Bear Cave 2 (Bull Allowed)

[robo]

Good point. The last few major declines have come in that best six month period. Late 2018. Early 2020, and now late 2021 / early 2022.

A historical chart worth looking over 1929-1932: Note the RIPS and DIPS.....

 

[robo]

The Sky Is Falling
Posted on January 22, 2022

Stocks closed below the previous DCL on Thursday to form a failed daily cycle.

Stocks continued lower on Friday to close below the 200 day MA. Friday was day 32, placing stocks in their timing band for a DCL. A swing low and recovery of the 200 day MA would signal a new daily cycle. Stocks are currently in a daily downtrend. They will remain in their daily downtrend unless they close back above the upper daily cycle band.
https://likesmoneycycletrading.wordpress.com/2022/01/22/the-sky-is-falling-2/

 

[robo]

Sentiment Sanity: The Goldman one does NOT scream buy

It moves in mysterious ways...The Goldman Sachs "Sentiment Indicator" measures stock positioning across retail, institutional, and foreign investors versus the past 12 months. Readings below -1.0 or above +1.0 indicate extreme positions that are significant in predicting future returns.
https://themarketear.com/

 

[robo]

Cycles: This call looking pretty good so far.....

https://www.youtube.com/watch?v=GW3PO2G2Fu0&t=4s

https://blog.smartmoneytrackerpremium.com/

 

[Bullitt]

I like Vanguard and unlimited moves, but I have a trading system and indicators I use for buy and sell signals. I also use Risk Management..... I told you when I first got unlimited moves I went from the frying pan right into the fire. Sometimes having only two moves will save you money.

Great words and a concept that so few will ever grasp. Beating a benchmark is hard - with luck playing a larger part than anyone is willing to admit. There will always be a bell curve of random returns. Not a day goes by on this forum when people complain about not having daily moves. Back when we did, people still complained and blamed their woes on the noon cutoff.

 

[Guest]

I have a TD ameritrade account. My original plan was just to invest in low fee ETF's, VOO, VXF, etc... More or less run it just like my TSP account.


Feel's like there is not a good place to invest in right now. I did follow your gold miners stock, cashed out for a 7% gain the day it went up big. Thanks for that. Bonds are losing money, Market is in a bear cycle. Guess Cash only safe place as of now. Is there any ETF that is like the G fund(no risk but gets a 1%-2% return)? Anyways appreciate you posting all the time, feel like you're really experienced and know what you're doing.

 

[robo]

I have a TD ameritrade account. My original plan was just to invest in low fee ETF's, VOO, VXF, etc... More or less run it just like my TSP account.


Feel's like there is not a good place to invest in right now. I did follow your gold miners stock, cashed out for a 7% gain the day it went up big. Thanks for that. Bonds are losing money, Market is in a bear cycle. Guess Cash only safe place as of now. Is there any ETF that is like the G fund(no risk but gets a 1%-2% return)? Anyways appreciate you posting all the time, feel like you're really experienced and know what you're doing.

I think your plan is a good one, but when to buy and how much ( Risk Management) is where trading gets tougher. If you use the 3 ema and the 10 sma on the daily chart then my system remains on a sell position and hold cash. I also use cycle indicators.

However, I also trade using other indicators which in more like gambling. Lower BB tags, oversold conditions, DCL's, etc.

My current positions are VXF, SSO and they are are currently down. Why? Because I'm counter-trend trading in a market moving down and guessing when it will turn. This is why it's so important to keep trades smaller. I'm still adding shares and will do so again today. Why? Because I "THINK" we are close to an ICL. Brother my position size for this trade is still under 10%. I will place new positions once we hit an ICL and we move back above the 3 ema and it is confirmed by the 10 sma.

