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M48 Timing Service and Managed Accounts

This table is an example of what our M48 Timing Service subscribers receive 3 to 5 days per week.

A good number of these positions are found in our Managed Accounts as well.

These are not recommendations!

 

 
M48 Timing Service
   M48 Timing Service Time Stamped » 3:55 PM 6/1/2009 PST   
Big Day w/ Mixed Volume…

The NASDAQ has been the best performer in ’09 and the only index until today that was trading above the 200 day moving average. The S&P closed above it today and the Dow is right at it. Volume up on the NASDAQ but lower on the NYSE today.

So what do we do now? If we get through 95 on the SPY the next area of resistance is 100 or 1000 on the SPX (S&P cash).

We will continue to move stops and look for new buys that are just coming out of their bases and not to far extended. Continue to trail your stops on our extended positions.

The 200 day is a major deciding factor for the Big Boys to jump on or add to this wave up.

In other words we could go much higher before we re-trace. I would still maintain 30% cash, 25% minimum in the event this is a head fake.

The “Chart of the Day” is AMZN. 

Let’s look at the numbers:

Market Overview:
Market Close Change Volume Day Low-High 52 Week Low/High
Dow 8,721 +221.11
+2.60%
354.83M 8,501-
8,761
6,440/12,760
NASDAQ 1,795 +54.35
+3.12%
2.15B 1,793-
1,833
1,266/2,550
S&P 500 942.87 +23.73
+2.58%
N/A 923.26-
947.77
666.79/1,406
Gold 980.00 -0.30
-0.03%
11 977.00-
984.20
711.30/1,009
Oil 67.83 -0.75
-1.09%
834 67.80-
68.08
32.40/147.55
M48 Positions and Watched Items:
Stock/
ETF
Approx.
Buy Point
% of Your Portfolio   Stop   Closing Price Comment
IYT 57.01-
59.99
5% 56.06 60.00 I like the chart and the sector-transports.
AMZN 80.01-
83.99
5% 77.17 83.05 Nice chart w/ good volume increase (see video.)
QCOM 41.51-
43.99
5% 40.77 44.40 We changed the buy point to under 44.
GE > 12.99 5% 13.89 13.86 So much for the short side today. Stopped out for a loss.
MCD < 59 7% 55.25 59.85 No change. Looks like 60 is initial resistance.
MCK < 40.50 5% 37.27 41.86 You might not have gotten filled on this yet. Chart still looks good. Top side gap at 43.21
DUG Watching N/A N/A 15.96 Keep watching as long Oil will eventually pull in.
SMH 19.65-20.99 5% 19.64 22.17 Gapped up today like most everything.
X Watching N/A N/A 36.82 Status Quo. Wait for it to pull in a little and we’ll jump on it.
KO 44.01-46 5% 45.29/47.14 49.92 Took an anticipated rest today.
SDS Watching N/A N/A 53.10 Continue to watching this one for educational purposes.
QID Watching N/A N/A 32.29 Continue to watch for educational purposes (see video.)
POT < 100 5% 108.57 117.06 Stay with it.
MOS < 50 5% 52.45 56.47 No change. Keep stop tight.
SKF Watching N/A N/A 40.25 We will remove this if it breaks 39.17 this week.
DBC < 21.90 5% 22.44 23.87 Commodities continue to rise.
GDX 36.74 5% 40.74 43.41 Hit resistance at 45.
SLV 13.53 5% 14.67 15.35 Will most likely fill gap at 15.
PEP 50.00-
51.66
5% 50.55 53.13 Nice move. Resistance is at 54.
SPY 75.64 45% Mental 94.77 Status Quo. If you are new and sitting in cash it is OK to buy in at these overbought levels because the market may continue to be more overbought.
AAPL 112.64 5% 128.33 139.35 We said it would hit resistance at 140. It hit 139.99 today for a high.
GLD 89.73 5-8% 91.47 95.73 Gap around 95 should get filled.
USO (28.46)31.86-
32.76

5% 34.64 37.43 Keep adjusting your stop.
SSO 20.19 5% Mental 27.60 We will add and or replace some of our SPY with the SSO upon the S&P retracing and holding.
DBA < 26.50 5% 26.66 28.87 There is a gap below at 28.
MSFT 19.72 5% 19.79 21.40 Higher volume close like most Nasdaq stocks (see video.)
TBT 47.91 5% 52.07 55.25 We may be going up again.
M48 Bulletin Trading Video
Click Here to watch the M48 Bulletin Trading Video where I explain in detail my actions on a real chart.

