Tuesday, February 18, 2014
reduce exposure
V shape again. No matter how much I love it, I feel ES / SPX is getting close to a stopping point. I reduced my exposure today. Overall my target is still 1880. I want to buy at 1815. There is chance ES break out 1850 directly w/o correction. If it happens, I will chase.
Friday, February 7, 2014
Monday, February 3, 2014
New Year, January Barometer, and so on
Portfolio Update
Oops I guess I missed yet another update. No change in signal for Jan, even with the sell off in the new year. As i described, my style of Ivy Portfolio is to adjust at the month end only, so even with today's crash, sell is not triggered yet.
Market View
On Jan 29, I posted the chart above. It is Daily chart of ES, which is the futures of S&P 500 index. We got a confusing signal in the new year. SPX made a new high, while ES didn't. My best explanation is the new high is not decisive. I still should read the chart as triple top. The headache is however lots of indicators give totally different reading. That's why I said I am not sure if bottom is in at 1780 and pointed out 1730 is a better support.
Here is the chart for today. Very unfortunately we are at 1730s now. It is very oversold at this moment. VIX spiked today. I think it could be a good bottom for this wave. I am guessing an upward correction to north of 1800, then form the next trend. I am going to update my VIX chart in a moment. If you hedge your portfolio using my vix>14 rule, you should book nice profit. I am unwinding this leg now.
January Barometer
Definition:
I checked recent years and I don't think I can get a clean statistical conclusion. I think in a bull market the bullish JB setup performed way better. (90%ish per STA.) In a bear market, the result is way more indecisive. If we look at bearish setup only, JB delivers a useless result, 52%. The most recent bearish JB signal happened in 2008, 2009 and 2010. It was only correct in 2008 and was miserable in 09 and 10. The only before that is 2003. It was bad again. My take is JB is good for trend following in bull market, but not that useful in trend change or bear market.
TBC
Oops I guess I missed yet another update. No change in signal for Jan, even with the sell off in the new year. As i described, my style of Ivy Portfolio is to adjust at the month end only, so even with today's crash, sell is not triggered yet.
Market View
On Jan 29, I posted the chart above. It is Daily chart of ES, which is the futures of S&P 500 index. We got a confusing signal in the new year. SPX made a new high, while ES didn't. My best explanation is the new high is not decisive. I still should read the chart as triple top. The headache is however lots of indicators give totally different reading. That's why I said I am not sure if bottom is in at 1780 and pointed out 1730 is a better support.
Here is the chart for today. Very unfortunately we are at 1730s now. It is very oversold at this moment. VIX spiked today. I think it could be a good bottom for this wave. I am guessing an upward correction to north of 1800, then form the next trend. I am going to update my VIX chart in a moment. If you hedge your portfolio using my vix>14 rule, you should book nice profit. I am unwinding this leg now.
January Barometer
Definition:
Devised by Yale Hirsch in 1972 our January Barometer (JB) states that as the S&P 500 goes in January, so goes the year. The indicator has registered only seven major errors since 1950 (all within secular bear markets) for an 89.1% accuracy ratio.Market Talks:
Ye Olde JB is negative. On top of this, DJIA closed below its December closing low of 15,739.43 on January 29. Both are ominous for this nearly 5-year-old bull market. Since 1950, this combination has occurred 21 times with declines going on to average –14.0%. Full-year performance was negative 14 times with all 21 years posting an average loss of –3.2%.
My Observation:
I checked recent years and I don't think I can get a clean statistical conclusion. I think in a bull market the bullish JB setup performed way better. (90%ish per STA.) In a bear market, the result is way more indecisive. If we look at bearish setup only, JB delivers a useless result, 52%. The most recent bearish JB signal happened in 2008, 2009 and 2010. It was only correct in 2008 and was miserable in 09 and 10. The only before that is 2003. It was bad again. My take is JB is good for trend following in bull market, but not that useful in trend change or bear market.
TBC
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