Thanks for all the visitors, good trading,
|Simple Trading Ideas||
I really enjoyed posting here a couple of times a week over almost a year and a half. I intended to educate myself with my posts but in the meantime a realized that there were a lot of people around the globe who were interested in my writings. My main goal with this blog was to describe what the market was doing using mainly technical analysis. I almost always included a chart to visualize where things were going. I was using these observations in my own trades. Since I have been blogging here I refined my technical analysis and I developed techniques I feel very comfortable with. This blog also served as a journal for me although I didn't go into details about my personal trading. During the past few months I realized that I got distracted and I started to focus on what my audience would like instead of what I would benefit from the most. After all this about trading and making money. As a result I decided that I will take my future posts private. I will go into more detail specifically about my trades. These posts would be too personal to share. I will leave this post open to public so everybody can search it and I will probably search it too.
Thanks for all the visitors, good trading,
The CBOE Options Total Put/Call Ratio confirms the recent advance of the overall market. Investors are buying less puts as they believe that the market could move even higher. The daily chart below shows $CPC with a couple of moving averages. The 10-day SMA sharply turned down and is moving lower. The correlation coefficient between $CPC and $SPX the S&P 500 index is back to normal which is negative.
The daily chart below shows the 21-day EMA of the S&P 500 Advance-Decline Percent . The Advance-Decline Percent is a breadth indicator that measures the percentage of Net Advances. The calculation is simple:
AD Percent = (Advances Less Declines) / Total Issues
In this case we are looking at the Advance-Decline Percent for the S&P 500 which measures the degree of participation of the S&P 500 stocks. When $SPXADP is positive and advancing it shows that more and more S&P 500 stocks participate in the uptrend as was the case during the past week. Earlier, starting in June there was a divergence between the 21-day EMA and $SPX (in the background) which foreshadowed the recent pullback.
$VIX sharply moved lower during the past week showing that investors are having more confidence in this long-term uptrend and the recent "fear" of a deeper correction is now in the past. Even sudden geopolitical events only moderately affected the market as it was evident this past Friday and it was quickly absorbed showing how resilient is this equity market. $VIX spiked above the 200-day moving average but finished the day below that as fear dissipated during Friday.
The daily charts below shows $NYA, the NYSE Composite Index. The indicator window shows the New 52-Week Highs and New 52-Week Lows of the NYSE. I am trying to use these breadth indicators to gauge the bottom of this pullback/correction. The New 52-Week Highs are still way under the 50-day SMA and the New 52-Week Lows are still above the 50-day SMA and increasing. There was a similar situation back in February, see the circled areas. I am still waiting until the New 52-Week Highs are increasing and eventually move above the 50-day SMA and the New 52-Week Lows move way below the 50-day SMA.
$SPXA200R is a breadth indicator showing the percentage of S&P 500 stocks above the 200-day moving average. $SPXA200R declines when more S&P 500 stocks cross below the 200-day moving average. Notice that in July a divergence developed between the S&P 500 and $SPXA200R. $SPXA200R probably will move lower along with $SPX the S&P 500 index.
The daily chart below shows $SPXA50R, the S&P 500 Percent of Stocks Above the 50-Day Moving Average. It has been declining since the end of June showing a divergence with the S&P 500 index. You can read more about the $SPXA50R if you search this site. The horizontal lines are for reference. The upper half is bullish and the lower half is bearish. During pull backs $SPXA50R can decline below 40%. In an uptrend this could be a good buying opportunity.