Wall Street We Got a Problem

Junk bonds are performing at nearly the same levels at the depth of the 2008 financial crisis, and yet SPY is near highs.  I can't even imagine what junk will look like when we go into a recession.  It is likely these securities will merge.  My view is SPY will reach down more than JNK will come up.

New Trades

Yesterday, we were stopped out of our AAPL short at 108, from 107.62.  But we opened a 104 January put at $.60.  I expect great things from this position

We also flipped from short to long on closing XIV at $27 for a $1.28 gain, and buying VXX 19 calls for Jan week 2, at $.83.

We also closed our SPY calls for a 33% gain on a overnight trade.

As I expect weakness into the new year, I am closing my BIS short signal this morning.  Those were 28 puts for January.  Small gain is expected.

I'll post more trades and signals on Twitter as they come up.  You can realize great profits at a low cost by signing up.  Enjoy.

Quick Update

Just wanted to update everyone on open signals.

BIS sell is still intact and profitable
AAPL sell is still intact and profitable
SPY buy is still intact and profitable
XIV/VXX Buy and sell respectively is still intact and profitable.

Yesterday I called for a bottom at 2032, on ES and we hit 2035, and my ES signal reversed at 2042 to a buy and we bought SPY 206 calls, after closing SPY 203.50 puts at the 2040 area.

For today, we are already at the money and ES nearly breached 2060.  Watching to see if the pivot point (5 minute) holds (looks likely) and ride the price higher into tomorrow.  The 60 minute is sporting a bull flag.  Resolution is 2065 area.  High value area is 2098.

ES 2032

New Year Resolutions

AAPL Sauce?

AAPL tried to push back into it's volume range for the past month, but failed.  Now a bear flag is forming.  I will reverse short below 107.64 area next week if the Santa rally fails to materialize.

AAPL of my Eye

AAPL showed up big on the Buying on weakness charts on Friday.  It also flashed a buy signal for me on the hourly setting, so am looking at a trade above $106.33, with a stop at 103.19.

VXX Reversal

I got a VXX sell signal on Friday.  If you want to be conservative wait for it to hit 20.89, or a value area of $24 .  For XIV, I already recommended a buy, but if you are conservative wait for it to come into volume value area, (Green arrow, blue if you want to catch a deeper low.)

Gap Fill on Deck

By now, the reports on the end of the world as we know it are circulating the Blogosphere, and if you are a long term holder of equities I say it is and been time to lighten up, and go long, long bonds.  But if you are a trader, we are now very oversold, with a stretched  price to the moving averages, and a gap fill looming.

If Monday fills that gap, my view is we rally into year end.  My preference will be to sell volatility.

Just Trust the Signal

Computer code doesn't waffle nor rationalize.  This signal is a consistent money maker if you ignore all of the noise and take the trade.  Invest $12.50 and give it a spin for a month.  Might be the best lunch you ever bought yourself.

WOW

This chart needs no further commentary.  SPY vs. JNK

New Automated Signal

This is my bread and butter trade, and I finally automated generated a signal for it.

I automated an hourly VXX signal. 10 for the last 11 buying puts and calls. Buy 10 calls on the buy, buying 30-50 puts on the sell. I buy just outside the money, and always at least one week out and no more than two. 
 
Another winner this morning. http://bobsstocksignals.blogspot.com/   sign up on the right.
 
Comes automatically to your phone via Twitter. Computer genrated signal

Recap and Morning Update

We went in to yesterday short NADEX, GLD and Volatility.  All three trades paid off for us.  Then we bought NADEX below the S1, and that trade was stopped out for a loss as the market sank into the close.  Likely due to the shooting news.

But the market gave me a clue that I ignored.  When the market is in a downtrend, and you get a counter move from 1 to 1:30 that is moving higher, 1:30 usually will market the highs for the rest of the day.  I should have closed my NADEX long at that point and waited for a higher high.