Bottom Line: The trend remains down and placing trades means you are guessing on a turn. That works well in a Strong Bull Market (BTD) but not very well in a market moving lower for many days. VXF will be down over 20% with this morning's gap down. I will be adding to my VXF and SSO positions this morning because I still haven't hit 10% total.
My point is placing ( counter-trend big trading bets) is no more then gambling and I have several indicators to place my trades. ( Which are no more then BETS)

The safe trade will be to wait until we move back above the 3 ema, confirmed by the 10 sma, on the daily. That should get us a DCL. So look at the charts below and tell me when you would have bought? If you are gambling like me I used my indicators and placed a trade, and SO FAR I'M wrong.

Placing large bets in a market like this one can be an account killer.

I will let you know what I'm doing, but I have PLENTY of losing trades.

Long VXF, and SSO. Adding this morning and it's a counter-trend trade. Some are already 100% long the S Fund so they can NOT add. That was my point on unlimited moves. When will you buy and sell? I will be placing my next positions for the S FUND once we get a move back above the 3 ema and confirmed by the 10 sma. I tried two moves using some of my other trading indicators, but the market kept moving lower. I will be looking for a confirmed DCL and and possible ICL or YCL to add when I get my next two moves which will be next month. So like many other's I'm riding the index down in an ugly move and unable to add. Using a trend trading system only I would still be in cash.

I will keep you posted, but this year is not going to be as easy to trade.

Long SSO, and VXF Brother and I just added some shares with the gap down. I placed limit orders before the open.

 

[robo]

Babkock,

"I have a TD ameritrade account. My original plan was just to invest in low fee ETF's, VOO, VXF, etc... More or less run it just like my TSP account."

Brother I'm not giving you trading advice, I'm just pointing out what I do. If it's NOT some type of IRA...Roth etc...... You will have to pay short-term capital gains on all your trades if you trade the indexes often like I do. You will also run into Wash Sale Rules. Look up the rules for LT capital gains. LOL..... All my trades are going to be short-term capital gain trades. That is why it's best to use a Roth IRA.

Keep that in mind Brother if you opened a non IRA type account.

What Is the Wash-Sale Rule?
The wash-sale rule is an Internal Revenue Service (IRS) regulation that prevents a taxpayer from taking a tax deduction for a security sold in a wash sale. The rule defines a wash sale as one that occurs when an individual sells or trades a security at a loss and, within 30 days before or after this sale, buys a "substantially identical" stock or security, or acquires a contract or option to do so.


A wash sale also results if an individual sells a security, and the individual's spouse or a company controlled by the individual buys a substantially equivalent security.


KEY TAKEAWAYS
A wash sale occurs when an investor sells or trades a security at a loss, and within 30 days before or after, buys another one that is substantially similar.
It also happens if the individual sells the security at a loss, and their spouse or a company they control buys a substantially similar security within 30 days.1
The wash-sale rule prevents taxpayers from deducting a capital loss on the sale against the capital gain.

 

[robo]

IWM and VXF daily: Both down over 20% from their November highs.

Long VXF and SSO and both remain losing trades. Keep in mind I'm still under a 10% position in my trading accounts. I think lots of sell orders came in this morning from some investors throwing in the towel.

VTI daily: The Total Stock Market at Vanguard. That would be a mix of C and the S funds. A huge move below the 200 sma on the daily in a very short time. I think some are saying - Just get me OUT! That is why the cycle dudes call it the Blood Bath Phase.

 

[robo]

SPY/SSO/SDS daily: If you are long SDS you are doing well! I don't short a market this oversold even though it could move lower. Risk Management..... Risk/Reward!

 

[robo]

SPY/VXF and VTI daily charts: Buyers coming in...We shall see how we close...

Bottom Line: The trend remains DOWN for all 3 of these indexes..... Which covers the Total Stock Market.....

 

[robo]

GDXJ daily: I bought GDXJ under $40.00ish again, and some shares of JNUG and NUGT after tagging the lower BB. Small positions for NUGT and JNUG..... I trade based on the no leveraged charts for all trades. I use GDXJ and GDX, NOT JNUG or NUGT. I have been trading GDX around $30.00ish and GDXJ around $40.00ish, but I sometimes buy some shares of the leveraged indexes for a ST trade.

