Proactive Market Timing Archive

Tuesday, September 4, 2018, 0955ET
Market Bias for Issue #256

Our current Market Bias with Timer Digest is SHORT SPX as of AUG 27 at 2897
Our previous Market Bias was FLAT SPX as of AUG 21 at 2862

Here are the trade parameters for this week:

SPX Money Management Stop for 100% of our position = 2905
SPX BreakEven Stop (Today's Open) for last 20% of our position = 2897
SPX Primary Profit Target for first 80% of our position = 2865
SPX Secondary Profit Target for last 20% of our position = 2840

Action Asset Expiration Strike Option

BUY SPY Friday SEP 21 288 Puts

SELL SHORT SPY Friday SEP 21 283 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, September 2nd, 2018, 1600ET
Market Timing Charts, Analysis & Commentary for Issue #256

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

Most recent S&P-500 Cash Index (SPX): 2902 up +28 (up +0.97%) for the week ending on Friday, August 31, 2018, which closed about its +1.5 sigma.

DJIA ALL TIME INTRADAY HIGH = 26617 (reached on Friday, January 26, 2018)
TRAN ALL TIME INTRADAY HIGH = 11475 (reached on Tuesday, August 28, 2018)
SPX ALL TIME INTRADAY HIGH = 2916 (reached on Wednesday, August 29, 2018)
NDX ALL TIME INTRADAY HIGH = 7691 (reached on Thursday, August 30, 2018)
RUT ALL TIME INTRADAY HIGH = 1742 (reached on Friday, August 31, 2018)

Current DAILY +2 Sigma SPX = 2917 with WEEKLY +2 Sigma = 2906
Current DAILY 0 Sigma SPX = 2862 with WEEKLY 0 Sigma = 2771
Current DAILY -2 Sigma SPX = 2809 with WEEKLY -2 Sigma = 2636

NYSE McClellan Oscillator = +4 (-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 = 54.4 (40 is considered as oversold and 65 as overbought)

In the last two weeks, all major indices have put in new ATHs....... Cheers!!

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

200-Day MA DJ TRAN = 10,648 or 6.2% below DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1597 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) again put in a new all-time high(ATH) on Tuesday but sold off for the rest of the week.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) made three new ATHs last week and closed near 1741. RISK is ON again.

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2814 or 3.1% below SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2730 or 6.3% 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 BUY Signal since Tuesday, August 21, 2018 CLOSE at 2863
Max SPX 52wk-highs reading last week = 62 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 4 (over 40-60, the local minima is in)
HA_SP1 closed just below its +1 sigma channels
HA_Momo = zero (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

Spot VIX currently stands at 12.2, right about its -0.5 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 was uber quiet this past week except on Tuesday.

5-day TRIN & TRINQ Charts

Both NYSE 5-day TRIN & TRINQ (for NASDAQ) continue to remain in NEUTRAL & SELL zones, respectively.

Components of SPX above their respective 200day MA Chart

On Wednesday, this scoring indicator rose to 72% but failed to hold it.

SPX SKEW (Tail Risk) Chart

On Friday, SPX SKEW (Tail Risk) closed near 147, a tad lower from its +1 sigma (normal = 120-125, range 100-150).

Is all quiet on the Eastern & Mid-Western Fronts? Our beloved @Capt_Tiko still 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 -1.77. This reading is NEUTRAL.

HA_SP2 Chart

HA_SP2 = 69 (Buy signal <= 25, Sell Signal >= 75)

Our coveted SP2 prop indicator rallied on Wednesday to almost 88 but closed the week almost 20 pts lower.

US Treasury T-Notes & T-Bonds Yields Chart

During this past week, the YTMs for the Notes & Bonds, upticked on Tuesday and Wednesday but then closed lower. Mrs Maury has to change her Rodeo Drive spending habits otherwise our beloved Maury is waist deep in trouble.

Fari Hamzei