAN = 9371 or 4.1% above DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1409 or 6% above RUT (max observed in last 7 yrs = 21.3%, min = -22.6%)

DJ Transportation Index (proxy for economic conditions 6 to 9 months hence) continues to diverge from SPX. This does not bode well for over all market sentiment.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) moved bi-directionally every single trading day of last week and ending the week in negative territory but RISK is still ON, for now.

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2522 or 2.6% below SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2426 or 6.7% below SPX (max observed in last 7 yrs = 15.2%, min = -14%)

Again, all of our EIGHT DeTrenders are continue to remain POSITIVE while 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 BUY Signal since Friday 9/29/17 CLOSE at 2519
Max SPX 52wk-highs reading last week = 62 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 22 (over 40-60, the local minima is in)
HA_SP1 closed near its +0.5 sigma channels
HA_Momo = -2.3 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

VIX currently stands at 9.14, at about its -2 sigma (remember it's the VIX volatility pattern ( its sigma channels) that matters, and not the level of VIX itself (this is per Dr. Robert Whaley, a great mentor and inventor of original VIX, now called VXO ). VIX usually peaks around a test of its +4 sigma).

Last week, VIX sold off about 4 sigma levels. This shall not stand. We should expect a spike soon.

5-day TRIN & TRINQ Charts

NASDAQ 5-day TRIN is nearing the SELL Zone.

Components of SPX above their respective 200day MA Chart

This scoring indicator continues to put in divergence with SPX, dropping below 70% while SPX and NDX ran up to ATHs. As mentioned here before, this continues to concern us.

SPX SKEW (Tail Risk) Chart

Last week SPX SKEW (Tail Risk) closed at 130.3, or about its -0.5 sigma (normal = 120-125, range 100-150).

Is all quiet on the Eastern & Mid-Western Fronts? Smart Money thinks YES.

3-month VIX Futures Spread(VX) Chart

Our Long NOV17, Short FEB18 Spread trended lower to close at -3.15. Equity markets remain in overbought zone.

HA_SP2 Chart

HA_SP2 = 75.48 (Buy signal <= 25, Sell Signal >= 75)

Our favorite prop indicator back to overbought zone. Note the levels we observed for SP2 since Oct 1st vs SPX (seeing another big divergence here).

US Treasury T-Notes & T-Bonds Yields Chart

Our Treasury Market rallied further and slowly pushed the YTMs lower for T-Notes and T-Bonds. But the front end of the Yield Curve had another up-tick.

Fari Hamzei

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