The purpose of this site is to share results of a trading system that I use for identifying both long-term and short-term trading opportunities. I take the time to do this because of my passion for investing and helping others succeed. The system helped me avoid the "Crash of 2007/2008" and every major correction since then. The cornerstone of my trading system are analyses of market liquidity to gauge longer-term market sentiment and equity and index options (put/call ratios) to identify short-term entry and exits.

This site is for information purposes only. Past performance of the trading system is not a guarantee of its future success. Please consider consulting a qualified investment adviser before making investment decisions.



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Sunday, July 12, 2015

It's a tough call, but someone's gotta do it

Believe it or not, with as much fear in the market, the facts before me don't support a bear case . Here are the technical factors that support a bullish stance:

1. Macro Indicator: My macro indicator that gauges market liquidity isn't showing a continued deteriorating condition. It's sorta interesting though that a notable technician, Tom McClellan, recently spoke on the Financial Sense Newshour podcast and cited the same macro indicator I use but shared an interpretation that differs from mine. He's calling for an August top, but in my opinion, the indicator hasn't deteriorated enough to warrant the pessimistic call -- at least not yet.

2. Relative Strength: The S&P successfully tested it's 200 day moving average and has since bounced. Furthermore, a key component of the market -- financial stocks -- has showed a lot of resilience from a relative strength perspective. Lastly, the market closed out the week by forming a (minor) positive RSI divergence.

3. Short-term Options Activity: My short-term model appears as though it will generate a buy signal by Thursday, July 16.

As I indicated in a prior post, my "system" would call for a fully invested stance if the market penetrated the trailing ATR3 stop. That level currently stands at 2106. Given the positive divergence and the impending short-term buy signal, my plan is to deploy 50% of sidelined cash by Thursday and then deploy any remaining funds when 2106 is breached to the upside. Please note that the actual amount deployed will depending on finding attractive stocks for my dividend growth portfolio, which represents a sizable portion of my allocation. By attractive, I mean from both fundamental and technical perspectives.

So there you have it.