Proactive Market Timing Archive

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

Thursday, June 29, 2018, 1600ET
Notice of Change of Bias with Timer Digest

Dear Jim,

We saw a short-term FLUSH (lower low) as Europe closed today.

We are getting LONG SPX as of the Close tonight……

Fari Hamzei

Monday, June 25, 2018, 2100ET
Market Commentary

While a number of our Market Timing Charts showed various conditions of an oversold market in the H-Hour (last hour of regular trading) today, the internal data post Close is a bit of a mix bag. While we could see a dead-cat bounce tomorrow, our feeling is that this move is only about 70% to 75% done and we should see further weakness into Q2 Close on Friday. We really need to observe SPX test its then -3 sigma (now at 2673), or its then 200-day MA (now at 2664), whichever comes first.

So, for one or two more days, we shall stay SHORT SPX and then recaliberate……

Fari Hamzei

Monday, June 25, 2018, 0950ET
Companion Chart for Market Bias Review, Issue #246

Monday, June 25, 2018, 0945ET
Market Bias for Issue #246

Our current Market Bias with Timer Digest is SHORT SPX as of JUN 18 at 2773.75
Our previous Market Bias was LONG SPX as of JUN 1 at 2734.62

Here are the trade parameters for this week:

SPX Money Management Stop for 100% of our position = 2755
SPX BreakEven Stop (Last Open) for last 20% of our position = 2742
SPX Primary Profit Target for first 80% of our position = 2715
SPX Secondary Profit Target for last 20% of our position = 2700

Action Asset Expiration Strike Option

BUY SPY Friday JUL 13 272 Puts

SELL SHORT SPY Friday JUL 13 267 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 24, 2018, 1830ET
Market Timing Charts, Analysis & Commentary for Issue #246

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

Most recent S&P-500 Cash Index (SPX): 2755 down -24 (down -0.86%) for the week ending on Friday, June 22, 2018, which closed about its zero 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 = 7310 (reached on Wednesday, June 20, 2018)
RUT ALL TIME INTRADAY HIGH = 1708 (reached on Wednesday, June 20, 2018)

Current DAILY +2 Sigma SPX = 2809 with WEEKLY +2 Sigma = 2818
Current DAILY 0 Sigma (20 day MA) SPX = 2755 with WEEKLY 0 Sigma = 2702
Current DAILY -2 Sigma SPX = 2701 with WEEKLY -2 Sigma = 2585

NYSE McClellan Oscillator = -22 (-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 = 48.8 (40 is considered as oversold and 65 as overbought)

This past week we saw one good directional day (Thursday) but rest was just more intraday volatility. The [bearish] divergences we talked about last week started to have a minor impact (DJIA broke its 9 days in a row of negative closes on Friday).

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

200-Day MA DJ TRAN = 10,367 or 3.9% below DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1545 or 9% 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) sold 4 out of 5 trading days of last week.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) after putting another new high on Wednesday, sold hard on Thursday and retreated a tad on Friday (ahead of its annual reblancing). RISK is still ON.

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2714 or 1.5% below SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2663 or 3.4% below SPX (max observed in last 7 yrs = 15.2%, min = -14%)

All EIGHT of our DeTrenders remain 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 SELL Signal since Tuesday, June 19, 2018 CLOSE at 2763
Max SPX 52wk-highs reading last week = 27 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 11 (over 40-60, the local minima is in)
HA_SP1 closed near its zero sigma channels
HA_Momo = -2.43 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

VIX currently stands at 13.77, just 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).

Trading in VIX [derivatives] was a tad better than last week (dead money). The big move was in Crude Vol ($OVX).

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 dropped further and closed at 60% level. Its next target will be in 55% on the downside or 66% on the upside. This could be a good tell this week.

SPX SKEW (Tail Risk) Chart

On Friday, SPX SKEW (Tail Risk) closed near 140.5, right about its +1 sigma (normal = 120-125, range 100-150).

Is all quiet on the Eastern & Mid-Western Fronts? Again, YES for now.

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 July, & short Oct VIX Futures) is at -1.55. The signal here remains NEUTRAL.

HA_SP2 Chart

HA_SP2 = 37.9 (Buy signal <= 25, Sell Signal >= 75)

This coveted prop indicator went down to 29.6 on Thursday and went back up to 37.9 on Friday. It is still near the oversold zone. We need to watch this carefully this week.

US Treasury T-Notes & T-Bonds Yields Chart

This past week, again the Notes & Bonds went nowhere fast. Maury & Co. are getting worried about their Implied Vig.

Fari Hamzei

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