I can how it sucks that those in TSP can not add. However, if you had unlimited moves, and you are taking/placing 100% moves that how would you have down in this down trend. If you placed 5 10% moves counting todays beat down you would still have a 50% as you waited for the next buy signal to complete your position.

I would NEVER go a 100% on any trade and try to scale in using much SMALLER tranches. That is something you just CAN'T do at TSP.

I'm going to try some data using the weekly charts and see how that plays out.

 

[robo]

VTI weekly: If you were using the weekly chart and the 10 sma weekly data for BUY and SELl signals this would be week 4 since the SELL signal. I use the 3 ema and the 10 sma on all my charts for trading signals. Sure, I get whipsawed, but the idea is to catch 80% of the big trending moves up and miss 80% of the big moves down. As you can see on the weekly chart there are times you are going to get whipsawed as you try and catch the next ICL or YCL. These bottoms normally result in a very nice solid trend that lasts months. That is why I track cycles..... One should use caution when placing big bets if the IC or YC is extremely stretched.

For The record: I trade the daily cycles most of the time, and that would be tough using a TSP account.

I point all this out because I have been asked by other TSPer's with a private message about how I trade. I just wanted to clear things up for anyone else reading other my Market Thoughts. I'm telling you what I'm currently doing based on my lessons learned, and what I'm doing. I'm not recommending to anyone how to invest or trade. There is NO SUCH thing as a perfect trading system. I have said before that I think the easy money has been made and one should use extra Risk Management going forward. This is NOT last years market. I think those BTD are finding that out already and it's very early in the year.

Bottom Line: Using the weekly data and TSP would work well with only 2 moves a month MOST of the time. Back Test the data for yourself. There are some really good paid services here at TSP that would also work well based on the returns I have seen.

So my point again, is not the number of moves you have, but how and when you make them. Taking the emotion out of your trades and using Risk Management is what I was trying to point out.

READ EVERY ARTICLE from FRANK at the link below, and you will know where I got some of my Market Timing Tools. I will finish this some other time. Again, this is what I do and I'm not saying it's for you.

Investor or Trader... Which Are You?

Most market participants consider themselves to be "investors." But if you look at a list of the really big winners on Wall Street, you will see that most of those who make big profits, list themselves as "traders."

By "big profits" we mean doing better than the S&P 500 Index or Nasdaq 100 Index by a substantial margin over any three-year period.

Investors

"Investors" put their money into stocks, real estate, etc., under the assumption that over time, the underlying investment will increase in value, and the investment will be profitable.

Typically, investors do not have a plan for what to do if the investment decreases in value. They hold onto the investment in hopes it will bounce back and again become a winner.

Investors anticipate declining markets with fear and anxiety, but unfortunately, they usually do not plan ahead of time how they will respond to them. When faced with a declining (bear) market, they hold their positions and continue to lose.

We all know investors. In many cases it was us before we realized how dangerous buy-and-hold investing could be to our savings.

Investors often have some knowledge of trading. But that knowledge is tainted by how it is all too often described in the financial press. Trading is risky, dangerous, foolish, bad, involves a great deal of work, etc. On the other hand "investing" is good, reliable and safe.

Investors had a taste of what buy-and-hold can do to their capital in the 2000-2002 bear market. They lost again in the 2008-2009 bear market, and again in 2020.

Traders

On the other hand "traders" take a proactive approach to their investing. Traders have a defined plan and invest with one goal, to put their capital into the markets and "profit."

They "trade" with a plan that tells them what to do in any situation. When to enter and when to exit. They never allow large losses.

Being a trader does not mean you must move in and out of the markets frequently. This is a common misconception. A trader simply is one who has a plan for entering and exiting. They know what to do if their trade goes against them, and they know what to do when their trade is profitable.

Some traders go short (take bearish positions) as well as long (bullish) positions. Some are unable to go short, or they find short positions to be uncomfortable. Probably the majority of traders do not ever take short positions.

But traders "do" have a plan. This is where they differ from investors.

