ETF Prophet

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Oceanside - After 25 years of trading, I'm still exploring market dynamics. I daytrade and swingtrade using ETFs and options and sell premium decay longer term using NYAD, VIX & MAs combined with pivots and PSAR triggers. These posts reflect my humble research and are not solicitations to trade.

Selling Pressure Persists…4.12.14

Posted on April 12th, 2014

Thursday selling theme was repeated on Friday with QQQ and XLF leading the charge down (see VEGA below)….the exact opposite of what a bullish momentum model should look like.  Some of the big momentum movers are taking heavy hits while many of t…

QQQ Plunges….4.5.14

Posted on April 5th, 2014

A really bad day on the Qs on huge volume has put them in the red for 2014.  Is this is an omen for more downside to come or will we see the usual dip buying and then a pop to new highs? That’s the $64 question.One of the very interesting fac…

Weakness Persists…3.27.14

Posted on March 27th, 2014

Another red day and another day where QQQ and XLF were the weak sisters relative to other VEGA components….a bearish indicator.  XLE and XLU were the VEGA leaders….and while XLU often operates in a momentum contrary to SPY XLE is a bit of a su…

Poaching the Bond Cycle…..3.25.14

Posted on March 25th, 2014

Here’s the last word on TLT vs. TBT (20 year treasuries vs its ultra inverse).  Despite all the news dynamics and geopolitical uncertainties it turns out that once treasuries find a support resistance channel prices tend to behave in a rather pred…

More Gamma Nuances –TLT vs. TBT

Posted on March 21st, 2014

Following yesterday’s post on TLT vs TBT several readers asked for more clarification on how to play the Skew between the two. The pairs Skew is very similar to the M3 and M6 pairs Skew charts,it’s just programmed to run 40% faster since the target dur…

Strength Ahead of the FED….3.18.14

Posted on March 18th, 2014

Today looked very similar to yesterday’s open to close action. We actually saw an improvement in the XIV situation…as was reflected in the end of day ranking for tomorrow.  It’s been a while since XIV has been seated #1 and a quick look at the 5…

Gamma… A Model for All Seasons…3.14.13

Posted on March 14th, 2014

Here’s an update and revision of the 6 ETF M6 Gamma model using both daily bar and weekly bar rebalancing based on current momentum/relative strength rankings. A closer examination of the model shows how using the money management stops in the dai…

Indices Swoon, XLU Pops…3.13.14

Posted on March 13th, 2014

For the first hour it looked like we might see a green day fostered by good employment and productivity reports.  But then the trap door opened for the rest of the day and the VIX surged 15% with only a modest rally at the close.XLU was hands down…

Utilities XLU Surges…3.12.14

Posted on March 12th, 2014

The interesting action today on the VEGA model was the strength in XLU….typically a symptom of underlying bearish market sentiment as money flows into the lower beta issues like XLU. On the other hand the financials (XLF) are showing some distri…

Resistance Holds…3.11.14

Posted on March 11th, 2014

It’s actually kind of freaky how SPY reacts to the TrendX support/resistance lines.Yesterday we noted the SPY position relative to the medium term resistance line and today we saw a clear break of momentum to the downside.In previous cases of an upper …

TrendX High….3.10.14

Posted on March 10th, 2014

We’re back up to the SPY TrendX upper resistance line (side right panel) and the market is clearly in an ambivalent mood.  It’s now become clear that the Ukraine situation is no where near a “final resolution” and Putin is likely to escalate Russi…

Blame the Weather…3.7.14

Posted on March 7th, 2014

Many farmers use the futures markets to hedge the price of their crops 6 months hence and the weather is usually the biggest factor in the risk equation. Last FALL was a neutral time for energy and a bear time for agricultural….but that’s changed in …

DIA Approaches 165…3.6.14

Posted on March 6th, 2014

Another up day on very low volume.  Like yesterday, XLF was the top dog in the VEGA model while XLU was well in the red.  That’s bullish.As a side note GE has been slowly building momentum after an extended period of stagnation while the SPY …

Inside Day…..3.5.14

Posted on March 5th, 2014

Looking at the SPY daily VIXEN chart shows today’s chop and indecision.  It even more evident looking at the action of the XIV on the SPY Trader chartOn the VEGA sector model XLE was the big loser and XLF was the winner.Volume was luke warm at bes…

New SPY High…3..4.14

Posted on March 4th, 2014

After shedding 153 points yesterday SPY came roaring back with a 227 point gain today and a new high. Tentative volume may reveal a lot of short covering responsible for today’s pop…most politicos (and traders) were surprised by Russia’s apparent qui…

Commodites Poised…3.3.14

Posted on March 3rd, 2014

As the markets climb the Ukrainian wall of worry this seemed like a good time to review how our old commodities model was holding up.  In this case we look at the weekly model going back 7 years and the results are clearly better than SPY from a v…

The Costanza Problem….a Lesson for Traders

Posted on August 12th, 2013

The Jerry Seinfeld sitcom often featured George Costanza, a character who was a serial loser by his own admission.  George was frequently unemployed for long periods of time and was forced by his poor financial situation to live with his parents whom he found every opportunity to denigrate and demean. Although George tried almost every [...]

Commodity Model Worth a Look

Posted on March 20th, 2013

The Mosaic rotating commodity based model has seen impressive results lately. Most of the short term returns have been a product of  UNG gains but a quick look at the component charts shows good momentum in XLU as well…so a top 2 sort also produces nice returns. By avoiding the equity/bond skew using commodities we [...]