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
Volatility Index $VIX Is moving higher.
On Friday The VIX went up 23.95% while the market fell well over 2.5%.
VIX is a popular measure of the implied volatility of S&P 500 index options. Often referred to as the fear index, it represents one measure of the market's expectation of volatility over the next 30 day period.
With the upward movement in the past 2 weeks the VIX has successfully broken a trend line going back to November 2008
See Attached Image (Click To Enlarge)
The VIX also had a bullish candlestick pattern on the 2D frame (2 days per candlestick)
Defeniton of this candlestick pattern is quoted below from Candlesticker:
Bullish Three White Soldiers Pattern is indicative of a strong reversal in the market. It is characterized by three long candlesticks stepping upward like a staircase.
The following are two charts; one showing the Three White Soldiers pattern on the 2D chart the other showing it on the hourly.
2Day Chart (Click To Enlarge)
And finally the Hourly chart (Click to Enlarge)
What does the bullish Vix momentum mean? Well by itself it means nothing to me. But when combining it with the increasing TED Spread, Broken S&P trendline, Numerous bank failings each weekend and many more indicators then it all signals that things are not well and the jobless recovery is not going to last much longer.
As always use caution as these are my observations and I do not make decisions for anyone other than myself.
Happy Halloween! 
-K
$SPX Stuck in a 9 point range..Which way will it Break?
The S&P 500 index is stuck in a 9 point price box.
1051 is resistance from October 2008.
1042 is support from the last 3 days and also the 18SMA.
We need to see 2 or more days of market closing either above or below one of these 2 points before there is any significant breakout or breakdown.
For the moment we have a setup for almost a Kicker Bullish setup but the 3rd red candle that was put in on Friday doesn't make this a perfect pattern.
If on Monday we follow the Kicker setup, we might have a move to higher highs (above 1080).
The setup is not exactly a Kicker but it fits the bill very well. If $SPX closes below 1042 for 2 or more days then next support is 1030 which would be the defining moment of this "Bull Market".
Here is the attached Daily and Hourly chart (Click to Enlarge)
Look for an update by next weekend if the setup plays out.
-K
Mini Correction, Mini Recovery Then Massive Correction?
As I posted a while back, (See the "Fake Correction Followed By Fake Rally?" article if you missed it) the $SPX (The S&P 500 Index) has nicely corrected to satisfy me that there will be another move up 20-40 points to shake off more bears and when they are nearly all out (If market makes a higher high it will be seen as very bullish) it will have a massive correction to trap bulls and make bears cry for getting out too quickly.
I will be revisiting the charts I drew in the previous article mentioned above. Let's start with the closer look in the past 3 days.
I was waiting for the SPX to break either the red or the green line and close below it. Well yesterday it did just that and that was the first clue as to where we were heading today.
The blue arrows are there to just demonstrate the Support line and where yesterday's close was. Grey line was my prediction for the next 2 weeks or so but it was defied by the market as it tanked lower and lower. (Click to Enlarge)
Second chart is the long term view of things and 2 possible outcomes that this investing freak sees realistic.
Scenario 1: (Orange Lines) Bounce back the next 5 days to reach possible 1040 (ADP Nonfarm Employment change tomorrow morning so this could happen if it "surprises") then drop back to 1000's and head lower going into October.
Scenario 2: (Green Lines) Go down further for the next day or to and reach 985-990 for a close (it could go down further and still close above 985 to be valid). Then hit ~1020 shake a few shorts that believe 1000 level has cracked and proceed into 950's.
Scenario 3: That's your opinion and I would like to know
Here comes the updated chart. (Click to Enlarge)
Good luck! and don't forget to follow me on:
Twitter ( http://twitter.com/investingfreak ) or Stocktwits ( http://www.stocktwits.com/u/investingfreak )
For the latest live commentary.
-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.
----------
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
Is the end (of this prolonged rally) Finally Here?
Whether you have been a bull or a bear since March you have to be worried about what will happen from here.
Bulls might lose if market goes down and corrects itself, Bears might keep losing money being short (unless they hedge then they are neutral players).
Here is a chart of the S&P futures that I found interesting how it topped around 3:31Pm at exactly the first Pivot Resistance (R1) or 1007.75. It's been downhill from there so far.
Have we finally reached the turning Point? (Click to Enlarge)
As I write this the ticker is heading towards 997.75 which is the first support for Friday.
UPDATE: WE HAVE HIT the first support line of 997.75 and might bounce or crash through.
