The Pattern Trader at September 1. What a really volatile week! We expected something wild but what we got was totally out of this world . It is going to be fast and frenetic . VIX – 1. 6 Sep 2. AMCThe VIX spiked to 2. Monday but subsided through the week to close at 1. This level does not represent the kind of calmness in Risk that is often associated to 1. VIX. Yields pivoted on the belly of the curve to steepen for the week. The 3. 0yr added 4bps while the 2yr lost 2bps. That would usually suggest that greed is returning to risk. However, given the divergent nature of the market, I reckon it was a case of long term fixed income monies running away (to where, I don’t know yet) and short term fixed income seeing an increase in hedges. This came after a huge spike across the board on Tuesday as investors realised the possibility of a Rate Hike in the coming week. The CPI number on Friday did little to calm nerves as the total number increased 0. August while core CPI (which excludes food and energy) jumped 0. August. Yon. Y, the CPI is up 1. CPI is up 2. 3%. So while inflation seems to be firming and is usually seen as dovish news, the market saw it as an additional risk in the case for higher rates. ICP100 Configures all modules in the Q.bloxx, e.bloxx & ISM series for the RS485.
LAST WEEK’S RECAPLast week, I said; Monday 1. Friday 1. 6Monday of Expiration Week is usually bearish with the Russell 2. Expiration Week of September is usually bullish on DOW and S& PSeptember 1. Triple Witching Friday with the DOW up 1. The coming week (3. September, holds an 8. TP LINK High Gain Wireless USB Adapter at Office Depot & OfficeMax. SPY and DIA over their 5 and 1. According to the 2. Stock Trader’s Almanac, the bullish averages for Monday, Tuesday, Wednesday and Friday are more than 6. DOW and S& P5. Thursday is the flattest day of that week. The statistics weren’t that far off in that the week still kept its predominantly bullish numbers and on the two days that were up, the indices really went UP. September Triple Witching Friday is now up 1. I missed a really profitable trade on Monday (See Conclusion). Nevertheless, it was a profitable week on SPY. On a budget of $2,5. SPY returned a $3. Friday’s open for a return of 1. This was in spite of the wild swings and unpredictable nature of the markets going into FOMC week. PREVIEW FOR THE COMING THREE WEEKSNow that we’re done with the Bulls, we’re going Bear this coming week. Monday 1. 9 to Friday 2. September. The fourth week is bearish, going down on the DOW 2. Tuesday 2. 0 to Wednesday 2. September – FOMC Meeting Minutes due out on Wed at 1. EST)The coming week (3. September has more than an 8. SPY and DIA over their 5, 1. According to the 2. Stock Trader’s Almanac, the bearish averages for Monday, Wednesday, Thursday and Friday are more than 6. DOW and S& P5. Tuesday is flat- to- bullish at around 5. Wednesday, Thursday and Friday are the most bearish days as the week closes into increasing bearishness. We could also see a surprise move by the BOJ on Monday that could over- shadow what the Fed does on Wednesday. While in the west, investors are bracing themselves for a short on risk from higher Fed Fund Rates, in the east, investors are waiting for the long trade on risk from more easing by the BOJ. Let’s also not overlook what the RBA could do on Monday as well. Key Economic Dates. Monday 1. 9. On Monday, as the market rallied, I thought my position of 2. Oct. 21. 8Calls at $1. I went to sleep. I was powerless to do anything as I was in class on Tuesday night. At $1,7. 00 from a $2,5. Well, some profit at the end of the week is better than a loss, I guess. Can’t help but rue the one that got away . My confidence is high, my senses are keen and my skills are sharp going into this week’s action. I am a Bear on the hunt! Plus, I am cutting my hair on Tuesday BMO. Happy Hunting!! Actually, some of you who have gotten used to my bearish/hawkish tones, may be surprised at what I am about write. Let’s review the situation first . This comes after the DOW marked 2 DFDMs (Down Friday, Down Monday) in six weeks at the top. The sell- off was sparked by fears coming from the reality of a rate hike on 2. September. The Bond market had an even more frightening session as they sold off across the board. The 5 and 1. 0 year yields jumped 6bps up while the 3. The fear of this bond bubble bursting came after months of massive bond buying as a result of quantitative easing in Japan and Europe which had pushed yields to record lows since last year. The reality of less- than- stellar Q2 earnings that sent the market to record highs in August and September, must have set in and made investors react en masse. This was by far the most convincing sell- down for the year with $DVOL outpacing $UDVOL by around 3. The VIX (+3. 9. 