Every Trader Needs A Trend

If you think about it, you will quickly realize every trader needs a trend to be successful.

No matter what trading method is used, whether it is pattern trading, swing trading, long term buy-and-hold investing, fundamental analysis, technical analysis, buying or selling on news events, IPOs, splits, you name it. If the stock or mutual fund does not trend in the required direction after the trade is made, you cannot be profitable.

This also applies to all asset classes. Stocks, bonds, currencies, commodities. You must have a trend to profit.

Putting Trader & Trend Together

There are two major camps when it comes to deciding what method to use to plan a trade. There are those who follow a fundamental analysis approach and those who follow a technical analysis approach.

Traders use both methods to "forecast" future market direction. If combined with an exit strategy, either can be successful, but debate has raged for 30 years over which is the most successful strategy, as well as whether either method truly "outperforms" the markets over time.

Some very astute market players have said that both fundamental and technical analysis approaches, though they can be profitable, usually are "no more profitable than an index fund."

There is a scary thought. All that work when an index fund could do as well?

"Price is always right. If prices are moving up, the markets are advancing. Down and the markets are declining."
But there is another approach that is almost never discussed. Many hugely successful traders use it though the financial press seldom mentions it. In fact, many who use it are very quiet about their successes. They do not try to publicly prove themselves right, they just trade and make money.

This approach is the use of price to determine trends. Price does not forecast and it does not predict. Price is always right. If prices are moving up, the markets are advancing. Down and the markets are declining.

At Fibtimer we are "trend followers." We respond to what "is" happening instead of predicting or forecasting what might happen. We "follow" price and allow the changes in price to tell us "when" to enter or exit a position.

Using price to determine trend does not allow trend traders to enter at the exact bottom, or to exit at the exact top. In fact, trend traders do not try to forecast the market, but instead let the market tell them when to trade and in what direction.

Trend traders wait patiently for prices to tell them a trend has begun. Then they jump on board. If the trend fails, they exit quickly to control losses. Price tells them when to enter "and" when to exit. If the trend continues, trend traders have no predetermined profit goal. They stay with the trend until it reverses.

Cutting losses quickly and staying with a trend until it ends is how trend traders realize huge profits in the financial markets. The financial markets are trending "about" 80% of the time. That means trend traders are profitable 80% of the time. During the other 20% trend traders keep losses very small so that they are ready when the next trend starts.

This does not mean 80% of their trades are winners, just that they are in the plus column for that 80%. If you have three losing trades of 2% and one winning trade of 18% in a year, you finish with a 12% gain, even though most trades were losers. This fits the old saying, "cut your losses short and let your winners run."

Conclusion

Remember that "price" is determined by millions of investors and traders.

By using price, trend traders take advantage of the combined wisdom of millions of investors and traders to trade a successful and profitable market timing strategy.

Yes, it takes patience to be a successful trend trader. Yes, it takes discipline to follow the strategy and make the trades, which many times go against the prevailing wisdom. This is true of "all" winning market strategies.

But trend traders who use price to determine trends have been quietly "beating" the markets for many years. They will quietly continue to do so for many more.
https://www.fibtimer.com/about/prior_commentaries.asp

 

[robo]

VTI weekly: I use the closing prices for trend-trading not the inter-day real-time prices like my trading account. It's week 4 since the last sell signal using the weekly trend trading chart. I use the daily charts for ST trading..... Those charts can NOT be used with a TSP account with only two moves a month based on the daily closing price. Man does that really SUCK! Again, I use the TSP for G Funds and sometimes I will move funds into an index fund at extreme oversold levels trying to catch an ICL or a YCL. When you are close to 70 you should have a nice chunk of your funds an accounts that are lower Risks. Well, that is what I'm doing.....

Take Care!

