100% sideline now

No skin left in the game

Today I was finally stopped out of my final DJIA play.  Ironically, the RumWave chart made a big move to the positive side of the outlook.  I'm not really sure what that means, to be honest, so I'm happily just watching things for now.  The daily scores are all very high and there are some bearish divergences on the DJIA 1 hr and 30 minute charts.  A significant decline tomorrow would probably turn the "red light" on.

Today's scores:

TSP Gameplan:  Move to safety, G fund

401 K Gameplan:  Bond fund or other safe zone

GOOD LUCK TOMORROW!

Questions, comments?  Email me:  rumwavetrading@gmail.com 

Still don't like it

Happily on the sideline

Today I should have been stopped out of my last bullish position with the early morning drop.  However, due to my own mistake in placing the order I remained in the market unintentionally.  As it turns out I was lucky and ended the day with a gain.

I still don't like what I'm seeing on the RumWave chart.  I will reset my trailing stop again to move my last position into cash.

Today's scores:

There's a lot of red on that picture of the daily scores.  I don't know if it will just be a small correction or a big one yet, but I'll be happily watching from the sidelines knowing that I beat the entire DJIA index year to date with one ETF trade over less than two weeks.

GOOD LUCK TOMORROW!

Pigs get fat, hogs get slaughtered

Know when to walk away, know when to run

Some of you may recognize the above line from "The Gambler," a famous Kenny Rogers song.  I decided that the time to walk away is here.  Followers of the RumWave should have about a 10% gain from the time I turned on the green light last week.  Not to shabby.

Yesterday I mentioned that I was keeping an eye on something on the RumWave chart.  Today it became significantly more concerning to me so I sent an email out to my close friends suggesting that they secure the profits they have made.  Personally, I closed out my bullish option positions and set a tight trailing stop on my leveraged ETF.

I believe we are one or two days away from a relatively violent sell off.  There is a chance that the market pushes higher still, but the gravity is to the downside.

The scores:

TSP:  G Fund

401k:  Move toward conservative positions

Questions or comments?  Email me:  rumwavetrading@gmail.com

GOOD LUCK TOMORROW!

This giveback is needed

It's normal, and required

Today the market gave back 120 points on the DJIA at its lowest point, then regained some ground to close down 42.  I believe this is a required move.  I would like to see it continue to the downside a bit more before recapturing the uptrend.  Markets that trend up are good, but those that move too high too fast make me a bit nervous.  It seemed like the "cyber Monday  numbers were good and I received a text message from my CNBC app that some sort of Greece finance deal was worked out.  Those may be catalysts for the market to move tomorrow.

I'm watching one thing on the RumWave chart that has me a little, well, cautious.  I'm keeping a close eye on it and will let you know if it becomes more serious.

Today's Scores:

We are seeing a climb in the daily and 4 hr chart scores.  The RumWave chart score is climbing, but it is not at an inflection point yet.

The bottom line is that I'm holding my positions through this small downturn.  If things turn bad on the RumWave chart I'll exit them, but I'll post it on the blog when I do.

GOOD LUCK TOMORROW!

Short day, big gain

Moving too quick

Don't look now, but we have a nice little rally on our hands.  From the day I turned on the green light my leveraged ETF has moved 10% to the upside.  I fully expect some of that to be given back next week.

Daily scores:

The daily scores are reflecting a market that is overbought in the short term.  The red scores on the 4 hr and the orange scores on the daily tell me that we need to have a sideways or downward correction.  However, I don't plan to exit my positions when it happens.  I'll wait for the RumWave chart to tell me it is time to get out.

The 4 hr chart (above) shows a little inverted head and shoulders pattern.  We've almost met it's target of 13,000 to 13,100.

The daily chart (above) is showing a bullish cross on the MACD.  This is a good example of why I'm not that big of a fan of the MACD.  The bullish crossover is showing itself a week after the RumWave gave the "go" signal.  I don't find late signals to be all that helpful.

TSP Gameplan:  C and /or S fund

401k Gamplan:  mirror the DJIA

GOOD LUCK NEXT WEEK!

Questions, comments?  Email me:  rumwavetrading@gmail.com 

Minor pullback likely

Due for a pause

Today's action was perfect.  Not to hot, not to cold, just right.  However, the daily scores indicate that a minor pullback is likely.  When it does happen I'll think two things.. 1) this is an opportunity for those that missed the initial pop, 2) healthy markets don't move up in straight lines.

Today's scores:

Happy Thanksgiving!

TSP Gameplan:  C and/or S fund.

401k Gameplan:  Assets that mirror one of the major indexes (DJIA preferred)

GOOD LUCK AND BE THANKFUL FOR WHAT YOU HAVE!

