The Daily
EQUITY PUT CALL RATIO CHART
The CBOE put/call ratio is comprised of two sets of data; equity options and index options. The index component contains items that are used as a hedge, thereby distorting the correlation and interpretation of the indicator. I use the equity put/call ratio. This is one of the most accurate read of investor's fear and complacency.
TRIN/ARMS CHART
Richard Arms developed the arms index. It is also referred to the Trading Index or TRIN for short. It is a measure of the ratio of up stocks and down stocks divided by the ratio of up volume and down volume. Our Spread Chart converts the arms index data into momentum Buy and Sell Signals.
TICK CHART
The tick index is represents the sum of all stocks ticking higher minus all stocks ticking lower (a stock is said to be trading on an up tick when it trades at a higher price than the last sale). It's utilized as a day trading tool as it gives you an up to the second read of the intensity of buying and selling.
BREADTH (ADVANCE - DECLINE) CHART
Each day several thousand stocks either advance, decline or remain unchanged. The number of advances and declines normally ranges from +2500 to -2500. A high number of advancing stocks normally marks a top just as a high number of declining stocks normally marks a bottom. Monitoring the 5 and 13-day moving averages of this allows us to better predict future prices.
VXO CHART
The VIX 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 close to a bottom, as traders are willing to pay more premium for puts, which act as Insurance on their long positions.
Cycle Time
Monday will be day 8 in our UP cycle.
The
Potential Cycle Reversal Dates
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. We publish these dates up to 2 months in advance.
Our next date is 10/19, which is still a ways off, so we're expecting the market to top before then and retrace into 10/19. I'd wait for the timing of the reversal from the stock barometer before getting too excited about getting negative.
My timing work is based on numerous cycles and has resulted in the above potential reversal dates. They're predictive and have nothing to do with the barometer cycle times. However, due to their accuracy in the past, I post the dates here.
2006 potential 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. 2005 Potential reversal dates based on 'other' cycle work were 12/27/04, 1/25/05, 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.
QQQQ or SPY Chart: A chart is provided in every bi-weekly report and shows the barometer Buy and Sell Signals (which are provided in my morning updates) as well as showing the next highlighted 'reversal' window. The numbers adjacent to the buy and sell signals are the number of days between signal (cycle time).
Here's one years of our end-of-day buy and sell signals for the
- 9/24 Projected SELL Signal (8 days from last signal)
- 9/12 BUY (4 days)
- 9/06 SELL (3 days)
- 8/31 BUY (3 days)
- 8/29 SELL (7 days)
- 8/17 BUY (3 days)
- 8/14 SELL (4 days)
- 8/8 BUY (16 days)
- 7/17 SELL (3 days)
- 7/12 BUY (15 days)
- 6/20 SELL (4 days)
- 6/14 BUY (20 days)
- 5/15 SELL (27 days)
- 4/5 BUY (7 days)
- 3/27 SELL (13 Days)
- 3/8 BUY (34 Days)
- 1/18 SELL (4 Days)
- 1/11 BUY (17 Days)
- 12/22 SELL (6 Days)
- 12/14 BUY (0 days)
- 11/24 SELL (0 days)
- 11/14 EXIT/CLOSE/CASH (9 days)
- 11/01 SELL (18 days)
- 10/26 BUY (18 days)
- 10/2 SELL (4 days)
- 9/26 BUY (14 days)
- (historical reversal dates and performance figures are published at the bottom of the
[/list]
The following work is based on my spread/momentum indicators for the QQQQ, GLD, USD, USO and TLT. They are tuned to deliver signals in line with the
Gold Spread Indicator (AMEX:GLD)
To trade Gold, utilize the Gold ETF AMEX:GLD. This gives us a general gage to the overall health of the
US Dollar Index Spread Indicator (INDEX:DXY)
To trade the US Dollar, I'd utilize the Power Shares AMEX:UUP: US Dollar Index Bullish Fund and AMEX:UDN: US Dollar Index Bearish Fund.
Bonds Spread Indicator (AMEX:TLT)
To trade Bonds, I recommend Lehmanҳ 20 year ETF AMEX:TLT. Note that the direction of bonds can have an impact on the stock market. Normally, as bonds go down, stocks will go up and as bonds go up, stocks will go down.
OIL Spread Indicator (AMEX:USO) [color= red;]*NEW*
To trade OIL, utilize AMEX:USO, the OIL ETF. We look at the price of oil as its level and direction can have an impact on the stock market.
Summary & Outlook
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We here at the Stock Barometer remain in Buy Mode looking for the market to top following options expiration, so stay tuned for a signal sometime this week, unless we're wrong, which I won't mind because we're positioned long. Technically, the market is hanging out below resistance, which means it's going to have to show its hand soon.
To follow our daily signals and trades and learn more about our system, click here and sign up for a free trial. Sign up for our free weekly TRADE TUTOR newsletter to get up to date advice from our Pro Traders.
Hope you had a great weekend.
As always, if you have any questions or comments, feel free to email me here at
Regards,
Jay DeVincentis
Trading involves high risk. Past results are not indicative of future returns. Stockbarometer.com and all individuals affiliated with Stockbarometer.com assume no responsibilities for your trading and investment results.
