Jump to content



Photo

ISA Trade Navigator for 8/18/04


  • Please log in to reply
No replies to this topic

#1 TTHQ Staff

TTHQ Staff

    www.TTHQ.com

  • Admin
  • 8,597 posts

Posted 18 August 2004 - 09:30 AM

ISA Daily Trade Navigator for 8/18/04

Posted Image


Message board sentiment has 39% Bulls, and 34% Bears. That's showing a good deal of confusion. So is the market. I'd like to see a whole lot of Bears on day soon, and then some more stubborn Bearishness on a bounce, to mark a more solid low. The Actual Position poll had 44% at least partially long and 28% short. There are 10.26% fully short. This shows a lot of acceptance of the rally. Normally, it wouldn't tell us much, but so little true commitment to the Bear case suggests more work to do on the downside.

The equity P/C ratio rose to 0.69, which is nothing dramatic. The Dollar-weighted P/C ratio rose to 0.73, which is neutral. The prior extra low reading may be weighing on the market. Then again, it's expiration week. The VIX dropped, and bounced off a trend-line. I'd like to see this spike higher, one more time for a good low.

LowRisk reported 22% Bulls, same as last week, and 52% Bears, up a tad from 51%. That supports a rally, but it has been. AAII reported 39% Bulls vs. 31% Bulls the prior week and 40% Bears, well up from 34% Bears last week. Investors Intelligence reported 48.4% Bulls down from 48.9% and 24.2% Bears, down a bit from 24.5%.

Rydex asset flows showed a $15MM shift into the Dynamic Bull funds and a large $40MM shift out of the Dynamic Bear funds. The overall fund shifts were largely out of the Bear funds and into the Bull funds with more money flowing out of the Bear funds, but Titan fund showed a loss of Bullish assets too. The Nasdaq funds are showing a sharper shift to Bullishness. The data is a little bit short-term Bearish, but otherwise, relatively benign.

Posted Image

The Senticator is bullish, so the model went long. Yesterday threw me off my original scenario of a rally, failure, rally sequence prior to a sustained advance. It now looks like we'll get it, thanks to rising Oil. Things can still get ugly in here, but the RSO and the $-weighted P/C ratio have both set us up for a nice rally. We had a Buy trigger, but the trend turn has not been confirmed. I'll say this, Oil is weighing on the market. When it turns, the shorts are going to cover fast and we're going to get a big rally. My looked-for sell-off may have started yesterday afternoon, so if we're back on track, today ought to be down, and we may set up a much better low. This chop is typical of a bottom being formed. It's likely to continue to be confusing for a bit. Turn the trend, though, and this pig should run much higher.

The Mechanical Senticator trading model went long at 107.14, or better. Stop this at 105.00. Target 109.25. The Subjective model went long half at 108.72. Double up at 107.10. Stop at 105 (we'll snug this up tomorrow).


Not everyone can use a short-term trading model, and many folks would like something that hangs onto bigger moves and reflects a less frenetic trading pace. If you want to know how I would trade based upon the big picture and the sentiment, the following tracking portfolio is it.

*****************
Ideal ETF Portfolio (track this):

75% Cash
25% long the QQQ at 33.10.

We covered our 50% Short SPY position at 108.75. We were short from 110.80 and 111.30. That's a decent trade, all things considered. Pity we missed our limit.

Buy another 25% long position in the QQQ at 32.70 or better.



Past performance is no guarantee of future returns. All information included in this missive is derived from sources we believe to be reliable, but no guarantee can be made to that effect. None of the forgoing should be construed as an offer or solicitation to buy or sell any security. The publisher may have a long or short position in the funds or securities discussed at any given time. We aren't your advisor, unless you have a signed contract with us. Please review any trade that you do with your trusted advisor FIRST.



http://www.equitygua...oup.com/nav.htm

For more on using the ISA and the various sentiment poll data, click here:

http://www.equitygua....com/isanav.htm

Posted Image

Mark Young
Editor



About Equity Guardian Group and Our Market Timing:

Equity Guardian Group, LLC. publishes The Guardian Checklist (an options, futures, general timing and mutual fund trading letter), and The KTT E-mini (and Day Trading) Service for more experienced traders.

The Guardian Checklist is a service designed to allow traders to quickly evaluate the current condition of the market, and to structure their trading appropriately.

The KTT E-mini Service service provides traders with specific action oriented trading recommendations for the E-mini as well as the SPY.

Mark Young is the publisher the Guardian Newsletters, as well as Director of Research for Equity Guardian Group, LLC. He is the creator and director of Traders-Talk.com, a free online community and resource for traders and investors. He has been an active investor in equity and options markets since 1983, and has been publishing his unique research and trading services since 1992.

As an early trader in the then nascent OEX Index Options markets, he developed considerable options expertise, trading hundreds of contracts controlling millions of dollars worth of equities for his personal account. Prior to founding his own advisory firm in 1991, Mr. Young was an Investment Broker with Legg Mason Wood Walker, Inc. Mr. Young has a degree in Economics from Northwestern University.

SUBSCRIPTION INFORMATION
We offer 2 week FREE TRIALS

The Guardian Checklist is a daily newsletter for options, equity, and mutual fund traders. It is invaluable as background for daytrading, as well. Market timing and strategies are provided for Intermediate-term traders, Short-term position traders, and day-traders.

In addition to our indicator run down, specific option recommendations are provided in our model options account. Mutual Fund traders have three fund trading models to choose from.

Prices:

The Guardian Checklist
Monthly $99, Quarterly $250 (reg. $270), Semi-annually, $450 (reg. $500), Annually $750 (reg. $1,000).

The KTT E-mini Service add-on:
$50/month over and above your current Guardian Checklist subscription level.

The KTT E-mini Service
(includes Day Trading Services as a special bonus):
1 month: $150, 3 months: $325, 6 months: $600, 1 year $1,099.


Tailored Institutional Research is also available.


Direct questions and subscription requests to: Mark Steward Young by email MYoung@EquityGuardianGroup.com Or call us during business hours at: (859)393.3335.