Update #2: here I am 8 hours later and the futures have made a 360 degree turn. They now hit R1 (red line) of 1011.25.
What do you think? I am also long the Volatility Index (VIX) Via September 40 calls (got long today) because I think we are entering volatile markets again and that would be great.
-K
Current Picks
LAST UPDATE: 9-25-2009
9-24-2009 is full of new signals, mostly sell.
This page is intended to provide buy and sell signals given by a strategy.
Those who like my calls can follow or at least consider the alerts; those that think this is all fake can keep opinions to themselves and check the info page. Amount of time in the market using this system is about 38% on average which means you are not in at all times. It is not a buy and hold strategy nor is it a day trading strategy unless very rarely a buy and a sell signal occur on the same day.
I am only giving the latest signal for each stock mentioned. Use at your own risk and make sure to take the date into consideration.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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 | 9-24-2009 | |
| $INDU | 9-24-2009 | |
| $COMPX | 9-24-2009 | |
| QQQQ | 9-24-2009 | |
| IWM | 9-24-2009 | |
| SPY | 9-24-2009 |
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Rest of the Symbols (More will be added per request)
| Symbol | Buy Date | Sell Date |
| IYR | 9-24-2009 | |
| AAPL | 9-4-2009 | |
| DRYS | 9-23-2009 | |
| SDS | 9-24-2009 | |
| SRS | 9-24-2009 | |
| SSO | 9-24-2009 | |
| SKF | 9-24-2009 | |
| UYG | 9-24-2009 | |
| URE | 9-24-2009 | |
| JNK | 9-8-2009 | |
| HYG | 9-8-2009 | |
| REW | 9-25-2009 | |
| QID | 9-24-2009 | |
| QLD | 9-24-2009 | |
| XLF | 9-24-2009 | |
| DIG | 9-24-2009 | |
| DUG | 9-24-2009 | |
| SMN | 9-24-2009 | |
| VXX | 8-27-2009 |
Stock tips from the Freak strategy
After SKF's latest blunder in which I called the sell-off then couldn't resist the LOW LOW price of $155, I set off to design a strategy that overtime would bring consistent growth. I am using a 4hour interval for the strategy so it really isn't day-trading but also it's not long term investment (like those exist much anymore).
The idea is to give stock tips when the strategy throws me a Buy signal then to call the selling point when the strategy yells SELL.
Now If i use the S&P 500 or the Russel or any other index (all the stocks within it), I will get a lot of buy and sell signals that will drive me crazy.
I'm wondering if any of you have ideas on which stocks to put on watch list. I will also need to create a section on this page to show the buy and sell signals with their dates as well as how much gain/loss occurred.
I think i might be going a bit over my head as many people do this for a fee (Timothy Sykes anyone?) but I will think this through for the next week or two and then decide what to do. Your comments are really needed this time especially for ideas on which stocks to put on the alert list.
Till next Time,
-K (The busy man)
Is Dow Jones ready to recover?
Almost a Month ago I wrote a post about how the dow had yet to bottom. See: The Dow Jones Industrial Index has not yet bottomed ,at that time the index was at 11,842. A week later I followed up with a prediction that the Dow Jones Industrial would bottom at 10,800 (See:Prediction: Dow Jones Industrial bottoms at 10,800.)
On July 15,2008 the Dow Jones Index fell to 10,827 to make a new 52-week low. That new low came very close to my prediction and soon after it began rebounding. Since the weekend came and I found some time to go and revisit the chart for the dow I now think that the index has bottomed out and should begin to climb.
I believe the market will begin recovering because of a few reasons.
1. 10,800 is a very strong support zone going back to 2006
2. Oil prices have recently fallen from $146 to $128 (maybe that bubble is deflating)
3. The chart shows that the sellers are moving out and more buyers are beginning to take over (green and red lines almost crossing. Green is buyers, red is sellers)
4. At the end of the chart is the amount of money being put in the market. Since mid May it was in a downtrend which meant people were taking money out of the market and now it has broken out of the trend.
As you will see in the chart below however, today's action is within the downturn trend line and it needs to close above 11,500 or we might not have hit recovery period just yet.
Without further adieu i present to you... the Dow Jones Industrial Recovery Chart.
At this point i have invested in stock symbol (DDM) which has the top 30 Dow Jones Companies.
It goes mostly parallel to the Dow Jones Industrial Index. You can check out my current holdings at my Covestor page.
If you have any comments feel free to post them.
