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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

Wednesday, May 16, 2018, 1005ET
UPDATED Companion Chart for Market Bias Review, Issue #240

Wednesday, May 16, 2018, 1000ET
UPDATED Market Bias for Issue #240

Our current Market Bias with Timer Digest is LONG SPX as of Friday MAR 23 at 2588.26
Our previous Market Bias was SHORT SPX as of MAR 16 at 2752.01


            Here are the trade parameters for this week:

SPX Secondary Profit Target for last 20% of our position = 2765
SPX Primary Profit Target for first 80% of our position = 2740
SPX BreakEven Stop (Last Open) for last 20% of our position = 2712
SPX Money Management Stop for 100% of our position = 2700


Action Asset Expiration Strike Option
BUY SPY Friday JUN 8 272 Calls
SELL SHORT SPY Friday JUN 8 277 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. The following trading day, we will issue new SPX targets and a new SPY options trade, as long our new market bias with Timer Digest is NOT flat.

Fari Hamzei

Monday, May 14, 2018, 1030ET
Companion Chart for Market Bias Review, Issue #240

Monday, May 14, 2018, 1025ET
Market Bias for Issue #240

Our current Market Bias with Timer Digest is LONG SPX as of Friday MAR 23 at 2588.26
Our previous Market Bias was SHORT SPX as of MAR 16 at 2752.01


            Here are the trade parameters for this week:

SPX Secondary Profit Target for last 20% of our position = 2785
SPX Primary Profit Target for first 80% of our position = 2770
SPX BreakEven Stop (Last Open) for last 20% of our position = 2733
SPX Money Management Stop for 100% of our position = 2725


Action Asset Expiration Strike Option
BUY SPY Friday JUN 8 274 Calls
SELL SHORT SPY Friday JUN 8 280 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. The following trading day, we will issue new SPX targets and a new SPY options trade, as long our new market bias with Timer Digest is NOT flat.

Fari Hamzei

Sunday, May 13, 2018, 2200ET
Market Timing Charts, Analysis & Commentary for Issue #240


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

Most recent S&P-500 Cash Index (SPX): 2727.72 up +64.30 (up +2.4%) for the week ending on Friday, May 11, 2018, which closed just below its +2 sigma.

SPX ALL TIME INTRADAY HIGH = 2872.87 (reached on Friday, Jan 26, 2018)
SPX ALL TIME CLOSING HIGH = 2872.87 (reached on Friday, Jan 26, 2018)

Current DAILY +2 Sigma SPX = 2730 with WEEKLY +2 Sigma = 2855
Current DAILY 0 Sigma (20 day MA) SPX = 2673 with WEEKLY 0 Sigma = 2710
Current DAILY -2 Sigma SPX = 2617 with WEEKLY -2 Sigma = 2565

NYSE McClellan Oscillator = +120.5 (-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 = 55.9 (40 is considered as oversold and 65 as overbought)

Speaking of shorts getting their clocks cleaned, Chicago-style, all of the sudden, by middle of last week, we heard nothing more from the perma-bears out there. Not even a peep. Bye Bye Shorts? History points otherwise. They are just hibernating for now, @Capt_Tiko reminds us while reading Rumi & having his tea.



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

200-Day MA DJ TRAN = 10,130 or 5.8% below DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1508 or 6.5% below RUT (max observed in last 7 yrs = 21.3%, min = -22.6%)

DJ Transportation Index (proxy for economic conditions 6 to 9 months hence) rallied hard this weeks (its second best week in 2018). Watch for a test of 10,770 on closing basis.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) had another great week and should put in new ATHs (first time since Jan '18). RISK is UBER ON.



DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2677 or 1.9% below SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2621 or 4% below SPX (max observed in last 7 yrs = 15.2%, min = -14%)

All EIGHT of our EIGHT DeTrenders remain 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 SELL Signal since Friday 4/06/118 CLOSE at 2604
DAILY Timing Model = on a BUY Signal since Wednesday 5/9/18 CLOSE at 2697
Max SPX 52wk-highs reading last week = 39 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 13 (over 40-60, the local minima is in)
HA_SP1 again closed at its +2.5 sigma channels
HA_Momo = +5.6 (reversals most likely occur above +10 or below -10)



Vol of the Vols Chart

VIX currently stands at 12.65, again just about its -2 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).

Lower Low Vols are back. @Capt_Tiko, watching the VX Futures Contango, for better part of two weeks ago and early this past week, got him a tad excited. He is back to sipping on his tea and reading Rumi again.



5-day TRIN & TRINQ Charts

Both NYSE & NASDAQ 5-day TRINs are in the SELL zone.



Components of SPX above their respective 200day MA Chart

This scoring indicator looks a lot healthier after double testing the 50% level and then multiple restests of 55% level in April and May. But, we are not out of the woods till we get to 70s.



SPX SKEW (Tail Risk) Chart

On Monday, SPX SKEW (Tail Risk) closed near 129, or near its zero sigma (normal = 120-125, range 100-150).

Is all quiet on the Eastern & Mid-Western Fronts? Smart Money says YES, and pretty much has convinced our @Capt_Tiko that water is not that cold any more and he should step in, at least knee high.


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 June, and short September VIX Futures near -1.5. Is the bottom in? @Capt_Tiko says "YES, we told you so two weeks ago."



HA_SP2 Chart

HA_SP2 = 83 (Buy signal <= 25, Sell Signal >= 75)

This coveted prop indicator is now overbought. What's next? Well, topping formation can take time and the $64K question becomes what is the catalyst for a pull-back? And a lot of that depends who you talk to.



US Treasury T-Notes & T-Bonds Yields Chart

Our beloved Maury is finally doing cartwheels. That should sum up the state of affairs of our Bond Market.

Fari Hamzei




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Chat with Fari on TradeStation.com Fari Hamzei writes for CBOE Options Hub on event-deriven basis       Futures & Options for Stock Indices
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