Thursday, July 23, 2009

Market Timing Commentary as of Thursday, July 23, 2009

Market Timing Commentary as of Thursday, July 23, 2009SocialTwist Tell-a-Friend
Fari Hamzei

Please Note: These charts are from the end of regular trading hours on Thursday, July 23, 2009.

MSFT, AMZN, AXP, COF, BRCM and JNPR all reported after the 4 pm NYC close today and they all missed, some by little, and MSFT & AXP, by not so little. All were taken to the woodshed for some much-neglected discipline. They are down, some heavy, in the after hours trading. We live and trade in a very frothy world, the management teams, were repeatedly reminded.

And for Reg. FD purposes, our Phoenix Traders went long JNPR Aug A-T-M Puts yesterday at about 2pm EDT. And, today at about 212 pm EDT, we doubled that position, very near the market high. After JNPR reported a double digit fall in revenues, a slide in margins and gave a disappointing outlook, I was asked on Twitter, why AAPL long calls on Tuesday and JNPR long puts today? My answer was simple: trading is all about market intel [something you won't find on CNBC]. We both laughed it out loud.

Let's go thru some charts. First my favorite, Sp1-MoMo chart. "Let's get really overbought" was name of the game today. After all, the venerable money manager Bill Miller of Legg Mason, wrote last night "the worst has passed" and "bargains abound in the US stock market" to his Legg Mason Value Trust fund.

NYSE Advance/Decline Line closed +2088 and SP1 back again above +2 sigma with MoMo at +45. Remember, as I mentioned in the last Friday video, posted further below, we could stay here and see these types of high readings both in relative (SP1) and absolute (MoM0) terms for some time. No guarantee we will just fall off the cliff here just because we are overbought. As always, I look for the requisite "catalyst" in geopolitics, Fed, White House, Wall Street, Pentagon, Big Oil, etc etc.

Next is our Wyckoff Chart. Notice we have moved 1,000 DJIA points in 9 trading days (spanning some 4 sigmas). Today, DJIA closed for the first time over 9,000, trading above last Jan 2nd high and came within 200 pts of Nov 4th Election Day price range.

In like fashion, DJ Trans moved some 4.5 sigmas: (Economy going forward will do well -- what commercial real estate problems, consumer credit, forget about it -- Washington will save 'em too -- and please, quit complaining about retail vacancy rates on Miracle Mile). And, RUT (risk-loving is back, its Index Futures at one point were up almost 4% today) and NAZZ Composite (closing higher 13-days in a row) all screamed in unison: Xmas is here early. Yeah, for sure !!

But not our beloved Vols. There were smarter of the bunch, and they stopped dropping in face of rapid ascend rate in the equities. VXN rode down the -2 sigma line, three days in a row last week, and as expected (as in last Friday video), it pulled backup, albeit, very very slowly until today. Both VXO & VXN closed higher today, as smart money started to buy some puts for downside protection. And Market Makers smelled it and adjusted those bid/asks, albeit by rapid-fire algo trades.

One fund rolled UP its SPY August downside protection at 92 strike into December 95 strike, for some 72,000,000 shares of SPY (S&P-500 ETF) it holds. Yes, 720K put contracts on SPY, a "jaw dropper," was one trade today that cleared at the ISE in NYC.

Last but not the least, here is our Timer Chart. With NYSE McClellan Oscillator (MO) at +226 and NAZZ at +144, with CI Indicators lit RED, SPX at +2 sigma, NDX above +2 sigma, we are short-term overbought again. Just look at Up/Down MO for NAZZ, it is almost +210. With Volume, being a coincident indicator, we should brace for a pullback.
Now with MSFT latest report, the TechLand recovery roadmap got a lot fuzzier. And with AXP and COF results showing consumer finances remaining in stress, the retail spending should remain below trend.

Now I said the same thing some eight weeks ago and nothing happened. We simply traded in a range. This time, it may be different. Tomorrow could be for the history books as the spin meisters will try to put a fresh new lipstick on this pit bull.

A Note of Thanks: We are immensely indebted to our learned colleague, Steven Sears, the Editor of The Striking Price Column at Barron's for his valuable & speedy research regarding the SPY trade today.

