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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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  • VIX Says Another Plunge For Stocks Coming

    As I mentioned last Friday, the major stock indexes rallied yesterday on a sell the rumor buy the fact news event surrounding the Crimea vote. Volume was pitifully low though, calling into question the longevity of the move.

    The next news event is the FED two day meeting starting today, which brings us smack in line for a Martin Zweig "three moves and a stumble" event - and possible stock market peak - once they pull the trigger on their third tapering of QE bond purchases on Wednesday. A rally into that decision is likely to be a buy the rumor sell the fact event.

    The chart of the short term indicators below also have Wednesday peak in sight, as the white line of the VIX has pulled back below the detrended Bollinger Band, triggering the first of an expected pair of buy signals from this very important fear/complacency indicator. The dotted blue lines and circles highlight the first VIX buys, while the solid blue lines and circles highlight the more important second.

    Often, the pullback below the BB between the two last two days, and followed by a two to three day spike of the VIX back above the BB that sees the stock market make lower lows than the level seen on the first VIX BB spike.

    Thus, a continuation of the rally into a Wednesday peak and reversal that sets up a hard sell-off post FED decision to close out the week looks on the cards on a buy the rumor (of the FED decision) sell the fact play.

    If so, the AK indicators will highlight whether that second VIX spike marks an important bottom that should be bought with both fists, versus the start of the "big one" on the downside.

    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 QQQ.

    Mar 18 10:47 AM | Link | Comment!
  • Time To Hedge Longs Again

    The hedging indicator has turned negative, which was predicted by recent sells from the short term indicators (red and yellow circles,) thus I am buying TZA with 10% of portfolio value to go with my 50% long QQQ position.

    I will add another 50% exposure on any dip to the green trend averages, and another 50% when the short term indicators trigger an oversold buy - so long as the trend remains up by then.

    So I'm being very cautious here on the long side, as the hedging indicator shows individual stocks rolling over even as the stock indexes continue to put up a fight, and prices need to come down some to reduce some of the risk.

    The hedging indicator made over 100% last year as a stand-alone strategy, while trading the short term indicators - two triggered in the same direction to enter a trade, one in the opposite direction to exit and move to cash - returned 33.6% last year trading the S&P500 without leverage.

    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 QQQ, TZA.

    Tags: QQQ, TZA
    Mar 13 7:56 AM | Link | Comment!
  • Where Have All The Bears Gone?

    The trend momentum power rating remains a mediocre 50% bull, as the number of bear at investor intelligence survey hits the lowest level ever, smack in-line for the five year anniversary the bull market. Note the super high number of bears going into the 2009 lows, exactly the opposite of what we have now.

    (click to enlarge)

    No change to the overall technical set-up, which remains very risky to be heavily invested on the long side, with the current optimal investment 50% long due to the trend being up, while the intermediate term, the short term, and investor sentiment remain in the negative sell camp.

    The next significant development from the AK indicators is an expected negative turn for the hedging indicator later this week. When that happens I will buy TZA with 10% of portfolio values.

    The next significant development after that, if the weakness continues, is the trend trading indicator in the next chart moving closer to the low risk - entry - line, which would be my cue to move long exposure from 50% long to 100% (hedged with TZA.)

    On the major news front, we have the Crimea referendum vote on the 16th, which brings into question what the Ukraine military will do if voters elect to join Russia.

    Three days later we will likely get the third bond tapering move from the FED, which potentially brings a Martin Zweig "three move and a stumble" transition from bull to bear.

    I remain 50% long QQQ here, looking to increase exposure on an expected dip, and ready to go aggressively short if the two green lines for the NASDAQ trend turn negative, something they did not do all of last year.

    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 QQQ.

    Tags: QQQ
    Mar 12 8:35 AM | Link | 2 Comments
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