Posted 10 January 2010 - 07:48 PM
TheStock Barometer is myproprietary market timing system. Thedirection, slope and level of the Stock Barometer determine our outlook. For example, if the barometer line is movingdown, we are in Sell Mode. ABuy or Sell Signal is triggered when the indicator clearly changesdirection. Trend and support canoverride the barometer signals.
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EQUITY PUTCALL RATIO CHART
TheCBOE put/call ratio is comprised of two sets of data; equity optionsand index options. The index componentcontains items that are used as a hedge, thereby distorting thecorrelation and interpretation of the indicator. Weuse the equity put/call ratio. This is oneof the most accurate read of investor's fear and complacency and thusan accurate contrarian view of the market.
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TRIN/ARMSCHART
Thearms index or also referred to the Trading Index or TRIN for short, isa measure of the ratio of up stocks and down stocks divided by theratio of up volume and down volume. OurSpread Chart converts the arms index data into momentum Buy and SellSignals.
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TICK CHART
Thetick index is represents the sum of all stocks ticking higher minus allstocks ticking lower (a stock is said to be trading on an up tick whenit trades at a higher price than the last sale). It'sutilized as a day trading tool as it gives you an up to the second readof the intensity of buying and selling.
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BREADTH(ADVANCE - DECLINE) CHART
Eachday several thousand stocks either advance, decline or remain unchanged. The number of advances and declines normallyranges from +2500 to -2500. A high numberof advancing stocks normally marks a top just as a high number ofdeclining stocks normally marks a bottom. Monitoringthe 5 and 13-day moving averages of this allows us to better predictfuture prices.
Lynn T’s 1-2-3 PLUS alert
Providesbuying and selling advice with 1/3 Index positioning for trends
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VXO CHART
TheVIX is a measure of volatility on options pricing. We use the old VIX, which is now called the VXO. The higher the volatility, the more likely the market is closeto a bottom, as traders are willing to pay more premium for puts, whichact as Insurance on their long positions.
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PotentialCycle Reversal Dates
2010Potential Reversal Dates: 1/19, 1/28. We publish dates up to 2 months in advance.
We see a move higher into 1/19, then a retracement into 1/28.
Mytiming work is based on numerous cycles and has resulted in the abovepotential reversal dates. They'repredictive and have nothing to do with the barometer cycle times. Due to their accuracy in the past, I post thedates here.
2009Published Reversal Dates: 1/20, 2/11, 3/7,3/15, 4/8, 4/16, 4/27, 5/7, 6/8, 7/2, 7/17, 9/14, 10/10, 10/24, 11/12,11/30, 12/9, 12/21, 12/29. 2008 PotentialReversal Dates: 12/31, 1/11, 2/1, 2/13,3/6, 4/5, 4/22, 5/23, 6/6, 6/27, 7/13, 9/2, 10/3, 10/22, 11/10, 12/11. 2007 Potential Reversal Dates: 1/10, 1/14, 1/27, 1/31, 2/3, 2/17, 3/10, 3/24, 4/21, 5/6, 6/15,8/29, 10/19, 11/29, 12/13, 12/23, 12/31, 1/11/08. 2006potential reversal dates: 1/16, 1/30, 2/25, 3/19, 4/8, 5/8, 5/19,6/6(20), 7/24, 8/20, 8/29, 9/15, 10/11, 11/28. 2005Potential reversal dates: 12/27, 1/25, 2/16, 3/4, 3/14, 3/29, 4/5,4/19, 5/2, 6/3, 6/10, 7/13, 7/28, 8/12, 8/30-31, 9/22, 10/4, 11/15,11/20, 12/16.
StockBarometer Buy AndSell Signals
QQQQor SPY Chart: A chart is provided in every bi-weekly report and showsthe barometer Buy and Sell Signals (which are provided in my morningupdates) as well as showing the next highlighted 'reversal' window. The numbers adjacent to the buy and sell signalsare the number of days between signal (cycle time).
