Proactive Market Timing Archive

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

Friday, June 21, 2019, 0039ET
Notice of Change of Bias with Timer Digest

Dear Jim,

After looking at charts and calendar every which way, as of this writing, we are NOT comfortable staying LONG SPX tomorrow...

Here is why:

a. Our prop SP2 Indicator closed today way over 90 (75 & higher is overbought)
b. Today was third day of a strong move up – everybody & his brother is LONG here -- in retrospect, we now realize we jumped to long side a tad late. Oh, well.
c. SPX closed at a new all time highs (marginally)
d. Friday is June OX (options expirations)
e. Friday is Summer Solstice (history has shown that Solstices and Equinoxes often mark unusal market activity that could lead to moderate reversals)

Given all of the above, we are NOT prepared to SHORT here, either.

So the best (risk-adjusted) decision, in our humble opinion, is to go FLAT for a day or two.

Have a great weekend……….

Fari Hamzei

Wednesday, June 19, 2019, 1538ET
Notice of Change of Bias with Timer Digest

Dear Jim,

FOMC voted not to lower interest rates but SPX & NDX edged higher thus disproving our FOMC price action expectations.

We are reversing our SHORT bias & going LONG SPX at the Close for 1.5% loss………… Cheers

Fari Hamzei

Tuesday, June 18, 2019, 1045ET
Companion Chart for Market Bias Review, Issue #295

Tuesday, June 18, 2019, 1040ET
Market Bias for Issue #295

Our current Market Bias with Timer Digest is SHORT SPX as of Jun 11 at 2885
Our previous Market Bias was FLAT SPX as of Jun 7 at 2873

Here are the trade parameters for this week:

SPX Money Management Stop for 100% of our position = 2955
SPX BreakEven Stop (Current Price) for last 20% of our position = 2926
SPX Primary Profit Target for first 80% of our position = 2875
SPX Secondary Profit Target for last 20% of our position = 2855

Action Asset Expiration Strike Option

BUY SPY Friday JUL 5 293 Puts

SELL SHORT SPY Friday JUL 5 287 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

Sunday, June 16, 2019, 2230ET
Market Timing Charts, Analysis & Commentary for Issue #295

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

Most recent S&P-500 Cash Index (SPX): 2887 up 14 (up +0.5%) 2887 for the week ending on Friday, June 14, 2019, which closed near its +1 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 = 2954 (reached on Wednesday, May 1, 2019)
NDX ALL TIME INTRADAY HIGH = 7852 (reached on Wednesday, May 1, 2019)
RUT ALL TIME INTRADAY HIGH = 1742 (reached on Friday, August 31, 2018)

Current DAILY +2 Sigma SPX = 2924 with WEEKLY +2 Sigma = 2974
Current DAILY 0 Sigma SPX = 2836 with WEEKLY 0 Sigma = 2833
Current DAILY -2 Sigma SPX = 2748 with WEEKLY -2 Sigma = 2692

NYSE McClellan Oscillator = +54 (-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 = 60.8 (40 is considered as oversold and 65 as overbought)

This past week, we went nowhere fast.........ROMANs were at the Gates, almost every day. Oh well.....

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

200-Day MA DJ TRAN = 10,416 or 1.1% ABOVE DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1541 or 1.3 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) also went nowhere fast. more tea?

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) same story here and yes, RISK is still OFF.....

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2874 or 0.5% BELOW SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2775 or 4% BELOW SPX (max observed in last 7 yrs = 15.2%, min = -14%)

FIVE of our EIGHT DeTrenders are in the NEGATIVE 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 Friday, June 7, 2019 CLOSE at 2873
Max SPX 52wk-highs reading last week = 62 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 2 (over 40-60, the local minima is in)
HA_SP1 closed near its +1.5 sigma channels
HA_Momo = +3.1 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

Spot VIX stood at 15.3 Friday night, at about its zero 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).

Vols of the Vols continue collapse. Keep your bet size in check. Long hot Summer days are here. Go to the Beach & switch to iced tea or mint julep.

5-day TRIN & TRINQ Charts

Both NYSE 5-day TRIN & NASDAQ 5-day TRINQ are in the NEUTRAL zone.

Components of SPX above their respective 200-day MA Chart

This scoring indicator stayred near 63% for most of the week. No signal here for now.

SPX SKEW (Tail Risk) Chart

On Friday, SPX SKEW (Tail Risk) closed near 113.3, now about its -1 sigma (normal = 115, 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 JUL19, & short OCT19 VIX Futures) hit -0.65 on Friday Close. No signal here.

HA_SP2 Chart

HA_SP2 = 70.5 (Buy signal <= 25, Sell Signal >= 75)

Are we in a topping formation? we think so but stock up on iced tea, per HRH @Capt_Tiko.

US Treasury T-Notes & T-Bonds Yields Chart

Last week the front end of yield curve again sank much faster than the long end. Maury & Grumpino (plus Trumpkins) are very upset as the rally in front end prices + decrease in crude oil prices signal a massive global economy slowdown.

Fari Hamzei

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