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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, July 23, 2018, 1130ET
Companion Chart for Market Bias Review, Issue #250

Monday, July 23, 2018, 1125ET
Market Bias for Issue #250

Our current Market Bias with Timer Digest is LONG SPX as of JUL 17 at 2809.55
Our previous Market Bias was SHORT SPX as of JUL 10 at 2793.84

            Here are the trade parameters for this week:

4 SPX Secondary Profit Target for last 20% of our position = 2845
SPX Primary Profit Target for first 80% of our position = 2830
SPX BreakEven Stop (Last Open) for last 20% of our position = 2799
SPX Money Management Stop for 100% of our position = 2790

Action Asset Expiration Strike Option
BUY SPY Friday AUG 10 280 Calls
SELL SHORT SPY Friday AUG 10 284 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, July 22nd, 2018, 1835ET
Market Timing Charts, Analysis & Commentary for Issue #250

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

Most recent S&P-500 Cash Index (SPX): 2801 UNCHG for the week ending on Friday, July 20, 2018, which closed about its +1 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 = 7418 (reached on Tuesday, July 17, 2018)
RUT ALL TIME INTRADAY HIGH = 1708 (reached on Tuesday, July 10, 2018)

Current DAILY +2 Sigma SPX = 2840 with WEEKLY +2 Sigma = 2841
Current DAILY 0 Sigma (20 day MA) SPX = 2762 with WEEKLY 0 Sigma = 2716
Current DAILY -2 Sigma SPX = 2685 with WEEKLY -2 Sigma = 2591

NYSE McClellan Oscillator = -7 (-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 = 50.1 (40 is considered as oversold and 65 as overbought)

We went nowhere fast but did observe a decent amount of intraday volatility in at least 2 days this week. IOHO, This is not good.

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

200-Day MA DJ TRAN = 10,448 or 2.8% below DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1567 or 8.3% 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) attempted to break out the tight wedge we discussed last week and closed above its 50-day MA. Again, we need to keep watching this index. Always a good [big] tell for future market direction.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) had another good week and rallied up most recent ATH. RISK remains ON.

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2751 or 1.8% below SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2688 or 4.2% 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, June 15, 2018 CLOSE at 2779
DAILY Timing Model = on a BUY Signal since Friday, July 6, 2018 CLOSE at 2760
Max SPX 52wk-highs reading last week = 29 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 3 (over 40-60, the local minima is in)
HA_SP1 closed above its +1 sigma channels
HA_Momo = -0.8 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

Spot VIX currently stands at 12.86, just a tad above 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 has started to flatten out (its CI crossed up). Should it trade above 14 (its current zero sigma), IHOO, it will serve as a decent warning for another sharp drop.

5-day TRIN & TRINQ Charts

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

Components of SPX above their respective 200day MA Chart

This scoring indicator, for now, continues to struggle in the mid to low 60 levels. Next targets remain the same: should we take off here, the next level to be tested by this indicator is 66% and then break out to 72% area and then the low 80%s.

SPX SKEW (Tail Risk) Chart

On Friday, SPX SKEW (Tail Risk) closed near 152.7, right about its +2 sigma (normal = 120-125, range 100-150).

Is all quiet on the Eastern & Mid-Western Fronts? Our beloved Capt Tiko barks NO as he reminds us that on Wednesday, due to smart money not buying Grumpino's excuses for his July 16 speaking fiasco at Helsinki, Finland, SPX SKEW went up to within 9 cents of its ATH.

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 AUG, & short NOV VIX Futures) is at -1.75. This is a very NEUTRAL reading.

HA_SP2 Chart

HA_SP2 = 58.7 (Buy signal <= 25, Sell Signal >= 75)

Our coveted SP2 prop indicator rose up on Tuesday and then dropped off by Friday to near NEUTRAL area.

Worth noting here is all three-timeframe StockRSIs are approaching a 'potential' short-term top formation.

US Treasury T-Notes & T-Bonds Yields Chart

During this past week, the YTMs for the Notes & Bonds, were very quiet till Friday, when the short-end dropped and its long-end rose. Maury continues to worry about his future Implied Vig.

Fari Hamzei

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