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Proactive Market Timing
Proactive Market Timing Service

Market Timer: Fari Hamzei

Executive Officer: @Fleet_Adm_Tiko

Editors: Nancy Scott

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Most Recent PMT vs SPX Performance Chart

Monday, October 1, 2018, 0950ET
Companion Chart for Market Bias Review, Issue #260

Monday, October 1, 2018, 0945ET
Market Bias for Issue #260

Our current Market Bias with Timer Digest is LONG SPX as of SEP 28 at 2914
Our previous Market Bias was SHORT SPX as of AUG 27 at 2897

            Here are the trade parameters for this week:

SPX Secondary Profit Target for last 20% of our position = 2960
SPX Primary Profit Target for first 80% of our position = 2940
SPX BreakEven Stop (Today's Open) for last 20% of our position = 2926
SPX Money Management Stop for 100% of our position = 2910

Action Asset Expiration Strike Option
BUY SPY Friday OCT 19 292 Calls
SELL SHORT SPY Friday OCT 19 296 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, October 1, 2018, 0006ET
Notice of Change of Bias with Timer Digest

Dear Jim,

We have a buy signal on 5-day TRIN, a spike in new 52-wk lows, a drop in % of SPX Components over their 200 day MAs and yet SPX 20day MAs were held.

So, we are going LONG SPX for about week, [till the other shoe drops?]
Who knows, may be…..

Fari Hamzei

Sunday, September 30th, 2018, 1345ET
Market Timing Charts, Analysis & Commentary for Issue #260

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

Most recent S&P-500 Cash Index (SPX): 2914 down -15 (down -0.51%) for the week ending on Friday, September 28, 2018, which closed just below its +1 sigma.

DJIA ALL TIME INTRADAY HIGH = 26743 (reached on Friday, September 21, 2018)
DJ TRAN ALL TIME INTRADAY HIGH = 11623 (reached on Friday, September 14, 2018)
SPX ALL TIME INTRADAY HIGH = 2941 (reached on Friday, September 21, 2018)
NDX ALL TIME INTRADAY HIGH = 7691 (reached on Thursday, August 30, 2018)
RUT ALL TIME INTRADAY HIGH = 1742 (reached on Friday, August 31, 2018)

Current DAILY +2 Sigma SPX = 2934 with WEEKLY +2 Sigma = 2939
Current DAILY 0 Sigma SPX = 2902 with WEEKLY 0 Sigma = 2806
Current DAILY -2 Sigma SPX = 2869 with WEEKLY -2 Sigma = 2673

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 = 47.4 (40 is considered as oversold and 65 as overbought)

Another tough week for the market: courtesy of FOMC and the Circus (aka Senate Judiciary Committee) no matter which side one takes. Our beloved Capt Tiko was correct, again !!!

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

200-Day MA DJ TRAN = 10,789 or 5.5% below DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1615 or 5.0% 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) after a huge move on Monday & Tuesday, DJ Trans went nowhere fast.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) sold off hard on FOMC (last Wednesday) and broke its 50day MA. Is RISK still on, we think so (but the KoolAid mix could be under review....LOL).

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2868 or 1.6% below SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2757 or 5.7% below SPX (max observed in last 7 yrs = 15.2%, min = -14%)

SEVEN 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, September 14, 2018 CLOSE at 2872
Max SPX 52wk-highs reading last week = 30 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 18 (over 40-60, the local minima is in)
HA_SP1 closed at its +0.5 sigma channels
HA_Momo = -2.2 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

Spot VIX currently stands at 12.1, right about its -0.5 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 went sideway this past week......look for a test of Spot VIX at 11.

5-day TRIN & TRINQ Charts

NYSE 5-day TRIN is in **uber** OverSold zone while TRINQ (for NASDAQ) is near OverBought.... note: we have never seen this before.

Components of SPX above their respective 200day MA Chart

This scoring indicator had a huge drop to 64% this past week after a huge run-up in the prior week. Was that a Bull Trap? only time will tell.

SPX SKEW (Tail Risk) Chart

On Friday, SPX SKEW (Tail Risk) closed near 144.8, a tad below its zero sigma (normal = 120-125, range 100-150).

Is all quiet on the Eastern & Mid-Western Fronts? Our beloved @Capt_Tiko said "maybe...." last week, but by Friday close, after a two sigma run-up, now says: all bets are off. Go figure (reminder: note his track record first before any actionable trade)!!

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 OCT18, & short JAN19 VIX Futures) closed at -1.71. This reading remains in NEUTRAL zone.

HA_SP2 Chart

HA_SP2 = 53.9 (Buy signal <= 25, Sell Signal >= 75)

Our coveted SP2 prop indicator has now entered its NEUTRAL zone after a huge drop midweek (post FOMC).

US Treasury T-Notes & T-Bonds Yields Chart

This past week all YTMs pulled back after 5 & 10 yr T-Notes hit their 7-yr highs (which we have highlighted here for months now).

Fari Hamzei

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