Here are 2009's buy and sell signals for the Stock Barometer.
| Buy | 5 | 11/25/08 |
| Sell | 66 | 1/30/09 |
| Buy | 7 | 2/6/09 |
| Sell | 24 | 3/2/09 |
| Buy | 8 | 3/10/09 |
| Sell | 58 | 5/7/09 |
| Close | 26 | 6/2/09 |
| Buy | 23 | 6/25/09 |
| Sell | 14 | 7/9/09 |
| Buy | 4 | 7/13/09 |
| Sell | 17 | 7/30/09 |
| Buy | 24 | 8/23/09 |
| Sell | 9 | 9/1/09 |
| Buy | 6 | 9/7/09 |
| Sell | 17 | 9/24/09 |
| Buy | 12 | 10/6/09 |
| Sell | 21 | 10/27/09 |
| Buy | 9 | 11/5/09 |
| Sell | 14 | 11/19/09 |
| Buy | 32 | 12/21/09 |
| year end. | 10 | 12/31/09 |
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MoneyManagement & Stops
To tradethis system, there are a few things you need to know and address tocontrol your risk:- Thissystem targets intermediate term moves, of which even in the bestyears, there are usually only up to 7 profitable intermediate termmoves. The rest of the year will beconsolidating moves where this system will experience small losses andgains that offset each other.
- Thissystem will usually result in losing trades more than 50% of the time,even in our best years. The key is beingpositioned properly for longer term moves when they come.
- Thereforeit is vitally important that you apply some form of money management toprotect your capital.
- Tradinga leveraged index fund will result in more risk, since you cannot setstops and you cannot get out intraday.
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Accordingly;- Makesure you set your stops so that you can lose no more than 2% per trade(based on the QQQQ if you're trading leveraged funds and options withour trading service).
[/list]
Usethe following spread/momentum indicatorsto assist in your trading of the QQQQ, GLD, USD, USO and TLT. They are tuned to deliver signals in line withthe Stock Barometer and weuse them only in determining our overall outlook for the market andfor pinpointing market reversals. Thelevel, direction, and position to the zero line are keys in theseindicators. For example, directiondetermines mode and a buy signal 'above zero' is more bullish than abuy signal 'below zero'.
GoldSpread Indicator (AMEX:GLD)
Wantto trade Gold? Use our signals with theGold ETF AMEX:GLD. Gold gives us a generalgage to the overall health of the US Economy and the markets.
US DollarIndex Spread Indicator (INDEX:DXY)
Wantto trade the US Dollar? Use our signalswith the Power Shares AMEX:UUP: US Dollar Index Bullish Fund andAMEX:UDN: US Dollar Index Bearish Fund.
BondsSpread Indicator (AMEX:TLT)
Wantto trade Bonds? Use our signals withLehman’s 20 year ETF AMEX:TLT. Thedirection of bonds has an impact on the stock market. Normally, as bonds go down, stocks will go up and as bonds goup, stocks will go down.
OIL SpreadIndicator (AMEX:USO) [color= red;][/color]
Wantto trade OIL? Use our signals withAMEX:USO, the OIL ETF. We look at theprice of oil as its level and direction has an impact on the stockmarket.
Stock BarometerPremier Membership
Receive 5Newsletters, including the Daily Stock Barometer, Stock OptionsSpeculator, QQQQ/Rydex Trader, Market Chat & Explosive Stock alertFOR ONE LOW PRICE.
Summary& Outlook
We remain in Buy Mode, looking for a move higher into 1/19.
This coming Friday is options expiration. The markethas a way to reverse on those dates. Given that and our keyreversal date, I’d expect the move higher to continue into Friday orthe following week.
Welcometo the biweekly stock barometer. Thisarticle comes out every 2 weeks and gives our big picture view of themarket. If you're interested in followingour signals and learning more about our system, then I invite you to click here and subscribe to thedaily service - since the market can turn on a dime andso too can our interpretation as the market gives its daily clues tothe future. Also sign up for our free weekly newsletter, where weprovide alerts from our various traders.
Wealso offer a dailyblog and you can follow our blog posts on on Twitter and on Facebook. We also offer a free weekly indicator chart ifyou visit our home page and scroll to the bottom. Thischart will be updated each week, so be sure to check back frequentlyfor updates. [color= red;]www.stockbarometer.com[/color]- don't forget to scroll to the bottom.
As always, if you have any questions or comments, feel freeto email me here at jay@stockbarometer.com.
Regards,
Jay DeVincentis
Tradinginvolves high risk. Past results are notindicative of future returns. Stockbarometer.comand all individuals affiliated with Stockbarometer.com assume noresponsibilities for your trading and investment results.
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