8. It was a profitable session for me, by the way . The two trades, of course, were on a budget of less than US$1. More significantly, some of you may be asking why I closed out my Puts on SPY instead of letting it run into next week. Let’s just say that I don’t think there is any reason to crash the market yet and that September has always been prone to wild swings and higher volatility anyway. On closer examination of the broader market, it would seem that the sell off in the first half of the day was confined to the large and mega caps only. The TRIN didn’t show the broader market selling off until the last two hours when the benchmark indices cut past their 5. DSMAs. TRIN – NYSEThis, to me, was nothing more than a knee jerk combined with automated stops and shorts being triggered when the 5. DSMA was cut. The initial spikes and dips between 2pm and 2: 3. High Frequency Algorithmic Systems running orders on this trigger. Volumes on the DOW and S& P didn’t show significant increases on the day to convince me that this sell- off could have been the start of armageddon. With such a wide range on the day, the volumes pale in comparison to the January, February and June corrections. One could call it an ugly Three- Line Strike on candlestick analysis. DOW – Volumes. Support on the DOW should hold above the critical and psychological 1. S& P5. 00 should be supported above 2,1. The real sell- off is yet to come. Over the next two weeks, the market will tell us if a sell- off is due or if this is just the normal September craziness. Let me surprise you all and say that I am actually bullish for the coming week. Let’s preview the coming weeks into the end of September and the first day of October . Wednesday, Thursday and Friday are the most bearish days as the week closes into increasing bearishness. Monday 2. 6 to Friday 3. Watch out for Portfolio Dumping/Window Dressing in the last week of the month/quarter. The last day of Quarter Three has been down on the DOW 1. The first trading day of October has been down on the DOW 6 of the last 1. The last week, 3. September has less than an 8. SPY and less than a 6. DIA over their 5, 1. The 2. 01. 6 Stock Trader’s Almanac’s averages for Monday are mild bearish at 5. Tuesday, Wednesday and Thursday are flat- to- bullish on the DOW and S& P5. Friday is the most bearish day at more than 7. CONCLUSIONI am bullish for the coming week (3. I reverse everything into shorts in the following week (3. It is going to be fast and frenetic . That week is infamous for Portfolio Dumping – a phenomenon whereby Fund Managers adjust their struggling portfolios (especially in difficult years) by massively off- loading their losing positions in order to create the illusion of an out- performing portfolio by keeping the winners. If the dumping is checked, they are likely to follow- up after the first week of October and even on Expiration Friday of October. That will be the true test for this market and might just set the tone for 2. But that another story for another post. Happy Hunting!! Comments Off on Sector Report 1. Overvalued 2. 01. September 6, 2. 01. The month of September is notoriously bearish so we’re featuring the most Overvalued large- to- mega cap companies on the S& P5. August 2. 01. 6. Investors are expecting this year’s September to provide the catalyst for that long awaited correction that hasn’t materialized yet. If it does materialize, the best picks for shorting will obviously be the most over- bought stocks in the benchmark indices. Includes latest market updates. Get your issue here: Sector Report 1. Overvalued 2. 01. Comments Off on August 2. Review, September Preview at September 1, 2. Busy busy busy . And its been a great ten years because I’d rather be busy and working hard than bankrupt with too much time on my hands. I have always dreamt of the day when I would be successful enough to take it easy and enjoy life, lay back, chill and simply . That was a totally wrong concept of what success is really about. There really is no end to how much you can achieve once you set the wheels in motions because one success breeds more and like my mother- in- law said, “money doesn’t like to be lonely”. How apt. On 2. 1st August, KL completed its 3. Tutorial batch who are now in Tutelage for an additional five weeks with Gary and Wai Seng, my longest stalwarts and supporters of the program. This was the only batch this year (in SG, KL and PG) that didn’t sell out. The reason was that we used this batch to capture the whole Tutorial digitally so we needed the space for the cameras. Every other batch this year has been sold out and even over- sold in some cases. Most of them were sold out weeks before the Tutorial started. On Tuesday 2. 3rd August, Singapore saw its 8. Tutorial batch complete its nine lessons in eight weeks. Now they are going to get hit with their Post Graduate Assignments over the next six weeks. On the 2. 6th of August, Penang started their 5th batch there and what a batch this has been so far. I’m off to complete their Tutorial this weekend and if their first outing was any indication, I am in for a real fight this weekend because this is one super energetic bunch with all the right questions and a hunger I’ve not seen in years. Finally, on Tuesday 3. August, Singapore started its 8. Tutorial batch. Yet another over- sold batch with 3.
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