But the end of the day afforded me an opportunity to short vol again with VXX puts which I did at 18.62 area, which are likely to pay off nicely this morning.

For today, because of the news today and tomorrow, I am unsure of direction, but premarket suggests a green day.  I bought NADEX 2075 for $70 yesterday (I did not post it as it was too speculative to share).  I will let the market open and let the market commit before I add anymore to NADEX.

For other trades everything looks like a mixed bag so nothing jumps out at me. Starting tomorrow and for at least the next week, the market is seasonally weak, so will watch for some short set ups, and TVIX to purchase.

Morning Update

Going into the day I am short GLD with December Week 2 puts as there are two high probability short days on gold this week.  The new COT week sell off on Wednesday morning, and the Thursday before NFP selloff.  Plus there was a gap fill failure and an hourly sell signal.  We'll see what today brings.

For ES I am flat, and won't do too much until Yellen does her speech.  I think we hit the high for the week, and in fact the high until at least the 18th after today.

For XIV, back in long again.  The gins have been small the last two weeks but gains nonetheless.  My stop is now 30.84, locking in at least $.40 profit from my $30.44 entry yesterday.  Remeber when you get a UVXY sell signal, you can buy puts on UVXY, and VXX, and calls on SVXY.  You can also do credit spreads, and / or buy XIV or SVXY.

IWM is getting toppy and watching for a short trade there.

NADEX, I have a 2112 short on for end of the day, and will look to put a long trade on after the market opens.

Daily Recap

I  took a still with some notes, on the trades today.  I posted everything live on my private Twitter feed and also some of these trades on www.slopeofhope.com, for free.  I also recorded a video but can't it to upload.

If you want real time signals on ES, NADEX, and volatility you can sign up on the right.  Only $12.50/month.

Pre Turkey Day Update

On Tuesday our XIV trade was stopped out at break even due to the news event.  The signal now is neutral, and statistically today and Friday are up days, so we may see another buy signal for the open.

Everything else is pretty flat, as well.  So the volatility trade is the only one I am considering in the market.

For NADEX I will put on EOD and some two hourly trades though, as I expect a fairly narrow range.

Going into next week, statistically a weak week, but a positive month.  The complication is the reaction to the FED meeting, and rates.  It is going to keep me trading small, and quick.

Weekend Update

The last three of the four years XIV traded during Thanksgiving week XIV is up.  The only down week was the end of a down move in XIV which saw a 400% subsequent move higher.  The VIX term structure looks bullish to go long XIV.  When the structure is in contango, the XIV managers must sell vix contracts to keep a constant 30 days duration.  That pushes XIV higher.

Here is a link that explains it well. http://www.vixstrategies.com/roll-yield-and-why-youre-thinking-about-it-wrong/

We currently have another short term buy on XIV from Friday at $29.14 with a current stop at $29.30, trailing $1.00.

Last week, we had two profitable trades in XIV, and am keeping the stops a bit tight this week, as well.

Our NADEX end of day trades all worked out for us, as well.  The signal is getting pretty reliable.

Took a shot on a buy signal on GDX, but it went nowhere again.  I may pass on going long gold and miner signals until we see the reaction from the Fed meeting.

Recap and Look Ahead

Pretty simple day for us yesterday.  We went in long and stayed there.  Our SSO, XIV and long NADEX all performed well.

One exception, I had a 2025 December put option from overnight on that I closed upon 2065 being taken out.  Minus $250 on that trade/hedge.

SSO stop is now $65.50. I am tightening up the trailing to $.50.
XIV's stop is now $28.54, also trailing $.50

NADEX closed true again.

My downtrend line was decisively broken and now am looking at a double top of 211.50 for SPY. However I am still expecting some retrace of this move higher so I am cautious.

I will post NADEX trade after the open and can see the range.

Recap and Look Ahead

Yesterday turned out as expected, but with a bit bigger range.

