Proactive Market Timing Archive

Monday, March 18, 2019, 1030ET
Market Bias for Issue #284

Our current Market Bias with Timer Digest is SHORT SPX as of MAR 6 at 2771
Our previous Market Bias was LONG SPX as of FEB 22 at 2792

Here are the trade parameters for this week:

SPX Money Management Stop for 100% of our position = 2850
SPX BreakEven Stop (Current Price) for last 20% of our position = 2830
SPX Primary Profit Target for first 80% of our position = 2790
SPX Secondary Profit Target for last 20% of our position = 2770

Action Asset Expiration Strike Option

BUY SPY Friday APR 5 282 Puts

SELL SHORT SPY Friday APR 5 277 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. 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, March 18, 2019, 0700ET
Market Timing Charts, Analysis & Commentary for Issue #284

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

Most recent S&P-500 Cash Index (SPX): 2822 up +79 (up +2.9%) for the week ending on Friday, March 15, 2019, which closed below its +2 sigma.

DJIA ALL TIME INTRADAY HIGH = 26951 (reached on Wednesday, October 3, 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 = 7700 (reached on Thursday, October 1, 2018)
RUT ALL TIME INTRADAY HIGH = 1742 (reached on Friday, August 31, 2018)

Current DAILY +2 Sigma SPX = 2824 with WEEKLY +2 Sigma = 2895
Current DAILY 0 Sigma SPX = 2787 with WEEKLY 0 Sigma = 2679
Current DAILY -2 Sigma SPX = 2750 with WEEKLY -2 Sigma = 2464

NYSE McClellan Oscillator = -34 (-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 = 49.3 (40 is considered as oversold and 65 as overbought)

SPX and NDX had one of their biggest weeks [to the upside} in a long time. We sat this one out.

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

200-Day MA DJ TRAN = 10,539 or 2.2% ABOVE DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1583 or 1.9% 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) had a one great day, Monday and then went sideways.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) did exactly the same -- up big on Monday and then sideways. Is RISK still ON?

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2705 or 4.3% BELOW SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2752 or 2.5% BELOW SPX (max observed in last 7 yrs = 15.2%, min = -14%)

SIX out of EIGHT of our DeTrenders are now in the 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, March 8, 2019 CLOSE at 2743
DAILY Timing Model = on a BUY Signal since Thursday, March 14, 2019 CLOSE at 2808
Max SPX 52wk-highs reading last week = 60 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 1 (over 40-60, the local minima is in)
HA_SP1 closed near its +1.5 sigma channels
HA_Momo = +0.65 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

Spot VIX currently stands at 13.03, 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).

VIX sank to from +4 sigma to -1.5 sigma by Friday. This was a very fast rise for SPX and a big drop (percentage wise) for VIX.

5-day TRIN & TRINQ Charts

Our 5-day TRINs for both NYSE + NASDAQ are in their respective SELL zones.

Components of SPX above their respective 200day MA Chart

This scoring indicator rallied to almost 59% during the past week.

SPX SKEW (Tail Risk) Chart

On Friday, SPX SKEW (Tail Risk) closed near 128.8, now about its +0.5 sigma (normal = 120-125, range 100-150).

All quiet on the Eastern & Mid-Western Fronts? YES, this is according to our beloved HRH Capt Tiko, KCPE....

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 APR19, & short JUL19 VIX Futures) crossed the zero line on Friday and closed at -1.4 which is very NEUTRAL.

HA_SP2 Chart

HA_SP2 = 75.4 (Buy signal <= 25, Sell Signal >= 75)

Our coveted SP2 prop indicator is about to enter its OVERBOUGHT zone.

US Treasury T-Notes & T-Bonds Yields Chart

Both the front + back end of the Yield Curve went nowhere fast. Maury still upset, was last seen roughing it out, at the BH Waldorf Astoria Hotel pool. LOL.

Fari Hamzei