I know, I know. Never stand in front of a freight train. You're right. And being short two S&P 500 contracts is, well, wrong! This first chart is the SP-500 daily.
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By the way, the sentiment data from Investor's Intelligence is just in and it shows that the bullish % has backed off a couple % to 55.6%. All in all, I continue to believe the stock market is in for a dousy of a correction, but probably not until the True Strength Index (TSI) indicator says it's time. Money Flow is trying to stage a comeback and we'll see how long that lasts.
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Click on any chart to ENLARGE
Another look at the freight train, this time from the vantage point of the /ES continuous SP-500 contract. I think it is completely fair to say that I entirely miscalculated my timing on taking a short position. Oh boy, and it is costing me, too. LOL Anyway, there appears to be enough momentum in progress that barring some engineer screaming on the brakes, this thing could float along, drifting higher for a couple weeks. Darn it.
And finally, this is a 60 minute chart of the SPDRs S&P 500 Trust Series ETF (SPY). Thinking optimistically, as the Money Flow Index (MFI) indicator has already begun to roll over, and the True Strength Index (TSI) indicator is on an impossibly steep trajectory, I am thinking later today we may see some breakdown in price and that just might be my opportunity to step off the train track.
Oh, before I forget. I did buy some shares of Market Vectors Junior Gold Miners ETF (GDXJ) at $40.01. I think this is the first time I have bought this ETF - surprising, huh?
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My TSI Trading record has been updated.
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Thanks for the information John. Just try to give us a heads up when this freight train is finally going to derail a bit. You're thinking sometime in Mid-January then?
ReplyDeleteYes - probably in a couple weeks. I decided to get out as price did drop some in the last hour (as I hoped).
ReplyDeleteWith the US Dollar apparently going to begin the Bernake sky dive, I'm not sure you want to stay with this trade much longer. As the Dollar falls, all other asset classes, including the stock market, will continue to rise (gold, silver too, of course).
The stock market is indeed a freight train and I am afraid in the next couple of weeks it could become a runaway freight train. My apology for not reading the signals correctly in the first place.
John,
ReplyDeleteI'm new to the TSI and hope that I didn't misuse it today. I issued a SLV PUT S/P 29 at 1:32 PM EST. SLV 4-hour TSI was at .84 and the 3-day MA was rapidly moving towards it. The 1-hour TSI had crossed the 3-day MA downward at 12:15 PM EST. The TSI numbers looked even better at 4 PM. Did I jump the gun? Btw, thanks for all of your help.
Larry
Larry - if I understand you correctly, you sold a put on SLV? If so, that should, in time, work out just fine. I would like to more specifically answer your timing question. Could you possibly send me a chart with your thoughts identified on the chart? tsiTrader@gmail.com
ReplyDelete