ETF Prophet

Dear Subscriber, Prospective false breakout aside, today's damage was light and we have good seasonality ahead combined with a positive bias for tomorrow.  I will ask you to note that the dashboard is heavily S&P 500 tilted.  There are mixed signals among the other majors — so I do have my concerns for the balance [...]

Trend action has been highly efficient today on enhanced end of month volume. While price broke its five-day moving average earlier on a presumptive false breakout, it is now re-challenging that level. I will note that the last several days of chop as flattened that out.

The Asian session has been a great source of candidates for the straddle setup lately and yesterday was true to form.  From the close of the US equities markets the EUR remained in a 14 pip channel for almost 6 hours.  I typically wait for at least a 4-5 hour channel setup before entering a [...]

Dear Subscriber, The market has held up admirably well on a QE inspired weakened currency,  and we have a neutral outlook for tomorrow to wrap up the quarter.  Re-balance programs could always come into play, but the geometry of recent price action and recent new money effects having been delayed into the new month would [...]

Here are some of the key target levels mentioned during today’s chat session”

Cumulative tick was performing quite well past the mid morning, taking SPY price to just below yesterday’s highs, where it was promptly rebuffed on falling interest/volume. However, a slight upside bias remains in this otherwise range day. Looking at the chart below, this move is beginning to look tired without new catalysts. The McClellen Oscillator [...]

I’ve mentioned these bracket or straddle setups previously and try to post a couple daily in real time in the chat room. Given the usual dynamics of the EUR lately last night’s price action offered what appeared to be an attractive risk/reward for such a play.

Summer is over and the end of the third quarter is upon us. The table below presents an interesting state of the market in terms of complete cross correlations (bottom left) and z-scores (top right) over the last sixty trading days (roughly three months) for all of the major indices, styles and sectors using ETFs [...]

Dear Subscriber, By staying in a relatively tight range, the SPY has thus far managed to move higher without pushing overbought status too hard.  While we have a strong mechanical reversion signal for tomorrow's trade on the board, I have other models suggesting otherwise.   What to do?  Again, I think protection is still in order, [...]

Overnight the GBP Dipper produced a handsome 75 pip gain after being closed out with our 15 pip trailing stop at 5:15 (Chicago time).  Once again the trailing stop helped preserve our gains.  Had we stuck with the trade until the fixed time exit at 8:00 we would have given back an additional 20 pips.  But [...]

This post is going to be very different from what I usually post. I want to write about my experience on becoming a system designer and systematic trader.  Why now? I’m about to pass 4.000h of system development and trading. Yes, I’m maintaining a time log. However, it’s been an amazing journey from a personal [...]

If “Resiliency” is the catchword of the day in terms of equities price action, “Competitive Devaluation” is it for currencies and metals.  Since the morning catch in the low SPY $113 range right above the recently broken trading range, internals have slowly but steadily sloped higher, and the SPY has just now broken its daily [...]

Dear Subscriber, Although we put in new highs and lows today, it was really on the margin and SPY $115 has proven strong resistance that shouldn't break too soon without a powerful news catalyst.  I am looking at SPY support in the low $113 range with a mild down signal on the board for tomorrow.  [...]

I am looking at the QQQQ on the daily and noted the steepness of the recent run and the proximity to April highs. Moving onto the weekly time frame, the QQQQs are about 10+% away from 2007 highs. After a terrible 2008, tech has made an amazing recovery. Could there be some trapped bulls looking [...]

Many of the currencies remained range bound most of the day.  That being said, both the Euro and the Pound displayed multiple dramatic 15 pip/10 minute whipsaws and I was lucky enough to pick up 2 short term trades on the Euro and 1 on the Pound that produced a total of 34 pips.

Today’s small give back is not unexpected, and with such small magnitude can be classified as “consolidation”.  While internals are also weak, they are not terribly sloped to the downside.

(Click Image to Enlarge/ ETF Rewind Glossary) In spite of a several day pullback surrounding a slow growth Federal Open Market Committee forecast, the board finished widely green for the week, with the S&P 500 (SPY) higher once again by +2.1%, making that four straight up weeks in a row.  In fact, only the US [...]

Dear Subscriber, Our bullish bias played well for Friday's strong breadth trend-day reversal.  Next week will bring a confluence of seasonal tendencies.  On one hand, we have the potential of bullish monthly and quarterly window dressing.  On the other,  there has recently been weakness in the very last days of the month, and it may [...]