TED Target reached: Increasing short positions.
Here we go again.
On September 28 I stated the following:
The TED Spread which measures the general risk in the economy has been rising the last couple of weeks. today alone it rose 5.42% which means interbank loans are now riskier. This is still not significant enough and I would like to see another 33% increase in the TED before I really put a lot of my sidelined money on the short side.
On the 28th TED was at around 0.195 so a 33% move would put the TED at around 0.26 and today TED closed at 0.262 which satisfies my reasoning for going short.
On October 27th TED was in an Ascending Channel and also stated that a higher TED spread would mean that a major market correction is underway as banks are raising loan rates between eachother. Rising rates means there will be some major trouble in at least the financial sector which allocates 15% of the S&P Index.
Here is the latest Chart of the TED showing the channel that has been broken. (Click To Enlarge)
Another Blogger has picked up on the TED and here is Daneric's TED Chart.
Finally keep in mind that the current TED is still far below the average TED which is at around 0.50 (50 basis points). We're halfway there and its good to catch onto this risk indicator before CNBC does.
I will add shorts via options and inverse ETF's very soon but always use my opinions as a viewpoint and not investment advice. Everyone has different risk tolerances.
Happy Trading, K
8-20-2009.. another repeat of 7-13-2009 ?
If you have been following my current picks page you might have noticed that most of the symbols received buy signals on 7-13-2009 which is when the March rally was coming to a correction but then bounced. Will we have another case of this with 8-20-2009?
I was hoping we wouldn't that is why I posted those charts yesterday thinking we had topped. Well my automated strategy was saying otherwise and I completely Ignored it.
Normally I would just update the current picks page but this time around I have decided to make a blog post.
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Market Indices and other important Quotes
(Note: I understand you can’t purchase an index so bear with me these are just signals)
|
Symbol |
Buy Date |
Sell Date |
|
$SPX |
8-20-2009 |
|
|
$INDU |
8-20-2009 |
|
|
$COMPX |
8-20-2009 |
|
|
QQQQ |
8-20-2009 |
|
|
IWM |
8-20-2009 |
|
|
SPY |
8-20-2009 |
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Rest of the Symbols (More will be added per request)
|
Symbol |
Buy Date |
Sell Date |
|
IYR |
8-21-2009 |
|
|
AAPL |
8-20-2009 |
|
|
DRYS |
8-14-2009 |
|
|
SDS |
8-20-2009 |
|
|
SRS |
8-20-2009 |
|
|
SSO |
8-20-2009 |
|
|
SKF |
8-20-2009 |
|
|
UYG |
8-20-2009 |
|
|
URE |
8-21-2009 |
|
|
JNK |
8-21-2009 |
|
|
HYG |
8-7-2009 |
|
|
REW |
8-20-2009 |
|
|
QID |
|
8-20-2009 |
|
QLD |
8-20-2009 |
|
|
XLF |
8-20-2009 |
|
|
DIG |
8-20-2009 |
|
|
DUG |
8-20-2009 |
|
|
SMN |
|
8-20-2009 |
|
VXX |
|
8-19-2009 |
The VIX ETF signaled a sell before the rest of the signals came in the following day. That is interesting.
-K
Stock Alerts of the Week May 11 – May 15 2009
WoW what a sea of sell signals there was this week. This is the longest sell list I have seen.
Of Course this meant BUY for the short ETF's which you will see below with exception to ICE (not a short ETF) which seems to be in its own little world up in the ICE(y) north pole.
