Proactive Market Timing Archive

Wednesday, September 18, 2019, 0945ET
Market Bias for Issue #306

Our current Market Bias with Timer Digest is LONG SPX as of SEPT 17 at 3005
Our previous Market Bias was FLAT SPX as of SEPT 13 at 3007

Here are the trade parameters for this week:

SPX Secondary Profit Target for last 20% of our position = 3045
SPX Primary Profit Target for first 80% of our position = 3030
SPX BreakEven Stop (Current Price) for last 20% of our position = 2997
SPX Money Management Stop for 100% of our position = 2985

Action Asset Expiration Strike Option

BUY SPY Friday OCT 11 297 Calls

SELL SHORT SPY Friday OCT 11 303 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

Wednesday, September 17, 2019, 0830ET
Market Timing Charts, Analysis & Commentary for Issue #306

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

Most recent S&P-500 Cash Index (SPX) Close: 2978 up +131 (up +4.6%) for the 7 trading days ending on Teusday, September 17, 2019, which closed at its +1 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 = 3043 with WEEKLY +2 Sigma = 3065
Current DAILY 0 Sigma SPX = 2943 with WEEKLY 0 Sigma = 2924
Current DAILY -2 Sigma SPX = 2843 with WEEKLY -2 Sigma = 2783

NYSE McClellan Oscillator = +62.5 (-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 = 60.4 (40 is considered as oversold and 65 as overbought)

Oil markets stabilized after Saudi's ARAMCO managed to ease fears of their potential down time following over the weekend precision and concurrent attacks. Most blame Iran. Overnight, we are hearing that PM Bibi may have orchestrated that right before the general elections over there. But that's just another unsubstantiated rumor.

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

200-Day MA DJ TRAN = 10,249 or 4.5% BELOW DJ TRAN (max observed in last 7 yrs = 20.2%, min = -20.3%)
200-Day MA RUT = 1517 or 4% 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) had a great week but pulled back after the Saudi Oil fields were attacked.

Russell 2000 Small Caps Index (proxy for Risk ON/OFF) ditto here and RISK is slowing coming back in.

DeTrenders Charts for SPX, NDX, TRAN & RUT Indices

50-Day MA SPX = 2950 or 1.9% BELOW SPX (max observed in last 7 yrs = +8.6%, min = -9.3%)
200-Day MA SPX = 2821 or 6.5% BELOW SPX (max observed in last 7 yrs = 15.2%, min = -14%)

ALL of our EIGHT DeTrenders are in the 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, March 8, 2019 CLOSE at 2743
DAILY Timing Model = on a BUY Signal since Tuesday, September 3, 2019 CLOSE at 2906
Max SPX 52wk-highs reading last week = 42 (over 120-140, the local maxima is in)
Max SPX 52wk-Lows reading last week = 10 (over 40-60, the local minima is in)
HA_SP1 closed near its +1.5 sigma channels
HA_Momo = +3.3 (reversals most likely occur above +10 or below -10)

Vol of the Vols Chart

Spot VIX stood at 14.7 on Tuesday night, a tad below 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).

Massive pull back in VIX following the 150 handle SPX rally.

5-day TRIN & TRINQ Charts

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

Components of SPX above their respective 200-day MA Chart

This scoring indicator closed on Tuesday at 74% creating a triple-top or some prefer to call it a head-and-shoulder pattern. Will we see 65% or 85% first? Who knows....

SPX SKEW (Downside Tail Risk) Chart

On Friday, SPX SKEW (Downside Tail Risk) rose pretty sharply then eased off to 117.9, now about its +0.5 sigma (normal = 115, range 100-150).

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

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 SEP19, & short DEEZ19 VIX Futures) hit -1.47 on Friday Close. That is a NEUTRAL signal. But remember, with continued Grumpino's erratic behavior, you never know.

HA_SP2 Chart

HA_SP2 = 72.3 (Buy signal <= 25, Sell Signal >= 75)

Again, we are border-line OverBought reading here.

US Treasury T-Notes & T-Bonds Yields Chart

The Yield Curve (both front and back end) have rallied hard since first of the month. Today we will see what Powell & Co decide in their September FOMC Meeting.

Fari Hamzei