In this video I discuss support and resistance in S&P500 index, SPY and NYA.
I present a traditional way to look at NYSE Advance-Decline issues and my alternative use of this indicator.
MADI- My Advance-Decline Indicator - is a multifaceted tool offering a simpler way to analyze market breadth and (sometimes) pick a bottom.
S&P500 Index and Sectors Analysis based on Composite Score Indicator (CSI). I discuss buy signal on $XLU Utilities sector, and stop placement on $XLK Technology.
In this video I recap last CSI Trend in S&P500 ETF - $SPY. The SPY trend started on a week of Brexit June 27 and completed with an 'OFF" sell signal on a week of August 29. All S&P sectors are either in correction or 'OFF'. A timely sell signal in Industrial sector $XLI from my video a couple of weeks ago revisited.
I realize that some of CSI (Composite Score Indicator) terminology may sound a bit bizarre, but I try to explain it in these videos the best I can, with actionable points along the way. I never published any info about CSI and don't think I should just put it out in the open. Including CSI overview and rules into a paid subscription service seems to best option at this time. Any questions or suggestions are welcome - use comment section or Twitter: https://twitter.com/i_Bergamot
I also discuss My Advance-Decline Indicator (MADI) - a slightly different approach to $NYAD analysis. Instead of plotting a Cumulative chart of NYSE advance-decline line (which will change depending on starting point), I look at them as an average. Basically, MADI is similar to McClellan Oscillator, but more adjustable. I will explain more in next video.
This video was published a couple days ago, but i forgot to link it to this blog. The plan is to put these videos out every week on Monday, or maybe during a weekend. I find them pretty useful as summary of recent past and different scenarios for immediate future. I hope my dear readers are as well...
In this video I discuss a progression of weekly SPY trend, based on interpretation of my Composite Score Indicator (CSI).
Sell Signal warning on a week of August 22, 2016, weak condition of S&P sectors and relative under-performance of NYSE composite index ($NYA). Also I talk about multi-year sideways grind, with bear market stuck in-between (yes, bear market - I'll explain next week), and illustrate how personal investors walked away from trading.
In this video I discuss a progression of weekly SPY trend, based on interpretation of my Composite score Indicator (CSI). Relative trend stages of the sectors can be seen in image below the video. I note a double sell signal in Industrials $XLI and explore possible scenarios.
Lord Vishnu is one of Supreme Gods of Hinduism, master of all, creator and destroyer... and he is slightly blue. (Wait, it gets better). Apart from having four hands, he also has a gang of 12 Adityas - your regular, everyday Sun-Gods. One of them is Bhaga, God of wealth, also responsible for distribution of destiny according to merits of recipient... ahem
God Bhaga maybe an obscure character, but is definitely connected linguistically to Sanskrit word 'Bhagavan', meaning 'rich and prosperous'. Further, it believed to cognate to Slavic бог ("god" /bog/); and to be an original root of Russian богатый ("wealthy" /bagatyi/). Good words do get around...
In Maharashtra state of India (central-left part of country) people speak Marathi, one of 23 official languages of India. According to Marathi-to-English dictionary (here link), the word 'Anatha' means: either -That is without a master or protector; forlorn, friendless, destitute; or - Friend of the friendless. Brother of the destitute; protector of the helpless.
After paying homage to some of biggest swinging dicks of Wall Street in Guru Puja post (link), I am looking around at what I got. This lonely traveler in search of The Way is not doing too bad. There are plenty of good ideas in stocks that I follow based on various reasons, but mainly because of some common sense notions. I call this approach 'Theme Investing' aka System9. I tend to gravitate towards larger companies not just because all the action and liquidity is concentrated in these type of stocks, but also based on appearance of stability and viability of underlying enterprise. It other words there is less of a chance that these corporations are a complete fucking fraud. Mostly all of 'My Stocks' are real businesses, making tangible things or providing valuable service, and with a scale! Every ones in a while their stocks go up 10-20-30% for no special reason at-all.... just because. It happens often enough, sometimes these trends last for months, sometimes they don't happen for years. Sometimes I am wrong, or early.
In order to make money in The Market I need to answer these 4 questions: WHAT to buy, WHEN to do it, HOW to bet, WHY to sell.
For the task of "WHEN to do it" I developed Composite Score Indicator (CSI) - my proprietary formula to quantify and qualify price action of any actively traded security. CSI is a technique to hook big, major, most explosive trends and continuously know where I am in that trend, including an ample indication when the trend is over. Composite Score Indicator does not tell the future, it can not guarantee that position will be profitable. CSI Buy Signal does not guarantee that trend will indeed develop, but every trend has at-least one Buy Signal in the beginning. It just can not be any other way.
