New Signals
VXX Hourly Trend Model———->SHORT
NASDAQ Hourly Trend Model—–>LONG
SPX DailyTrend Model————–>LONG
UUP Daily Trend Model————->SHORT
CME Daily Trend Model————->LONG
Weekend Market Analysis
Stock Indices
The SPX reversal to Long suggests a market that may be in transition from Short to Long. Yet as illustrated in the charts below, both Nasdaq and the Russell 2000 indexes are solidly in Bearish mode. Thus, the overall market is “mixed” by any standard. With critical news from Europe coming on Sunday night and Monday, the market shouldn’t be mixed for very long. Expect a dynamic directional trend across all markets to make itself clear by the end of next week.
Individual Stocks
Despite CME reversing Long on Friday, 17 of the 19 stocks in our Stocks Portfolio are still on Short signals, with the average gain on all stocks, Long or Short, is +11.73%. Option players should be looking at close to 100% gains on your 2-3 month to expiration positions, while those who are trading just a diversified portfolio of 3 or more stocks are sitting on very nice gains considering the relatively fresh signals.
Commodity ETF’s
In the Commodities Portfolio, two ETF’s stand out: SLV which is up 12.96% and USO which is up 19.37% Those using 2X leveraged ETF’s to trade these are up about 25% and 40% respectively. Those trading 2-3 month-to-expiration options are easily up 100% on those trades.
These combined returns on SPX, Individual Stocks and Commodity ETF’s illustrate why I recommend a diversified approach to trend following. A portfolio that covers each category with at least one Stock Index, two or three Individual Stocks and one to three Commodities is the best way to take advantage of these profitable trends. Trading only one stock or ETF can easily turn into a frustrating experience while you review the updated Trend Table and see all of these positive returns week after week. Carefully study the Trend Table this weekend and observe all of the positive returns in the list as a whole, how they are spread across each of these sectors and craft a trading strategy to take advantage of the best this service has to offer.
One way to achieve diversification with a more personalized and hands-on trading regimen is to take advantage of the expanded coverage in the Premium Trading Service. Yes, it is an additional cost each month, but it possible make 4X the monthly fee on just one successful trade. The service also provides additional commentary, expanded coverage of Hourly and 240 minute trading models not covered in the regular service and includes updated trading charts in real time throughout each market session. Those who have been with me since the start in 2004 know that I am not a hard sell kind of guy and that I do have some altruistic motives (as well as monetary) in providing this service. If you want better returns from your trading or sometimes need that extra push of confidence to make a trade, try the expanded service, if even for just one month. In the three months I have been offering the Premium Service, only one Premium subscriber has cancelled. That is about the best testament I can provide.
The regular add-on fee for the Premium Alert Service is $249/mo. I am again offering it to current subscribers for $199/month. There is no long-term commitment, you can cancel at any time. Link to sign-up to Premium Service.
Market Charts
Nasdaq Daily Trend Model
If this were the only market timing chart you followed, not only would you be sitting with nice gain, but with Nasdaq approaching a Fibonacci 38% retracement, you would be getting ready to add to your short on any meaningful turn down. To call the trend of the overall market “mixed” at this time would be an understatement.
IWM Daily Trend Model
IWM is another chart reflecting the mixed character of the market. It’s hard to imagine any significant market turn-ip while the Nasdaq and the Russell are showing such poor relative strength. It certainly is easier to move (read: manipulate) 30 stocks (DJIA) than 2000 (IWM).
USO Daily Trend Model
USO is an example of a commodity ETF with highly liquid and leveraged ETF’s along with heavily traded options.
SLV 240 MInute Trend Model
SLV 240 Minute is part of the expanded coverage in the Premium Service. Not all models lend themselves to these kinds of trades, but the ones that do are well worth the additional time and effort.
GS Hourly Trend Model
GS seems to work well in all time frames. Here is an example of how trading an Hourly Trend Model can be highly profitable, yet without a whole lot of in-and-out trading.
NFLX Daily Trend Model
NFLX was up over 3 points on Friday (5%). But the NFLX Daily Trend Model has been Short since early March for a gain of close to 40%. As I wrote when I introduced NFLX into the Individual Stocks portfolio, some stocks do trend better than others and NFLX is certainly one of them.
TREND MODELS
Trend Models, June 16, 2012