 

[robo]

SPY daily chart: Chart is after the close..... Will shall see if we get some follow through tomorrow, and an ICL in the days ahead. Also, I will be looking to read what the cycle dudes come up with.... One day does not make a trend, but lots of shorts got stopped out today. I would like to see the SPY move back above the 3 ema and test the 10 sma on the daily chart this week. I use the closing prices. Some folks here mentioned the PPT was at work today......
https://www.tsptalk.com/mb/day-to-day-market-talk/31405-plunge-protection-team-literally.html

LOL..... You can bet the Fed was getting worried with the ugly gap down we had this morning!

 

[robo]

SPY daily volume: This was the highest volume day since the March 2020 beat down volume. We shall see how this works out! We had several ugly high volume sell-off days before we started seeing up volume days like today. I don't know how tomorrow will work out, but a nice move up none the less..... I think we will see more of these type moves this year.

We shall see!

thomas
@VolumeDynamics

4h
FWIW.... $NASDAQ VOLUME 4.5B here - so the case can be made for "capitulation" levels.
https://twitter.com/VolumeDynamics

 

[robo]

SPY daily: We still can't rule out that this was just a short-squeeze before the next move down..... We should know in the next few days if this was indeed an DCL and maybe an ICL....


SPX cycle dude:

Buy Signal
Posted on January 24, 2022

Stocks formed a bullish reversal on Monday.

Monday was day 33 for the daily equity cycle, placing stocks in their timing band for a DCL. We will use a swing low and a close above the 200 day MA as our signal that Monday was the DCL, using the 200 day MA as our stop.

 

[robo]

Fed Speak is up next: Buckle up! How many rate hikes are coming this year to handle inflation..... I think the Fed may have bigger problems. How do they reduce their balance sheet that BLEW THIS BUBBLE UP SO BIG? Hmmmmm.......


A bear market is a marathon, not a sprint.


The average true U.S. equity bear market lasts about two years or 104 weeks. So far the current bear market has been around for three weeks. So if you've been staying up past midnight figuring out what to do the next day, and you've been cutting back on meals and exercise because you're spending all day trading, then the past few weeks will be repeated a total of 35 times. By the time the bear market is over, regardless of how much money you've made or lost, you'll have to be carried out on a stretcher. You should be gradually adding to the most compelling bargains into the most extended weakness and otherwise not trying to be an intraday hero or pretending you can divine what the market will do over the next day or hour. Save the fortunetelling for Zelda, the woman who runs the place in the basement with a neon sign with a special introductory offer of five dollars.

Kaplan

https://truecontrarian-sjk.blogspot.com/

https://twitter.com/TrueContrarian?ref_src=twsrc^google|twcamp^serp|twgr^author


Key Decisions for Balance Sheet Reduction
Goldman weighs in on the most important "reduction" of this bull market...

How do we take the BS down to $6 trillion?
Goldman has the FED balance sheet to decline from $8.8tn to $6.1-6.6tn over 2-2.5 years.
https://themarketear.com/

 

[robo]

Fed Speak is up next: Buckle up, and how make rate hikes are coming to handle inflation..... I think they have bigger problems...


A bear market is a marathon, not a sprint.


The average true U.S. equity bear market lasts about two years or 104 weeks. So far the current bear market has been around for three weeks. So if you've been staying up past midnight figuring out what to do the next day, and you've been cutting back on meals and exercise because you're spending all day trading, then the past few weeks will be repeated a total of 35 times. By the time the bear market is over, regardless of how much money you've made or lost, you'll have to be carried out on a stretcher. You should be gradually adding to the most compelling bargains into the most extended weakness and otherwise not trying to be an intraday hero or pretending you can divine what the market will do over the next day or hour. Save the fortunetelling for Zelda, the woman who runs the place in the basement with a neon sign with a special introductory offer of five dollars.

Kaplan

https://truecontrarian-sjk.blogspot.com/

https://twitter.com/TrueContrarian?ref_src=twsrc^google|twcamp^serp|twgr^author


Key Decisions for Balance Sheet Reduction
Goldman weighs in on the most important "reduction" of this bull market...

 

[robo]

Gold Miners daily: Buying some shares of EQX again for a trade..... Maybe making another higher low??? We shall see..... Waiting to see what the market does based on Fed Speak....