My view of importance or prospects of a Theme is just an opinion. I have to wait and calculate my Composite Score Indicator, because there is no way to know in advance if any group of stocks or industry will become an attractive investment. Financial speculation is a process of making an aggressive monetary bet, based on incomplete assumption, for uncertain period of time. As such it is very risky, prone to misjudgment, as well as susceptible to error in forecasting. By using Theme Investing and System12 for stocks selection, CSI for trade timing and conservative position sizing - I attempt to circumvent these difficulties with reasonable expectation of gain over time. The Market rarely makes sense (and I don't think is has to), but it speaks every day... I am listening...
This Anatha is a man without Guru. Alone, but not lost. Independence is my strength. CSI is my guide.
A flashy conversational item, like 'bull market' this or 'bear market' that, is not how i operate. I try not to get myself boxed in this one-way thinking. There is always a bull market somewhere, besides by the time certain type of price action is apparent - its usually too late to bet on it. Risk premium is available to be captured (both on down and up-side) before and ONLY BEFORE all information is available. Once move is complete - the game is over, then the reasons of why and who crawl from under whatever rock they where hiding, and become easy to understand in hindsight. This is theory.
In fact and as I observed in real time, this market has been acting weird since spring. It all started in April, when growth stocks, small caps and previous year market leaders shit the bed. I was not expecting this, as I assumed that treacherous range since 2000 is over and market taking off for another one-in-a-generation 20 year bull market. Long term bull market is a wonderful thing. Stocks can be analyzed on fundamental and economical basis, can be held for months (even years), as economy improves, wealth increases and society flourishes in general. I think we are overdue anyway, but its just my opinion. If and when that bull market comes, stocks still are not going to go one way all the time. There has to be periods of digestion, sideways ranges, rotations and corrections along the way, but in a general climate of growth ala "rising tide lifts all boats". Hah, you wish...
Short summer rally was mostly led by big mega-cap stocks, while small caps lingered and growth stocks generally lagged, although some had a double-digit rallies. That didn't bother me much, as I was heavily invested in biggest stocks via System 12. Personally I have mixed thoughts about so-called growth momentum leaders. Most of them are overhyped pump-and-dump scams, companies without profits, only meant to benefit insiders and bankers thru inflated IPO's and secondary offerings. A true 'stock of the future' is hard to find, as they are not widely followed until many years into expansion cycle, while price slowly climbs on no news and lackluster volume. I am always on lookout for one, but with no such luck lately.
May-June rally was nice, but not enough to rekindle animal spirits and market pretty much died going into summer vacations. Startling evidence was delivered by CSI (Composite Score Indicator - my latest and greatest creation), as it fired a 'Sell all 11s', followed by 'OFF' sell signal across many ETF's and especially 9 Main Spiders on and right after week of June 30th. Of course I didn't know it at the time, I only started CSI testing back then, so its all in hindsight. (Damn thing was so complex - it took me all summer to organize, test and put it to work). Nevertheless, I was alert to sudden softness and while August drop didn't hurt me at all, my portfolios made very little progress on following rally.
I noticed a very careful selling in a beginning of September by some clever operators, and it wasn't unexpected at-all (at least by me). Working thesis was as follows: almost every year there is a 'sell Rosh-Hashanah - buy Yom Kippur' phenomenon, as some heavy hitters sell out most of their active portfolios in order to not to be distracted during high holidays. That was followed by Sukkot, culminating with full lunar eclipse on full moon during last weekend - a truly spectacular display I observed during early morning hours. Knowing about all this coming up, and taking into consideration 31 days wash sales period, and getting confirmation from MADI (My Advance-Decline Indicator) over a month ago, I assumed that they front-running all this shit in order to be ready to buy in October. I lighten up for a while too, then started to accumulate what look good and strong. The problem was - there wasn't too much to choose from, still I waited to see some improvement... Well, we are here, but I don't see any buying. Quite the opposite - its a full blown panic, a carbon copy of 1987 or 2011 (minus the crisis).
Hopefully, the bottom is within reach, but hope is not a strategy. To be sure I don't get swept away, my account is 50% cash, but I was 150% long like a split second ago, so there is no 'ata-boy pat on a back' for Bergamot. I have tools and methods to buy all this crap back and more, as well as some levels that will take me completely out of the market... one day at the time... This year has been a complete fucking disaster for actively managed BCM account, putting my own equity curve firmly into Bear Market territory (extra Marc Faber).
So far its my 3rd worst year ever... shiiiit
...it ain't about how hard you hit, it is about how hard you can get hit
and keep moving forward, how much can you take and keep moving forward.
That's how winning is done!