We got stopped out of GDX for a small loss.  The miners are really struggling here.  BIS was stopped out for a small gain.  I had my stops a bit too tight.  We also were stopped out of XIV and our UVXY put spread for a gain, and still in SSO, stop is now $62.90.

I placed a December future option put trade trade on last night for strike 2025, as I am expecting a retrace to the weeks begin before Friday close.  Above 2065 nullify's this thesis.

All NADEX trades posted finished True.

For today, we are stuck in a 20 point range.  If we break the downtrend line, then we are moving higher, if not, I am looking to retest the lows of the week by Friday.

All my trades are posted and recorded on Twitter as I take them or signaled from my system..

Recap and Look Ahead

Well I expected a reversal this week and was short volatility
(see  http://bobsstocksignals.blogspot.com/2015/11/thinking-out-loud.html) but not so quickly and violently, But in a unstable, low liquidity market run by automated trading is becoming the norm.  Having said that yesterday was a good day.

XIV's stop is now $28.08, trailing it now $.50.
We also entered SSO at $62.53, stop is now 63.25, trailing now $.50
BIS short at $32.50, stop is now $32.50, Trailing now $.50
GDX at 13.87, stop is 13.67.  Trailing $.20

NADEX long trade was a winner, as well.

For today, I expect consolidation, and maybe a pullback.  My target was 2060 for the week, and we hit it overnight.  If we blast through we are going to challenge new highs, if not watching for a trade back down to Monday's open, by Friday.

Will post new set up's as they hit my signal.  You can sign up on the right if interested.

Thinking Out Loud

I am looking at this selloff to abate this week, and a Thanksgiving Day rally to commence.  Then we sell off again into the Santa Claus rally, which gives way to selling into the New year.  I think we move down to 1760 area on the futures late winter before start a new rally phase.

Any break up from the down trend line says we start a more meaningful up move first.

If my scenario plays out we will have a great opportunity to buy XIV at a bargain of about $10, for a multi-month triple digit expected gain.

Daily Recap / Look Ahead

Yesterday was a mixed bag for me.  I had a good trade making $1.80 on IWM short, but jumped the move in miners and lost $.87 on DUST in the opening whipsaw.  The signal hit, and I took it.  It happens.

I also entered puts on UVXY for next Friday (28's).  I am holding them still .  My signal is max overbought and historically the mean reversion hits within 3-5 trading days.  I will add to and sell a put on the $26's by the end of the day.

For NADEX took one buy under the double bottom, (EOD 2051 )and stopped myself out at 2053.  I did not reenter another trade.

We had a move outside of the range and then a reversal.  I need to aggressively trade that failure, in this case, go short.

For today, it is likely we have an inside day.  We are still in a downtrend and we have been selling consolidating, selling, etc.  My view is we target 198 on SPY, and will short this next move higher into the 20 moving average (2 hour chart).

Update, if we open above 2040, I see us testing the overnight high, if not looking at the S1, at 2027 area.  I bought EOD 2025 for $81.  Will make additional trades after 10:30 EST.

Daily Recap

Today both NADEX EOD trades were positive for us.  I made a strategic shift to watching the first hour before entering.  We are getting a lot of trend and trend reversal trades vs the expected range bound trades.

I look at the first hour for my range and note if the Overnight range was taken out to guide my entries.

We exited the XIV long trade with a $.60 trailing stop profit.  We entered IWM short at 117.63, with a $.63 trailing.  Current stop is 117.76.

Thursday before OPEX is traditionally bearish, and we are sitting on the neckline of a Head and Shoulder top.  We fail, down to 2025-30 area, Pattern fails, then right back up we go.

Good night.

How to Use My Signals

Just a reminder on how to use my signals.

As I don't know how everyone likes to trade, and  mixing it up myself, I simply publish the buy and sell signal coming from my software.  You pick what you like to trade.

I use a 2 hour chart, and it is a combination of momentum, trend and position indicators that alert me to a trade.  Once the signal fires you have a number of choices.  Example; yesterday a buy on GLD and DUST fired.