Picks of the week of May 11th to May 15th 2009
|
Symbol |
Buy Date |
Buy Price |
Sell Date |
Sell Price |
|
$SPX |
5-13-2009 |
905.40 |
||
|
$INDU |
5-13-2009 |
8461.88 |
||
|
$COMPX |
5-12-2009 |
1743.52 |
||
|
IWM |
5-12-2009 |
50.82 |
||
|
SPY |
5-13-2009 |
90.01 |
||
|
IYR |
5-12-2009 |
34.00 |
||
|
AAPL |
5-12-2009 |
129.71 |
||
|
BBT |
5-11-2009 |
25.02 |
||
|
BCS |
5-12-2009 |
16.87 |
||
|
BAC |
5-13-2009 |
11.95 |
||
|
ICE |
5-12-2009 |
93.28 |
|
|
|
ING |
5-13-2009 |
9.56 |
||
|
FAZ |
|
5-14-2009 |
5.81 |
|
|
F |
5-12-2009 |
5.77 |
||
|
SDS |
5-13-2009 |
59.68 |
||
|
SRS |
5-13-2009 |
22.81 |
||
|
SSO |
5-13-2009 |
25.02 |
||
|
SKF |
5-13-2009 |
47.37 |
||
|
UYG |
5-13-2009 |
3.92 |
||
|
URE |
5-12-2009 |
3.97 |
||
|
URG |
5-14-2009 |
1.04 |
||
|
UNG |
5-15-2009 |
16.19 |
||
|
JNK |
5-15-2009 |
33.60 |
||
|
HYG |
5-13-2009 |
76.52 |
||
|
FSLR |
5-13-2009 |
187.05 |
||
|
V |
5-12-2009 |
65.85 |
||
|
ICO |
5-13-2009 |
2.93 |
||
|
TZA |
5-13-2009 |
28.36 |
I hope you are enjoying the picks so far. Without suggestions and comments I cannot improve this blog so I strongly encourage comments.
-K
SKF (UltraShort Financials) Overbought?
I hope you saw my post about my February performance. Most of my gains were thanks to shorting the financial sector via SKF.
I have still kept an eye on the ETF after selling it and is now is extremely overbought on many levels. I had a target of $250-255 for it but I did not hold my shares past $200. Now that my target has been reached I am looking for SKF to come back down to earth, I am looking for at least $182-186 range.
With the market crashing down so fast there is not much incentive to go more short as I am sure SEC has plans for a no shorting rule or at least something to stop the bleeding. That concludes this post and I will rest my case by providing you the chart which I am basing my case on.
Below I am attaching a chart showing the RSI being overbought but also SKF itself going over the Bollinger bands that I use.
If you are looking to buy into SKF (besides trading it for quick scalps) then either stay away from it or just take the chart into consideration. (Click to Enlarge)
As always, I merely post my opinions on here so I am not responsible for anyone's financial decisions.
Have a good day,
-K
UYG short term bounce next week?
If you looked at my previous post I called for a break of support for S&P 500.
I didnt really set a target below but Matt Trivisonno had called this low back in October.
768.67 - Coming Soon to a Screen Near You … a screen about 18 inches in front of your face that is. 768.67 was the S&P 500 intra-day low on October 10, 2002. That was the day that the last bear market ended.
Since that Call was made almost 5 months ago and things have gotten even worse now.. I don't think the bear market will end here.
The interesting stock of the day is UYG
I have been looking at Fibonacci numbers lately and UYG has 2 targets which it hit. One was at $2.39 and the otheer at $1.95.
I loaded up at 2.43 with an idea of doubling down at 1.95 but missed the the boat.
If 1.95 is really a reversal zone there are a few projected upside targets. Probably strongest resistance will be at
$2.61 (38.2% fib value)
$3.05 (61.8% fib value) also that would fill the gap-down UYG had on February 17 which could mean UYG then is free to begin another leg down to -zero-.
If i were to be bullish on this ETF (which I am not at the moment) other resistances above are $3.37 and the extreme $4.29. I do not see these last 2 prices near term however.
Here is the chart to show you what I am looking at. Note: projected upside values are not shown. (Click to Enlarge)
Sources:
Matt Trivisonno (768.67-Coming Soon to a Screen Near You)
Investing in a Bearish Market
During hard times like the ones we are seeing now with the economy, one thing i am beginning to like is Ultra Short ETF's. They are basically bets against certain sectors or indexes. There are also ProShares which bet for the market to go up.
