Proactive Market Timing Archive

Monday, June 11, 2018, 0955ET
Market Bias for Issue #244

Our current Market Bias with Timer Digest is LONG SPX as of JUN 1 at 2734.62
Our previous Market Bias was SHORT SPX as of MAY 22 at 2724.44

Here are the trade parameters for this week:

SPX Secondary Profit Target for last 20% of our position = 2820
SPX Primary Profit Target for first 80% of our position = 2805
SPX BreakEven Stop (Last Open) for last 20% of our position = 2780
SPX Money Management Stop for 100% of our position = 2760

Action Asset Expiration Strike Option

BUY SPY Friday JUN 29 278 Calls

SELL SHORT SPY Friday JUN 29 282 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, June 10, 2018, 1845ET
Market Timing Charts, Analysis & Commentary for Issue #244

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

Most recent S&P-500 Cash Index (SPX): 2779 up +45 (up +1.65%) for the week ending on Friday, June 8, 2018, which closed a tad above its +2 sigma.

DJIA ALL TIME INTRADAY HIGH = 26617 (reached on Friday, January 26, 2018)
TRAN ALL TIME INTRADAY HIGH = 11424 (reached on Tuesday, January 16, 2018)
SPX ALL TIME INTRADAY HIGH = 2873 (reached on Friday, January 26, 2018)
NDX ALL TIME INTRADAY HIGH = 7212 (reached on Wednesday, June 6, 2018)
RUT ALL TIME INTRADAY HIGH = 1680 (reached on Thursday, June 7, 2018)

Current DAILY +2 Sigma SPX = 2776 with WEEKLY +2 Sigma = 2842
Current DAILY 0 Sigma (20 day MA) SPX = 2732 with WEEKLY 0 Sigma = 2707
Current DAILY -2 Sigma SPX = 2688 with WEEKLY -2 Sigma = 2571

NYSE McClellan Oscillator = +103 (-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 = 57.9 (40 is considered as oversold and 65 as overbought)

This past week we witnessed a very nice run-up in DJIA, SPX, NDX & RUT Indices. Shorts got their clocked cleaned, one more time. Cheers. @Capt_Tiko likes that.

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

200-Day MA DJ TRAN = 10,280 or 6.4% below DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1530 or 9.3% 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) is getting ready to start a classic breakout. Keep DJ TRAN on your watch list this coming week.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) had another great week to the upside & logged a new ATH on Thursday. RISK is definitely ON.

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2687 or 3.4% below SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2647 or 5% 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, April 6, 2018 CLOSE at 2604
DAILY Timing Model = on a BUY Signal since Wednesday, June 6, 2018 CLOSE at 2749
Max SPX 52wk-highs reading last week = 54 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 10 (over 40-60, the local minima is in)
HA_SP1 closed almost at its +3 sigma channels
HA_Momo = +4.67 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

VIX currently stands at 12.18, just 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).

VIX attempted to spike twice this past week only to give up most of its up moves. We also saw a good drop in Crude Vol.

5-day TRIN & TRINQ Charts

While NYSE 5-day TRIN is in the NEUTRAL zone and heading for a SELL signal, its NASDAQ brethren, 5-day TRINQ, is nearing a SELL zone.

Components of SPX above their respective 200day MA Chart

This scoring indicator ended up a tad below 65% level, its next target will be in 68% to 72% area. This is another index we need to monitor each day this coming week.

SPX SKEW (Tail Risk) Chart

On Friday, SPX SKEW (Tail Risk) closed near 133.1, a tad below its zero sigma (normal = 120-125, range 100-150).

Is all quiet on the Eastern & Mid-Western Fronts? Again, YES for now.

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, (long June, & short Sept VIX Futures) is at -1.96. The signal here remains NEUTRAL.

HA_SP2 Chart

HA_SP2 = 77 (Buy signal <= 25, Sell Signal >= 75)

This coveted prop indicator is now in OVERBOUGHT zone.

US Treasury T-Notes & T-Bonds Yields Chart

This past week, the Notes & Bonds went nowhere fast. The Maurys are not shopping for now. The Vig is under pressure. LOL.

Fari Hamzei