Proactive Market Timing Archive

Monday, August 20, 2018, 0945ET
Market Bias for Issue #254

Our current Market Bias with Timer Digest is LONG SPX as of AUG 15 at 2818
Our previous Market Bias was SHORT SPX as of AUG 09 at 2853

Here are the trade parameters for this week:

SPX Secondary Profit Target for last 20% of our position = 2885
SPX Primary Profit Target for first 80% of our position = 2870
SPX BreakEven Stop (Today's Open) for last 20% of our position = 2854
SPX Money Management Stop for 100% of our position = 2840

Action Asset Expiration Strike Option

BUY SPY Friday SEP 7 286 Calls

SELL SHORT SPY Friday SEP 7 290 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 19th, 2018, 1445ET
Market Timing Charts, Analysis & Commentary for Issue #254

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

Most recent S&P-500 Cash Index (SPX): 2850 up +17 (up +0.6%) for the week ending on Friday, August 17, 2018, which closed about its +1 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 = 7511 (reached on Wednesday, July 25, 2018)
RUT ALL TIME INTRADAY HIGH = 1708 (reached on Tuesday, July 10, 2018)

Current DAILY +2 Sigma SPX = 2866 with WEEKLY +2 Sigma = 2880
Current DAILY 0 Sigma SPX = 2833 with WEEKLY 0 Sigma = 2745
Current DAILY -2 Sigma SPX = 2799 with WEEKLY -2 Sigma = 2610

NYSE McClellan Oscillator = +41 (-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 = 52.1 (40 is considered as oversold and 65 as overbought)

SPX had a key reversal on Wednesday night and we were blessed by @Capt_Tiko for issuing the launch command and we are now up a tad over 50 SPX handles from that low.

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

200-Day MA DJ TRAN = 10,562 or 6.3% below DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1585 or 6.8% 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) is approaching a "breakout" mode, if that comes to fruitarian, then new ATHs are next....stay tuned, sailors.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) had another week of "sausage ops" near its elevated 50 day MA. RISK is still ON and gunning for its new ATHs....so stay tuned.

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2792 or 2.1% below SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2715 or 5% below SPX (max observed in last 7 yrs = 15.2%, min = -14%)

ALL 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 SELL Signal since Monday, August 14, 2018 CLOSE at 2818
Max SPX 52wk-highs reading last week = 38 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 13 (over 40-60, the local minima is in)
HA_SP1 closed just above its +2 sigma channels
HA_Momo = +3.2 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

Spot VIX currently stands at 12.64, right 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 hit 16.86 on Wednesday which corresponds to +4 sigma channels (as you recall from Issue #253, our target was over 15) and then rotated down. Over all it was a small shockwave. More to come? ubetcha (in Palingo) as we approach post Labor Day active markets.

5-day TRIN & TRINQ Charts

Both NYSE & NASDAQ 5-day TRINs are both in BUY zones now.

Components of SPX above their respective 200day MA Chart

This scoring indicator still has not risen above 69% and but we think it has a positive retest failure around 64% area mid-week. If 69 level is punched thru, then the next stop is 72 area.

SPX SKEW (Tail Risk) Chart

On Friday, SPX SKEW (Tail Risk) closed near 146, right about its zero sigma (normal = 120-125, range 100-150).

Is all quiet on the Eastern & Mid-Western Fronts? Our beloved @Capt_Tiko says "maybe."

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 Sep, & short Deez VIX Futures) is at -1.25, closing in its slightly bullish zone.

HA_SP2 Chart

HA_SP2 = 60.7 (Buy signal <= 25, Sell Signal >= 75)

Our coveted SP2 prop indicator dropped to 36 and put in bullish divergence on Wednesday. And as you would have guessed, Capt_Tiko, right there and then, inserted his missile key. Rest is history!!

US Treasury T-Notes & T-Bonds Yields Chart

During this past week, the YTMs for the Notes & Bonds, had another very quiet market. No new shopping on Rodeo Dr this weekend for our beloved Maury & Mrs. Maury.

Fari Hamzei