For more analysis and commentary, log on to my Blog. You can also follow me on Twitter. And if you visit our Web site you can get the latest information on upcoming Workshops; Listen to past Radio Shows, etc.

Have a great evening!

    – Doug McKay

Quote of the Day: “Give me somewhere to stand and I will move the earth.”

                                            — Archimedes  (c. 287 BC – c. 212 BC)



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Toppy

Metals and Energy are a bit extended and should pull in soon to increase the odds of a further advance.  We have taken some profit on GDX and SLV.

As of today’s close the DOW and S&P still remain range bound.   We moved and split stops today.   Nice move in KO today w/ huge volume.    We own both KO and PEP.

Keeping some powder dry.

Have a great weekend!

850 or 950?

If we close lower tomorrow on the SPX (S&P cash)  w/ volume I see 850 in the cards before 950.    Bond rates jumped today which enabled us to take profit on half of our TBT (short bonds) as it filled the gap above 55.

Closely watching shorts on  financials and real estate.   Keeping an eye on short oil as we have locked in profits on USO.

Exciting stuff coming soon!

Down?

This may be the start of a much needed rest in the market.  Up strong in the morning with a close lower on higher volume.  Today’s technical pattern on the SPY was a shooting star candle which is typically a bearish sign.  Additionally the SDS (short S&P) and QID (NASDAQ 100 short) put in double bottoms.  Tighten up and or split your stops.

Continue to keep some powder dry or raise some powder by tightening your stops.

If you look back a post or two I said up and then down again.  This may be the move down that doesn’t bounce to new highs right away.  I hope it is. 

The S&P is still not in the plus column for the year.  Be glad you left the Buy & Hold camp especially if we break to new lows in 2010-2011.

Exposure

Here is a list of various positions currently in the managed accounts and inside our M48 Timing Service.  These are not recommendations.  Buy points, sell point and stops are for M48 Subscribers and fee based clients.  However, I can tell you we remain in 30% to 35% cash.  I can also tell you at some point we will short the market with 20% to 25% of our tradable dollars.

Positions:

HPQ, AAPL, TBT, MSFT, DBA, USO, GLD, SSO, SPY, PEP, SLV, GDX, DBA, DBC, MOS, POT, KO.

 

Cut your losses short and quick and let your profits flow using split trailing stops.

 

Happy Trading!

Profit Taking On Spy

We took some profit this week via our hard and mental stops on the S&P and USO positions.  Jumping into one of our Saturday workshops right now.   Back at you early next week.

 

Have a good weekend.

Bounce And Then Down Again…

The trend line broke last week on the NAS and today on the Dow and S&P.  I think we get a bounce here and then eventually head lower.  To what retracement level would be a guess.   I’m confident technically that the March lows will hold.  Looking for pull backs to enter on QID (short the QQQ) and SDS (short the S&P).   We will not dump all the S&P positions.  However, we will hedge with some shorts (mentioned above) and most likely add to our commodity longs provided they continue to hold up technically.  Watching UNG (natural gas) to pull in and hold before we enter and also watching MOS for a break above 50.  Moved stops up on AAPL, USO and MSFT.  Bailed on VLO with a small loss.   Keep an eye on SRS.  Even though we are long Texas Tea with the USO the DUG (short oil) chart looks like a potential trade.    All for now.

Great Read Found On Drudge…

Hey Guys – more confirmation to never buy and hold.

Have a good weekend!

 

The market is a cruel mistress indeed. Compounding the pain of big swoons, it kicks investors when they are down by luring them into sucker’s rallies – typically sharp but fleeting bounces in the middle of a bear market.

The current recovery has propelled the S&P 500 a third above its March low in just 60 days, convincing many sceptics that a new bull market has begun. Noted bear Doug Kass of Seabreeze Partners said the recent nadir may be a “generational low” and strategist Tobias Levkovich of Citigroup claimed many large investors who had feared another bear market rally may soon capitulate, pushing markets higher.