I published the signal, the price at which it fired, and a stop and a trailing stop.  My stop is based on a ATR that matches my momentum look back, and I trail using the same level.  This way if we get a trend move, we can stay in the trade and profit from it.  If not, get out and move on to the next trade. Trading is a numbers game, and stops are critical, and is most traders Achilles heel (me too when I ignore placing them).  I won't publish when the stop loss hits though. (I can't capture it, and may not be in that trade), but if I publish a trade I take, I will publish my exit.

I like to use options, so I usually take a at the money strike, two weeks out, and us the stop as a guide to exit the trade.  Sometimes I will do a credit spread to capture income opposite of the direction of the signal (do that mostly with SPY and VXX), and another choice is to use the leveraged ETF's instead, like UVXY for a VXX signal, NUGT for GDX, etc.  Your choice.

For NADEX, I stop out if price hits my strike, as NADEX does not allow stop losses.

Finally, I am now comfortable enough with a sixty minute signal for SPX to recommend ES future options. More of a swing/Climate type of trade. Stay tuned.

Good trading

A Macro View

Well the final assault on Everest has begun.  2065 is the base camp, 2081 is the final sleeping area, and since we are at month end, and all earnings disappointments are being ignored, it is a safe bet we hit new highs within the week,

Then what?  The Fed is calling for rate hikes (won't happen), revenues and earnings will get worse for the fourth quarter, stock buy backs are reaching saturation, the Vix has one more good push down left in it, and the dollar's strength will continue to hurt U.S based multinationals.

Here are a couple of charts that suggest 2016 is in for a rough ride.  We simply are running out of oxygen.  I am asked if not stocks, where?  Well bonds, especially long bonds will make you money as the rush for safety gets going in earnest, cash is an option, as well.  Then when the Fed panics, gold and the miners.

For today, I am expecting a test down to support at 2081, and break the Globex lows, then a grind  higher into the close.I would be impressed if it broke the high though.  I remain short Volatility and Miners, and will buy 2081 on ES if I can get it.

For NADEX, I will grind out 6-7 trades again.  Yesterday we were perfect.  Enjoy

Back To Our Regular Programming

OK, Fed day is over, and for the next two weeks they get to pretend they are Monetary hawks.  Of course they will not raise rates in December, or ever.  But that is beside the point for trading in the moment.

As I said yesterday, stronger dollar, means stronger money flows into the country, and cheaper commodities.  The money flows will overwhelm the new risk models for buying equities for now, and stocks and bonds will remain bid.  Commodities on the other hand are in trouble.

For today, I expect an inside day and will look for one or two ES trades (watching the 64 High volume area) and trade NADEX two hour expiration s.

GLD, VXX and GDX are on my sell signal again, and am neutral on SPY, IBB, AAPL, and IWM Will post out any changes to that.

Melt up, The Dollar That is

Unless Yellen eases, the dollar keeps on rising.  This will support bonds, and be negative on commodities.  But I think it will be very bullish for SPX/ES.

The wild cards are how IWM and IBB play.  I am afraid I am getting the answer I don't want in IBB, and will have to concede defeat on any strength by the end of today.  The Russell however may have run its course, I will let the signal take me out.

For trading though.  I am keeping it simple.  If my view is right and confirmed by my signal I am long ES into Friday, and short UVXY with puts.

I am staying away from NADEX for now (EOD).

Same ole, Same ole

We are in the tight range waiting for our drug dealer to come out her meeting to see if there is any more crack available, or off to rehab.  Afterwards, things heat up though.

The dollar is firming, gold, the miners, natural gas, and oil are falling again.  Biotech can't participate in the rally, and in my view is very bearish.  Energy and commodities drove this bear rally, with the help of ever smaller Tech titans.  This up move has no dance partners left.

For today, I think we test the bottom of the range and end up at the pivot again.  So focusing on one good ES trade, and playing spreads on NADEX.