Sunday, July 19, 2009

Trading Futures during American-style Options Expirations

Trading Futures during American-style Options ExpirationsSocialTwist Tell-a-Friend

Trading Futures during European-style Options Expirations

Trading Futures during European-style Options ExpirationsSocialTwist Tell-a-Friend

Saturday, July 18, 2009

Market Timing Commentary

Market Timing CommentarySocialTwist Tell-a-Friend

Thursday, July 9, 2009

Today we passed the 3,000 Followers mark on Twitter

Today we passed the 3,000 Followers mark on TwitterSocialTwist Tell-a-Friend
Fari Hamzei

As promised back in May, to commemorate this milestone, we are offering 3 of our most popular packages -- at 33% off of our regular prices -- Proprietary Indicators, Phoenix Options Newsletter and Index Futures Chatroom and Streamer, as our Summer Specials.

Sign-up links are posted on Twitter. Just go to to take advantage of this offer (which expires on end of business Friday, July 10th).

Wednesday, July 8, 2009

Market Commentary as of Wednesday, July 8, 2009

Market Commentary as of Wednesday, July 8, 2009SocialTwist Tell-a-Friend
Fari Hamzei

We still stand by our May 22nd intermediate bias change, to the short side, which was again re-iterated on our June 12th blogpost here.

What is clear now is the very short-term over-sold condition we are in. The chance of short-term rebound (a dead cat bounce) has increased as we enter the Q2 Earnings Season.

This is evidenced by our MoMo reading (first chart) of below -30 as denoted by the green horizontal line and VXO trading near +3 sigma today (second chart).

Friday, June 12, 2009

Market Commentary as of Friday, June 12, 2009

Market Commentary as of Friday, June 12, 2009SocialTwist Tell-a-Friend
Fari Hamzei

As you can see in the charts below, starting with the left hand side, the rising S&P-500 Cash Index has been accompanied with lower and lower directional momentum, and thus creating a "bearish divergence" with the SPX.

In the right hand side chart, we show two proprietary modified Breadth (Advance Decline) data subgraphs. The longer term sub-graph (SP1) shows a modified cum A/D line superimposed with its sigma channels. The lower subgraph, MoMo, is a short-term A/D Oscillator. Notice the long-term vs short-term are also in a very pronounced "bearish divergence" pattern.

THIS TECHNICAL ANOMALY WILL NOT LAST FOREVER. It will resolve itself sooner than later. What is currently unknown is that the proper catalyst for the upcoming reversal.

If you are LONG, watch your trades very closely. If you plan to STAY LONG, start looking for some portfolio insurance (O-T-M Index /ETF Puts).

Sunday, June 7, 2009

Market Timing Commentary as of Friday, June 5th, 2009

Market Timing Commentary as of Friday, June 5th, 2009SocialTwist Tell-a-Friend
Fari Hamzei

A mixed picture at best, is one way to describe the latest US Equity Market charts and internals line-up.

And I am standing by my May 22nd short bias on SPX for Timer Digest's "Timer of the Year Competition." That being an intermediate term signal, my charts and indicators tell me to give this short a bit more time to work itself out. Here are some reasons why:

1. SP-500 Advance Decline Line Diverging (in an "M" pattern) from the Cash Index itself is trading higher (Chart 1, 2nd subgraph).
2. Volatility Indices receding again (setting up for a "W" before spiking higher - Chart 2).
3. Signs of Bond Vigilantes coming back -- TBT price action and options activity.

Sunday, May 24, 2009

Notice of Change of Bias with Timer Digest

Notice of Change of Bias with Timer DigestSocialTwist Tell-a-Friend
Fari Hamzei

Dear Jim,
Please log me in as SHORT on SPX as of Friday, May 22nd, 2009 Close of 887.00.

Have a great Memorial Day Weekend......Go Danica Go !!!

Tuesday, May 19, 2009

A Quick VXO (the original VIX) Update

A Quick VXO (the original VIX) UpdateSocialTwist Tell-a-Friend
Fari Hamzei

In my last webinar, on May 9th, I talked about VIX/VXO/VXN complex trading below 30. But as you recall, I talked about not the absolute level of this complex, but rather, its relative level (in Sigma Levels).

As you can see from the chart below, today, we broke 30 on VXO but we did NOT get to trade at -3 Sigma Level. That level now stands at 26. That is our next goal post. A bounce from 26 should mark a short-term "maxima" in prices for this leg.

More on this and other Mark Timing Tools, this Saturday in my webinar.

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