The Bull Market Express may really be pulling out of the station, but Wall Street’s trains have a nasty tendency to derail just as passengers jostle for seats. Most recently, the S&P 500 soared 24 per cent over seven weeks ending in early January, only to plunge to a new low. It was a fairly typical sucker’s rally and bear markets often need more than one to create sufficient disillusionment for a definitive bottom.

The 2000–2002 bear market had three, with average gains of 21 per cent in the Dow Jones Industrials over 45 days.

 

The granddaddy of all bear markets, 1929 –1932, had six false alarms with an average gain of 47 per cent. And Japan’s ongoing bear saw the Nikkei rise by at least a third four times in its first four years with 10 more false dawns since then.

 

Bear markets typically end with a whimper rather than a bang, casting doubt on the latest recovery according to Hussman Econometrics, which analysed numerous US market bottoms and bear market rallies. With the exception of the 1987 crash, the month before the lowest point of a downturn saw a gradual descent. By contrast, bear market rallies were preceded by steeper declines and had sharper rebounds. Another characteristic of bear market rallies has been modest volume on the rebound compared to the decline. The current recovery fits the pattern of bear market rallies in terms of volume and the “V” shape of the trough. Analysts at Bespoke Investment Group noted that there have been only seven other periods in the past 110 years with rallies of similar magnitude for the Dow. Three preceded the Great Depression, three came during the Depression and one in 1982.

 

That last example is a hopeful one as it kicked off the greatest bull market of all time. Expectations of a sustainable rebound have been helped by the fact that US stocks touched a 13-year low in March. But this was also the case in 1974, the start of a long rally – technically a bull market – that lost steam after a 73 per cent gain in two years. It would take four more years to reach the 1973 high and two more, the start of the 1982 bull market, to break decisively higher.

 

An authority on bear market bottoms, Russell Napier of CLSA sees a 1974-1976 scenario unfolding followed by an even worse slump. In Anatomy of the Bear, he scanned media coverage around the bottoms of 1921, 1932, 1949 and 1982 and does not see the apathy that characterised those turning points.

“For the great bear market bottoms, you need a society-wide revulsion with equities,” he said. “It just doesn’t smell like the big one yet.”

 

Stocks also become incredibly cheap before major bull markets begin. Yale University Professor Robert Shiller notes that all four big bubbles of the 20th century saw stocks exceed 25 times cyclically-adjusted earnings and trough between 5 and 8 times. On this measure, the 2000 bubble never fully deflated and even the recent low did not breach 11 times.

 

For what it is worth, the US market’s best-informed participants do not find valuations compelling. April saw the lowest level of insider buying (by people associated with the company) ever recorded by research firm TrimTabs with insider selling 14 times as high. Likewise, companies sold 64 per cent more shares than they bought in April.

 

This last point though may be a contrarian indicator of a true bull market. Corporate America hardly displayed prescience prior to the bust, after all.

Higher Volume Confirmed

Sorry guys – it’s been awhile.  All positions are working  so far including the shaky GLD play.  We’ve added  silver and some bank ETF’s.    Our oil position is up nicely.  We received our increased volume a day after the last post so we are 65% long in our S&P positions based on a close above the 875.   The initial entry was the second week of March.  Our stop on half of our SPY and SSO position has been moved up.  Short bonds (TBT) is up.  Looking at DBA (ETF for commodity aggs.).  I like the chart on GDX (miners) better than GLD.  Let’s see how the charts react to the refiners tomorrow.  Watching VLO and TSO. 

This is for educational purposes only and should not be considered as trading advice.

875 With Light Volume

With two minutes ’til the close today the S&P jumped up and closed above 875.  Volume was light with increased price.  This can often signal a potential short term top.  Next week we will closely watch volume.   We have moved stops on SPY,  SSO,  and AAPL.  Newer positions like TBT (short bonds) and USO (oil) are working well so far.  GLD (gold) looks like it wants to test and or break 85.  The commodity ETF – DBA (agriculture) looks good but may be a little extended today.

Have a great weekend!

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Welcome fellow traders and investors!

As Money Managers and Traders, the mission of our Blog and Radio Show is to go on record and further educate our readers and listeners in technical analysis and proper money management across all asset classes.

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To Your Success,

Doug & Gary