My signals are short GLD, GDX, and IBB.  IWM will join them today.  TVIX is still a long.

Good trading all.

Morning Update

ES hit a new high overnight.  Interestingly it hit before Europe opened, and failed on a retest of that high.  I set a short on NADEX at 2038 for the day.  If you can get more the 20 on another attempt at Globex highs this morning, that looks like a nice spot.

Gold and NUGT look ready to break down again.  Watching for the signal.

IBB is once again sitting its massive up trend line.  I am short with BIS, so watching to see if they squeeze me again here.

IWM and AAPL are showing buy signals for this morning.  Will see if they break out.  Also XIV is saying the same thing.  Watching.  This means TVIX long is not in the cards for now.

Weather Report

Ever since the Fed quit QE, the market has been oscillating based on OPEX.  Many sites have been remarking on this as of late (so probably will not work this month) but technical patterns, seasonal s, and trend-lines suggest we take the trade short.  Also, it looks likely that the market has readjusted back to levels prior to the we are going to raise rates meeting.  Now what, back into the old rectangle, or as I think we are now in this new lower rectangle.

I am short ES and Biotech, but there are many ways to play this whether you are a conservative or aggressive trader.

1. Short ES at the R1 tomorrow if we get there, or wait for Stoch/RSI drops below 80.
2. Buy November Week one puts, or spreads (consider buying the 80 delta, and selling the 40)
3. Inversely, sell a credit spread same strike, same deltas (selling 80, buying 40)
4. Buy TVIX
5. Buy BIS
6. Sell gold
7. Sell oil
8. Sell miners

You get my point.  Here are my charts

Gap Fill is Upon Us

I am likely to buy October week 4 puts on IWM and/or  Spy.  We are also very overbought, and we are going into the most negative seasonal period over the next seven days.

I will also close my VXX Calendar put spread today.

Patience

The Week ahead

OK, October is here, and this year will prove very interesting.  For me, I am getting defensive. Friday's ramp has given me the opportunity to move my Ultimate portfolio to 30% XIV and 70% SDS with the wind at my back, as I posted last week.

The seasonality tells us the early this week is positive, and then the next 10 trading days there is opportunity for a big selloff.

I think it is prudent to buy some puts next week for week 4 Expiry, and then get ready to short vol into Christmas.

Biotech is kissing the underside of its very large channel.  I will buy some BIS on a reversal.

Also, it is about time to short NUGT, and gold.  Then we can short DUST into Christmas.  Waiting for reversal signals

This will be a wild rocket ride this month.  Enjoy.

Trading my Signal

I have a very easy methodology for trading my signal

When you see a buy, whether for 1,2, or 4 hour (those designations are for the chart time frame) I buy the shares or I buy ATM calls, one to two weeks out.  You need to set your stop profit and loss.

For the sell, it is the reverse, with one exception.  For UVXY sell, you can buy XIV, SVXY, or buy puts, that are 20% out of the money at least 8 trading days but as close to two weeks out, as possible. I like to double my money, but will roll up my stop.  You must set those as your comfort level demands.

The hourly trades are 1-3 days tops, the two hourly is 2-4, and the four hourly is up to a week.

The UVXY/XIV trade is off the charts positive when back tested (triple digit plus).  The others will produce better than market returns.

I am working on a ES/SPY daily trade that is back testing very well.  I am developing with a partner, so it will be a separate charge when released.

Email me with specific questions.

Morning Update

No changes to my portfolios.  I am expecting an up day today, and until Thursday.  I am still holding my VXX October week 2 25 puts, and that is pretty much it.

For NADEX, the extreme move blew right through my buy price yesterday.  I will set today's trade after the market opens.

I am still of the opion the the rest of October will be pretty rough, and then we will get some epic buys in BIS and UVXY puts for our year end trades.

Morning Update

Sorry for the sabbatical.  I was travelling and my other business took off making my mornings a bit crazy and distracting.

