ETF Prophet

The major indices didn’t make much progress this week but they sure held up extremely well. Volatility took a few brief spikes this week, but all dips are met with eager buyers.  Even lagging Apple is picking up, helping to power the lagging NASDAQ higher.  After 28 days of uptrending and CNBC chanting DOW 14000, [...]

The AFC pulled off an upset in this year’s SuperBowl.  Does that mean we get a 6-8pt intraday pullback soon?  As we have learned since 2009, the low volume and low volatility grind up can last a long time once it gets started.  A strong January is often an auspicious sign for the rest of [...]

An interesting interview with Kyle Bass this morning on CNBC in which he noted that the technical long/short correlation of stocks and bonds has fallen apart and continues to deteriorate.  The practical implication for investors is that the search for superior portfolio components needs to be rethought to include different asset groups that are more [...]

The SPX 500 just finished the week above 1500, a mark it had not closed above since 2007, up 7 straight days.  The stochastic is embedded showing a strong trend.  Earnings are decent and like how we started 2012 the market had gone straight up.  With the aid of global and domestic monetary easing, equities are hitting [...]

The market continues to hold up extremely well despite a couple of brief intraday 10 point retraces.  We had gone over two weeks without a 1% pullback into the heart of earnings season and brought back memories of last year.  VIX continues to sag and volatility continuing to deflate.  With a temporary debt ceiling raise [...]

There are some bullish calls for a strong 2013 with targets in the 1550 to 1600 range for the S&P500.  Some are even looking for huge burst ups from the new high Russell and a resurging NASDAQ.  The four day 80+ point rally had erased all doubts prior to the cliff.  We could be targeting the [...]

Washington gridlock had postponed Santa’s visit.  Additional selling hit after hours and now we are testing the mini premarket flash crash area at ES 1391-1392, dropping 4.7% in 7 trading days.  We are definitely oversold and due a bounce but any wrong news this weekend could send us to restest the 1340 ES low last [...]

Although the fiscal battle is causing some uncertainty, the market is continuing to act like it’s confident the issue will be resolved.  The 50 point mini crash pre-market was bought but we have to keep in mind that the low at 1392 ES may get retested in the coming days.  Adding to the confusion the [...]

Full text and graphics for this article can be found here. Our goal is to utilize the Mosaic T2 momentum model to detect pockets of opportunity with the S&P morass. These are typically short term rotational moves although there are multiple instances when a sector has dominated the others for extended periods of time –sometimes [...]

As we draw closer to year end, December option expiration weeks are often bullish.  We are also hitting a 6 day low and oversold.  While I believe the fiscal cliff resolution is likely, portfolio insurance is still very cheap into year end.  Portfolio managers that are ahead are probably market neutral trying not to give [...]

The market has continued to rise higher with the fiscal-cliff debate or the proverbial wall of worry.  Additional easing by the Fed announced today produced some selling as we closed up 14 out of the last 16 trading days on the S&P.  Once trader had a chance to digest the news overnight, the QE boost should be viewed [...]

The lack of progress on a fiscal-cliff agreement didn’t hurt the market this week.  We are moving into a seasonally strong period with Santa Claus and the beginning of a new month.  While we still have some room on the upside, the easy month probably was 60-70 S&P points ago.  With VIX in the 15s, [...]

A furious mean reversion bounce took place this week with AAPL and beaten down tech leaders bouncing strongly.  We are close to the 200 day moving average at 142.7 SPY and many have resistance right where we closed on Friday.  A move to test the 200 day would not surprise, but at some point we [...]

We could be setting up a mean reversion bounce in the next 7-9 days as we hammer out a temporary low and in the process of forming a higher low.  Get ready to trade both ways!  There should be plenty of opportunities intraday.  A great opportunity Friday, as we probed lower on very oversold conditions.  I am also [...]

Friday reversal came true, but reversed when the Obama speech failed to address the fiscal cliff.  I am watching the huge breakout on the TLT to the upside and am wondering if the option expiration will follow the current down trend.  VIX may peak above 20 to generate some fear before the underperforming hedge funds [...]

  I haven’t posted to the Prophet for a while as most of my efforts have been focused on the Mosaic site.  FYI..here’s an update to the T2 model that just invests in the top 2 momentum ranked ETFs from a basket of 11 sector ETFs.  We use an RSQ (linear regression) stop to further [...]

We are setting up for a possible dead cat bounce after two downtrend days.  The S&P had joined the other indices that tested the 200 day moving average.  Apple is down 5 days and seem to be in free fall on the daily chart.  The trend is down and any bounce will likely invite selling.  [...]