Proactive Market Timing Archive

Tuesday, August 13, 2019, 0940ET
Market Bias for Issue #302

Our current Market Bias with Timer Digest is LONG SPX as of JUL 30 at 3013
Our previous Market Bias was FLAT SPX as of JUL 23 at 3005

Here are the trade parameters for this week:

SPX Secondary Profit Target for last 20% of our position = 2965
SPX Primary Profit Target for first 80% of our position = 2940
SPX BreakEven Stop (Current Price) for last 20% of our position = 2895
SPX Money Management Stop for 100% of our position = 2870

Action Asset Expiration Strike Option

BUY SPY Friday SEP 6 289 Calls

SELL SHORT SPY Friday SEP 6 295 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, August 11, 2019, 2245ET
Market Timing Charts, Analysis & Commentary for Issue #302

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

Most recent S&P-500 Cash Index (SPX) Close: 2919 up +74 (up +2.6%) for the four days ending on Friday, August 9, 2019, which closed a tad above its -2 sigma.

DJIA ALL TIME INTRADAY HIGH = 27398 (reached on Tuesday, July 16, 2019)
DJT ALL TIME INTRADAY HIGH = 11623 (reached on Friday, September 14, 2018)
SPX ALL TIME INTRADAY HIGH = 3028 (reached on Friday, July 26, 2019)
NDX ALL TIME INTRADAY HIGH = 8027 (reached on Friday, July 26, 2019)
RUT ALL TIME INTRADAY HIGH = 1742 (reached on Friday, August 31, 2018)

Current DAILY +2 Sigma SPX = 3072 with WEEKLY +2 Sigma = 3042
Current DAILY 0 Sigma SPX = 2969 with WEEKLY 0 Sigma = 2913
Current DAILY -2 Sigma SPX = 2866 with WEEKLY -2 Sigma = 2783

NYSE McClellan Oscillator = -80 (-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 = 45.1 (40 is considered as oversold and 65 as overbought)

Well, we came back up with a roar as we were very oversold till Uber reported after the Close of Thursday causing NASDAQ futures to take a huge retreat overnight.

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

200-Day MA DJ TRAN = 10,271 or 0.6% ABOVE DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1513 or 0.4% 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) struggled to stabilize around its 200 day MA.

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

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2936 or 0.6% ABOVE SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2792 or 4.5% BELOW SPX (max observed in last 7 yrs = 15.2%, min = -14%)

Again, SIX of our EIGHT DeTrenders are in the NEGTIVE 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 SELL Signal since Friday, August 2, 2019 CLOSE at 2932
Max SPX 52wk-highs reading last week = 47 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 32 (over 40-60, the local minima is in)
HA_SP1 closed near its -1 sigma channels
HA_Momo = -3.6 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

Spot VIX stood at 18 on Friday night, 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).

As expected last week was a local minima. We now have the confirmation.

5-day TRIN & TRINQ Charts

NYSE 5-day TRIN is in the NEUTRAL-BUY zone while NASDAQ 5-day TRINQ is near the SELL zone.

Components of SPX above their respective 200-day MA Chart

This scoring indicator bounced from 57% to 64% and then came down to retest 60%......We need to keep a close eye on this during the next weeks.

SPX SKEW (Tail Risk) Chart

On Friday, SPX SKEW (Tail Risk) rose pretty sharply to 116.3, now about its -1 sigma (normal = 115, range 100-150).

All quiet on the Eastern & Mid-Western Fronts? our beloved HRH Capt. Tiko, KCPE, still says NOPE.

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 for identifying tradable bottoms, (now long AUG19, & short NOV19 VIX Futures) hit +0.60 on Friday Close. That is a very NEUTRAL signal.

HA_SP2 Chart

HA_SP2 = 46.2 (Buy signal <= 25, Sell Signal >= 75)

This is a NEUTRAL reading here.

US Treasury T-Notes & T-Bonds Yields Chart

Well, our YTMs continued to get flushed, and yes, our beloved Maury continued to rough it out at the pool side of BH Waldorf-Astoria overlooking LA Country Club (he is not welcome there either, albeit for totally different reason), while the wife went on to enjoy her 7K sq, 12+ MM BH Flat mansion all by herself and did some more shoe shopping on Rodeo Dr.

Fari Hamzei