I am switching my ultimate portfolio to max defensiveness on Thursday.  That means 90% SDS, 10% XIV.

The $50,000 to a million challenge is in cash, right now.

The hourly short vol trade is setting up for another short for Tuesday.

NADEX, waiting on the open to set my trade.

I am also looking to short gold this week for a trade.

Remember, look to short IBB, or go long BIS on any dip.  The Biotech bubble has burst, and it will drive the broad markets sown with it.  It has far to fall.

OK, The Big Week is Here

The Market Makers and Prime Brokers have positioned the index at exactly the 50% retrace level between the ATH's and the recent low.  Plus they gave us a head and shoulder or a ascending triangle pattern to decipher.  We are also cycling up on momentum, as volatility is slowly leaking back out.

For me, I am playing it with selling volatility, and will hedge it with ES short or TVIX if the Head and Shoulder breaks after Fed Day.  My view is that all the bad news is out, and China has signaled they will do whatever it takes to prop this market.  Japan, and Europe the same.  Even if the Fed raises rates, it is a known event.

So I suspect a pop, and then we wait for earnings season to start the gravity wave down again.  Potential upside is 2160, the downside is the lows.  Either way I suspect the move will be pretty big.

For Gold, it looks like a retest of the bottom of the descending triangle, and then off to $1050.  I will sell this rip unless it makes a higher high.

Deja vu.

Morning Update

Keeping it simple.  Trading GLD short. (GDX sell signal should hit today), Trading ES on the hourly, and shorting volatility when I can.

The ultimate portfolio is still at 50/50, and will remain so through next week.  The $50K to a $ 1million challenge is long SVXY from yesterday's open, and up very nicely.

NADEX short at 1963 just got clipped.

High potential we go back to the old highs.

Enjoy

Daily Update

Stilll holding to my three days up because China is not around move.  1978 area is a high volume area and a measured movefor ES.

For both portfolios, no changes.  Vol dropped nicely yesterday and my signal got us out of long and into short nearly perfectly.  Signal still says short vol, I may through some puts on, as well.  We'll let you know if I do.

NADEX spread was enjoying itself way out of the money but the 43 sucumbed to that incredible end of the day ambush.  The 13 was fine.  Will look to put on another spread today, after the open.

Finally gold is falling, I am still expecting 105 before my expiration.

Daily Update

Sorry for no post yesterday.  I literally traded all night, the night before and was too tired.  China has made the early overnight much more interesting of late.  Which brings me to me thoughts for the remainder of the week.  We will have three up days.  Why?  China is closed for a two day holiday, and our NFP report for Friday will be softer than expectations (statistically so) therefore the selling catalysts are absent.  So we go into a three day weekend of light volume that the algos can drive price higher, and test the courage of new shortsellers.

So, I am keeping my Ultimate portfolio at 50/50, and we will have a XIV buy signal at the open, so will be buying SVXY for the $50,000-$1,000,000 challenge.

I will close my TVIX at the open, and am still holding GLD puts for September, and will look at some GDX puts, as GDX is on a sell, as well.

For NADEX we bought the 1913 for the end of the day.

Weekend Update

The last two weeks are for the record books.  We had the biggest one day move in the Vix, and a 4.5 sigma move in SPY.  A 400 plus year event.  I suspect we are not down with the superlatives yet.  On Friday I got another buy signal on TVIX, and SPY/ES was stopped at some strong resistance areas.

My suspicions are that we have a cup formed, and a possibility of a move to 2017, or it fails here and a move back down to the lows until Fed day.  Pretty confident the highs are in for the year.

The portfolios were rocked.  They are not designed for such a move.  They will normalize after the Fed meeting. I am in cash on the 50K to a million challenge per the signal, and still 50/50 on the Ultimate portfolio.  The latter is now performing just under the SPY for the reporting period.

Our individual Option plays have done very well, and ES is being traded on 1,5,and15 minute now.

We only have a TVIX trade on, at the moment.  Staying very tactical for now.