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Proactive Market Timing
 
Proactive Market Timing Service

Market Timer: Fari Hamzei

Executive Officer: @Admiral_Tiko

Editors: Capt. Stephanie Alexander & Nancy Scott

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

PMT Archives   Current PMT Issue

Most Recent PMT vs SPX Performance Chart

Tuesday, January 16, 2018, 1000ET
Companion Chart for Market Bias Review, Issue #224

Tuesday, January 16, 2018, 0955ET
Market Bias for Issue #224

Our current Market Bias with Timer Digest is SHORT SPX as of Tuesday DEC 19 at 2681.47
Our previous Market Bias was NEUTRAL SPX as of Friday DEC 15 at 2675.81


            Here are the trade parameters for this week:

SPX Money Management Stop for 100% of our position = 2820
SPX BreakEven Stop (Last Open) for last 20% of our position = 2799
SPX Primary Profit Target for first 80% of our position = 2770
SPX Secondary Profit Target for last 20% of our position = 2755


Action Asset Expiration Strike Option
BUY SPY Friday FEB 9 279 Puts
SELL SHORT SPY Friday FEB 9 275 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

Monday, January 15, 2018, 2230ET
Market Timing Charts, Analysis & Commentary for Issue #224


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

Most recent S&P-500 Cash Index (SPX): 2786.24 up +43.09 (up 1.57%) for the week ending on Friday, January 12, 2018, which closed above its +2 sigma.

SPX ALL TIME INTRADAY HIGH = 2787.85 (reached on Friday, Jan 12, 2018)
SPX ALL TIME CLOSING HIGH = 2786.25 (reached on Friday, Jan 12, 2018)

Current DAILY +2 Sigma SPX = 2780 with WEEKLY +2 Sigma = 2766
Current DAILY 0 Sigma (20 day MA) SPX = 2707 with WEEKLY 0 Sigma = 2596
Current DAILY -2 Sigma SPX = 2634 with WEEKLY -2 Sigma = 2426

NYSE McClellan Oscillator = +51 (-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 = 55(40 is considered as oversold and 65 as overbought)

We are overbought, some even argue extremely overbought. This is NOT the place to get long but being short has been costly even with defined risk (put spreads).



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

200-Day MA DJ TRAN = 9600 or 18.5% above DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1444 or 10.2% 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) again rallied pretty hard and now getting close to be stretched out by historical standards.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) also had a strong week and put in multiple ATH. RISK continues to be ON.



DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2648 or 5.2% below SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2499 or 11.5% below SPX (max observed in last 7 yrs = 15.2%, min = -14%)

All of our EIGHT DeTrenders are in POSITIVE territory. 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 Wednesday 1/3/18 CLOSE at 2713
Max SPX 52wk-highs reading last week = 163 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 11 (over 40-60, the local minima is in)
HA_SP1 closed over its +2 sigma channels
HA_Momo = +3.9 (reversals most likely occur above +10 or below -10)



Vol of the Vols Chart

VIX currently stands at 10.16, at about its +1 sigma (remember it's the VIX volatility pattern aka "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).



5-day TRIN & TRINQ Charts

NYSE 5-day TRIN is giving a SELL Signal while TRINQ gave one on Jan 8th.



Components of SPX above their respective 200day MA Chart

This scoring indicator is hovering at 80.0 and continue to form early divergences with price (SPX).



SPX SKEW (Tail Risk) Chart

Last week SPX SKEW (Tail Risk) closed at ~125, or about its -2 sigma (normal = 120-125, range 100-150).

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


How to interpret the value of SPX SKEW? (from CBOE white paper on SKEW)



3-month VIX Futures Spread(VX) Chart

This popular timing indicator, now long Feb, short May VIX Futures closed at -1.8. Equity markets, as far as this indicator is concerned, continue to be slightly overbought.



HA_SP2 Chart

HA_SP2 = 92.4 (Buy signal <= 25, Sell Signal >= 75)

This coveted timing indicator says we are in very overbought zone now (but we know from recent history that we can stay in OB until we don't).



US Treasury T-Notes & T-Bonds Yields Chart

During this past week, the Treasury Curve sold off as the YTMs rose while Dollar Index sold off to a 3-yr low.

Fari Hamzei




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