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Kevin Wilde
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Kevin Wilde is the chief trading strategist at alphaking.com and a Marketocracy.com Master. Investors can follow his trading advisories via his Daily AK newsletter, or have their money run for them via Marketocracy.com money management services, where Kevin's trades will be automatically entered.
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  • Time To Buy The Dip

    While the big picture remains a stock market deciding whether it wants 2014 to go down as a 1999 repeat or a 1987 one, the short term indicators are signaling it is time to buy the dip.

    Entering positions when two indicators in this chart trigger in the same direction, and exiting when one triggers the other way, returned 33.6% last year trading the S&P500 without leverage, as well as scoring extremely well over the long term in testing.

    Risk of a 1987 melt-down remains fully in place, though so far the NASDAQ remains above its prior breakout level near 4345, and the bulls should be given the benefit of the doubt while that remains the case.

    If you would like to track updates on the chart shown below sign up at alphaking.com, click on the verification email, and get THREE months free access to my on-line newsletter.

    -Kevin

    (click to enlarge)

    Disclosure: The author is long QLD.

    Tags: SPY, QQQ, QLD
    Aug 07 8:50 AM | Link | Comment!
  • 1987 Versus 1999 Decision-Time For The Stock Market

    Anyone watching Drunkenmiller's assessment on CNBC of FED and the economy? He is so spot on, IMHO... TZA, up to 10% of total portfolio values. ADX trend is (maroon line in the chart below.) ADX indicates strong momentum in-line with the trend, and then we can expect the contrarian indicators to remain above the extreme overbought line. ADX indicates weak momentum in-line with the trend, and then we can expect the contrarian indicators to move from overbought to oversold, back to overbought, till the ADX turns up again. ADX is flattening as the NASDAQ challenges its breakout line highlighted by the yellow line. ADX will turn up and the blow-off rally will resume. ADX will turn down and the contrarian indicators will plummet to the oversold zone as the stock market corrects - at a minimum - or begin a new bear phase.

    Now to my take on the stock market:

    The hedging indicator - which tracks performance of individual stocks - remains negative, thus my portfolio remains hedged with

    Yesterday's action remains in-line with what I wrote last Friday about the 2007 and 1987 comparison where the bulls are fine so long as they defend recent breakout levels, and where the markets crash when those technical lines in the sand are breached in earnest.

    The two primary way traders make or lose money is to either follow the trend - trend following - and be right or wrong going forward, or trade against the trend at extremes - contrarian - and be right or wrong going forward, and that is essentially what the chart below was designed to track and profit on.

    One key element in the "trend follow versus contrarian" conundrum is what the weekly

    A rising

    A falling

    Right now the

    If the yellow line holds then the

    If the yellow line is breached then the

    Too early to tell which way the stock market will go, with the bulls defense of that yellow line critical to what happens next. Hence, hedging positions is the way to go till this trend/momentum dilemma is resolved, with the big money expected to be made when all investment ducks line up in the same direction.

    A 1999 style blow-off is likely to land if the bulls hold above that yellow line, while a 1987 style crash is likely if the yellow line gets taken out.

    If you would like to track updates on the chart shown below sign up at alphaking.com, click on the verification email, and get THREE months free access to my on-line newsletter.

    -Kevin

    (click to enlarge)

    Disclosure: The author is long QQQ, TZA.

    Tags: QQQ, TZA
    Jul 16 12:03 PM | Link | Comment!
  • Two New Sell Signals...

    Yesterday got a new sell from the short term contrarian indicators (yellow circle near top of first chart,) to confirm last week's twin VIX extreme sells (orangle circles,) which has me removing TNA from the hedging side of the portfolio.

    Entering trades when two of these indicators trigger in the same direction, and exiting when one signals the other way, returned 33.6% last year trading the S&P500 without leverage, as well as scoring extremely well over the long term in testing.

    (click to enlarge) NEW excessive optimism of active money managers. Entering on the circles on dips/rips against the trend, and exiting on the arrow extremes in-line with the trend returned 30.7% last year trading the S&P500 without leverage, as well as scoring extremely well over the long term in testing.

    The second chart shows a new red arrow sell due to

    Both these new signals essentially to say to reduce exposure on the long side, though the trend remains up for now. Note two signals from the short term indicators against the trend is ALWAYS followed by a turn the other for the hedging indicator, which tracks movement of the average stock. Thus whatever happens the broader market, the history of this set-up says the average stock in for a wall of pain here, at least in the short term.

    Also, red arrows on the second chart also usually leads to a drop for the S&P to the yellow faster moving trend average, and if that fails we get a move to the slower moving purple one, and if that is breached a new bear market is likely to have started. Following this indicator, whatever long sold here should remain in cash till the next green circle lands, which will help avoid any crash scenario for that portion of the portfolio.

    If you would like to track updates on the chart shown below sign up at alphaking.com, click on the verification email, and get THREE months free access to my on-line newsletter.

    -Kevin
    (click to enlarge)

    Disclosure: I am long QID.

    Jun 05 11:16 AM | Link | 1 Comment
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