One of my latest moves into ETF's is buying (SKF) Ultrashort Financials on August 14, 2008 . As you can see from the table i have provided (hopefully it displays decent in most readers) I am looking at the Point & Figure Patterns for the Top 40 stocks market cap wise in the financial sector. FRE and FNM are not up at the top but have been talked a lot about in recent news.
Before i get you confused as to what the signals mean I will provide a brief description of each, courtesy of stockcharts.com
- The double bottom breakdown implies that the buyers who were supporting the price are no longer able to create demand that is more than the supply, and prices are breaking down.
- A triple bottom breakdown is similar to a double bottom breakdown except that the price at which the breakdown occurred is a price that the chart retraced from two times before. The breakdown below this level implies that the sellers are now creating more supply than there is demand and therefore the prices are breaking down.
- A double bottom followed by another double bottom, or three bottoms, each lower than the previous is recognized as an descending triple bottom breakdown. The idea is that supply is continuing to outstrip demand on an ongoing basis.
- A bull trap is a triple top breakout followed by a reversal. The breakout is possibly due to buy stops being hit just above the resistance level, and the quick reversal suggests lower prices ahead.
- The high pole warning is given when a chart rises above a previous high by at least 3 boxes but then reverses to give back at least 50 percent of the rise. The reversal implies that the demand that was making the prices rise has given way to supply pressure. The pattern is a warning that lower prices could be seen in the future.
- Bullish signal reversed pattern is a series of rising tops and bottoms that finally soaks up all demand and the double bottom breakdown at the end signals that now supply is outstripping demand.
Enjoy the table I have created. As you can see many bearish signals were given on August 13 so I went ahead and bought SKF on Aug 14 at $123.50.
|
Top Bearish Financials |
||
|
Symbol |
Signal |
Date Signal Spotted |
|
Triple Bottom Breakdown |
August 6, 2008 |
|
|
Double Bottom Breakdown |
August 7, 2008 |
|
|
Double Bottom Breakdown |
August 8, 2008 |
|
|
Double Bottom Breakdown |
August 11, 2008 |
|
|
Descending Tripple Bottom Breakdown |
August 12, 2008 |
|
|
Triple Bottom Breakdown |
August 13, 2008 |
|
|
Spread Triple Bottom Breakdown |
August 13, 2008 |
|
|
Double Bottom Breakdown |
August 13, 2008 |
|
|
Bull Trap |
August 13, 2008 |
|
|
Bearish Triangle |
August 13, 2008 |
|
|
Double Bottom Breakdown |
August 13, 2008 |
|
|
High Pole Warning |
August 13, 2008 |
|
|
Bullish Signal Reversed |
August 13, 2008 |
|
|
High Pole Warning |
August 13, 2008 |
|
|
Double Bottom Breakdown |
August 14, 2008 |
|
|
Double Bottom Breakdown |
August 14, 2008 |
|
|
Double Bottom Breakdown |
August 18, 2008 |
|
|
Double Bottom Breakdown |
August 18, 2008 |
|
This is the longest post i've written and I'm sure some of you want to ask questions or make comments, please let's discuss.
Is The Oil Bubble Ready To Burst?
Bubbles Always Have a Limit where they can no longer grow and sustain the hype.
I have seen oil run up like many of you have but without owning a car it hasn't hurt my wallet yet.
I've been thinking of investing in an oil shorting stock (Exchange traded Fund in this case.)
Symbol: (DUG) which bets that oil will go down. The ETF that bets for oil is (DIG) and the top 10 holdings are listed below. DUG basically almost shorts all those companies and more.
Source: ProShares
Here is my usual chart showing the trend reversal the past few days.
It broke through the 50 day moving average and might make a modest run.
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An interesting chart showing that the oil price has touched base with the total oil consumption just like the 1980's bubble.
Source: SmartEconomy
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Disclaimer: I have not invested into DUG yet but it is getting very interesting.
