My Medium Term Market Timer gives a “profound” signal around 12-18 times per year.
Last week was one of those times, and it excelled itself.
By the close on Monday, indicating dramatically oversold, the S&P and its associated ETFs and high beta stocks also displayed a reversal bar signal, which was tradeable if the price rose above the top of the doji bar.
Let’s take the UPRO, which is the 3x ETF for the S&P.
On Tuesday it did break Monday’s high, but closed below Monday’s close for a slight drawdown. The Medium Term Market Timer was now showing even more oversold.
On Wednesday the market stirred, and closed above Tuesday’s high.
On Thursday UPRO gapped up, hitting its 50-dma. Our first profit target was slightly below that.
And on Friday it has stabilized somewhat. But our profits are assured and protected if you use my EDGE Trade Plan.
Now, with the UPRO you can also trade its options, which are liquid enough in most cases. The deep ITM January calls have yielded over 14% in just three days, while a more aggressive deep ITM call play for October has yielded 40% in gains, though not necessarily to be recommended.
And while the percentage gain in the underlying isn’t spectacular, the trade itself was as easy as it gets, and as high probability as it gets. So, at the very least, the UPRO was a no-brainer vs. the SPY.
Again, the point here is that we used the Market Timer in the perfect way which is very gratifying.
In the near future I will be re-calibrating our Short Term Timer, but be aware that the shorter term an indicator is, the more “noise” it is picking up. Our Medium Term Timer is striking a nice balance in the meantime.
Market Timing: Suffice to say I hope you can now see the value of our Market Timers! We are still a bit oversold, which is likely to resolve itself in the next day or so. Then we’ll see if a bearish waterfall pattern starts to unfold, or a recovery.
Stock Selection: Like last week, there are good bullish and bearish setups right now. I’m showing both today, and we’ll go the way of the tidiest setups in the main market direction. However, it is likely to be a market of winners and losers in reasonably equal measures.
If the market does do a waterfall, then of course there will be far fewer bullish breakouts.
Application: In a few seconds we can see a mainly Bearish Dashboard combined with the Medium Term Timer still suggesting oversold. And we can identify solid looking setups again, in just a few minutes.
Market OutlookThere are high quality setups in both directions, so some clear guidance from the main indices will be welcome.
Trade What You See … and make sure you’re seeing at least a couple of our Big Money Footprints.
Software Upgrades
The new OptionEasy Strategy Analyzer has been released this week, with further updates due in the next couple of weeks. These updates will include the new Strategy Matrix, making it easy for you to find your strategy. Also the Strategy Recognize function where you can create your own strategies, and the app will recognize which strategy you’re building. And finally, the Scenarios function where you can input settings for future values and see how your strategy will fair in those circumstances … a bit like how the Pricer works.
I’ll host the Mastermind sessions for Miami Bootcamp attendees when the additional upgrades are made.
The trade journal and associated updates are looking better and better, and they too will be released in phases … the first well in time for the December Summit event.
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Remember, you can play the video at 1.25x or 1.5x speed to whizz through it faster if you like! I have placed all the stocks covered in today’s review in your “Latest Preview” watch list.
