ETF Prophet

(Click Image to Enlarge/ Glossary)Markets built strongly on the prior week’s reversal into the Thanksgiving holiday shortened week, leaving the S&P500 (SPY) up +19.1%. The period’s biggest sector winners were Financials and Real Estate (XLF +34.8%; IYR +31.9%) on hopes of further credit easing and promises of federal consumer lending facilities (Washington Post – US [...]

Image by Getty Images via Daylife Despite my best efforts to kill the patient (aka my accounts), I think he/she/it is still alive – finally, I’ve got some better movement in the systems area.  Nothing that makes me want to run out and throw all my money at them, but hey, it’s a start. November [...]

Bit of an erratic day within a narrow range. I expect more and more swing traders will be getting net short here either at the close or on Monday, and possibly in size. The magnitude and duration of any pullback will set the tone for the rest of 2008 after this 80-year upside correction. The [...]

As of Thanksgiving, the S&P500 has rallied 19.8% in the three and a half days since last Friday’s bear market lows. The powerful move has left 9 out of 12 major sectors overbought in the very short-term by several technical measures. Possibility of a pending pause or immediate pullback aside, that’s not to say there [...]

Cumulative Tick has been explosive and all internals are very strong. Normally I’d be levered long by now; however, I wonder how much more juice we can squeeze out of this rally ahead of the holiday (also note that not all sectors are joining in on the fun). Speaking of the holiday, have a wonderful [...]

…after the tremendous move up. Impressive given the news flow today. So far the daily pivot has held (SPY $84.25), but I’d be careful of any breakdowns below it as the immediate upward energy seems to have run its course and this would be a sell potentially running down to S1 or even the rising [...]

I’ve been waiting about three months to use that title. We made it all the way up to R2 (SPY $84.40), so be careful at the mid-day. Holding the gap after the first hour on the Citi news was a sign we might see a follow-through trend day. Will it be sell the news on [...]

(Click Image to Enlarge/ Glossary)A market that remains in “hyper speed” with an ever obvious bias to the downside left the indices at four week lows after a major range breakdown to levels not seen since 1997. This on what can only be kindly termed awful jobless claims and depressing “Big Three” Auto Exec testimony [...]

Image via Wikipedia I’ve been playing around with a website called Typealyzer this morning for fun as I have no trades on or to be done.  Basically, the software analyzes a website and then decides on the “personality” of the writing of the website.  So, for fun, I’d run all my favorite trading blogs through [...]

As the VIX “settles down” to 75 after price plumbed the depths, we are again testing the VWAP (Volume Weighted Average Price) to the upside. It’s difficult to say whether we will break it, as AD remains flat while Cumulative Tick moves slowly southward. However, I am encouraged by the multiple tests. Up and Down [...]

[Chart Data Correction Posted] After today’s seminal S&P drop to new lows not seen since the last decade, I thought I’d post my usual end-of-week ETF charts as an intermediate point of reference. Note that eleven out of eleven tracked sectors are highly oversold on multiple time frames. This is extremely rare and indicates one [...]

Image by Getty Images via Daylife Ok, so in my prior post I said the market hadn’t chosen a direction.  My mistake.  It has.  And it is straight down.

Thanks to all the nice folks who sent me comments or emails with your best wishes for my wife. They were appreciated. I’m back at the computer for a few minutes a day, but not trading again yet. Still sorting through those 262 emails I received while I was away. Bears look like they’re winning [...]

Image via Wikipedia As expected, yesterday the Skills Index closed below its moving average. So, what this means is that I’ll be looking on the short side rather than the long side for opportunities.  Meanwhile today, the market seems to be having trouble deciding which way to go. I’ve come to the obvious conclusion that [...]

We managed to tag yesterday’s referenced target break-down zone and [CNBC fact check edit: hit approached] last crash lows from ’03 ’02 on the SPX after this morning’s gap down. The gap was filled on most indices save the S&P 500 (nearly) and Russell 2000 (not by a mile), which is a bit concerning from [...]

And I thought we wouldn’t gap down! Will it fill? Odds say yes [see Quant Edges*]. I was once invested in a gap strategy ‘fund’ that just got absolutely smacked. Adaptive parameters and tight money management are needed for that strategy to work over time (guess what they lacked, not to mention they kept their [...]

For those who want to know what the impact of technical and algorithmic trading is on the indices, look no further than last session’s overnight trade. See how closely price traces along the five-day moving average (the cyan dotted line) within the orange outlined box? This is a common sell parameter for these models. Unfortunately, [...]

Image by longan drink via Flickr A few weeks back, I was emailing with Woodshedder about the problem of volatility targeting in tradings systems.  This cause him to write this better sumary of my point in this post: Finally, Damian from over at Skill Analytics reminded me that traders can get hit with larger than expected [...]