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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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  • 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
  • New VIX Sell Signal

    New sell signal from the VIX - highlighed by the orange circle - which usually means the VIX is about to race across the upper Bollinger Band.

    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, TZA.

    Tags: QID, TZA
    May 14 12:13 PM | Link | Comment!
  • Signs Of A Stock Market Crash...

    The trend momentum power rating remains a reasonably strong 60% BEAR.

    No major changes in allocation is expected this week, with the current allocation on the short side via inverse ETFs, and enhanced with TZA for the hedging side of the portfolio since the hedging indicator is also negative..

    The S&P500 (not shown) closed smack above the 50 day moving average yesterday, and any downside follow-through that breaches that key technical level going forward likely opens the selling floodgates for real. Any bounce from this position is likely to be weak, and simply stalling the inevitable.

    The contrarian indicators (near top of chart below) have not crossed the oversold extreme line for nearly two years now, which is an impossibly long time without such an intermediate term correction, thus the odds are super high that we will see lower prices this time as the technical landscape regresses to the mean and normalizes.

    As mentioned in the Friday update, the key to whether the correction leads to new highs to come, or a crash to start the next Great Bear, depends on the direction of the weekly ADX (maroon line in chart below) by the time the stock market reaches the oversold extreme.

    A rising ADX would indicate strong downside momentum that would open the door to a crash as the bulls try to sell at the same time, while a falling ADX would indicate weak downside momentum that would likely lead to a rally to new highs once the correction completes.

    The dotted red line highlights the level the NASDAQ would have to fall to confirm the bull top is in to start the next Great Bear phase.

    Since the bull/bear cycle line (not shown) continues to trend down after a three year advance, odds are super high that the bears will win this one to put an end to all bull hope. That said, the latter will remain while the NASDAQ remains above the dotted red line shown in the chart below.

    The red ink should mount up fast when the S&P500 breaks below the 1850 level, which it is likely to do in a hurry once the test of the 50 day moving average fails. When the trends turns positive I will become more bullish and hopeful. Till then, the bear case should be respected and a crash planned for.

    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, TZA.

    Tags: TZA, QID, SPY
    May 07 11:26 AM | Link | 1 Comment
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