Questions, comments?  Email me:  rumwavetrading@gmail.com 

Little less frothy

Pouring too fast leads to foam

Just as pouring a beverage too fast can lead to excessive foam, a market that climbs too fast can develop excessive froth.  The best way to handle it is to just let it sit for a bit.  Today we let the foam die down a bit through the day.  Tomorrow will be a very interesting day for me because it will show me which way the market wants to break.  I'm hoping for a sign that we want to keep the party going and continue the bullish sentiment.  Time will tell!

For now, I'm staying long and plan to be in my current positions for quite a while.

Scores:

TSP:  C and/or S fund

GOOD LUCK TOMORROW!

Another Win for the RumWave

Being right feels good

Time for a quick victory dance in the endzone!  Picture me doing the Neon Deion Sanders endzone dance after a 99 yard kickoff runback.

Now, back to work.

Today's action was great, but it was actually a little too big.  It opens the door to a little giveback.  The RumWave chart quickly zoomed up to resistance.   The 4 hr score is now in the yellowish-orangeish zone; slightly overbought.

 Today's Scores:

I'd not recommend jumping in here is you missed the jump.  I would wait until we get a little giveback, then jump in.  If you did heed the RumWave advice and scale in last week, be mentally prepared for the probable whipsaw.  I will set stops at my break even points, just in case.

Ultimately, I think we are in a short term bullish market for the next month or so.

TSP:  C or S fund.

GOOD LUCK TOMORROW!

Questions, comments?  Email me:  rumwavetrading@gmail.com 

Bullish for the next week or two

Ready to go

On Friday the market looked like it put in the bottom from a technical perspective.  The SPX bounced perfectly off the 61.8% retracement level, while the DJIA moved a little below its 61.8% retracement before rebounding.  More importantly, the RumWave chart is perfectly set up for a very nice bullish move.  I think it started Friday and will continue for the next 10-20 business days.  I'm not sure what the catalyst will be, or more accurately, what the press will attribute the move to.  I'm sure they'll find something to build a headline. At this point I am fully invested in my intended bullish positions. 

Here are the daily scores.  I made an adjustment to their formulas to get rid of the skewed results I've been having.  I think this revised formula will have more constant results.

In the chart above, the green scores for Friday more accurately depict where the DJIA is from a technical perspective.  Right now, we are quite oversold as you would imagine. 

 The chart above is the SPX.  I usually follow the DJIA, but the SPX is the "trader index" so it is worth noting that it is bouncing off the perfect retracement level, the MACD is very low and potentially forming a bottom, and the TTM Squeeze indicator is showing a little sign of a change in trend (red bars turning yellow).

 I've had a lot of emails asking my opinion on AAPL, so I thought I'd put the chart up and opine.  I should caveat my analysis with the statement that I don't trade individual stocks.  I'm not comfortable with the thought that an unexpected C-level officer's departure can send an otherwise strong company's stock into a tailspin.  Also, I believe AAPL is a good investment stock vs a trading stock... there's a difference.  The chart above is a weekly view of AAPL.  Regular readers know I believe in reversion to the mean mechanics.  On the chart, the yellow dashed line is the 50 wk moving average.  Take a look at how much area there is between the yellow dashed line and the candlesticks.  The more room there is between the two, the stronger the gravity is back toward the moving average.  It is no surprise to me that AAPL has reverted back to it's mean.

 Above is the result of plugging the data from the AAPL chart into my scoring system.  In theory, it should work for any stock, although I don't have the historical data to back it up.  The score of "33" is pretty low and indicates that the stock is well oversold on a weekly chart view.

Lastly, the screen capture above is from Yahoo.  This is my favorite place to evaluate the fundamental value of a company.  One of my favorite measurements is the Forward P/E.  At 9.05, AAPL is cheap, especially if you are like me and believe that Apple is one of the best companies on the planet.

So, if I believed in buying individual stocks, I'd be buying AAPL as an investment.  

TSP Gameplan:  C and/or S fund.

GOOD LUCK NEXT WEEK!

Questions, comments?  Email me: rumwavetrading@gmail.com 

Continue scaling in

No changes, I'm still buying, reversal imminent 

No scores tonight as I'm in a bit of a hurry to get to a function that will take me out of pocket for a couple days.  Also probably won't have a chance to update them tomorrow but I'll update them over the weekend.

The green light is still on!  The RumWave chart is now approaching the absolute zero point.  What this means for you: reversal is very very close.

In other news.. Thanks to my readers across the world!  20,000 page views!

GOOD LUCK TOMORROW!

Green Light!

The bottom is here.

There's a fine line between crazy and genius.  Here's why I'm scaling into my 3x Bullish DJIA ETF:

1) The RumWave chart has reached the "buy signal" criteria
2) The DJIA and SPX are in the vicinity of the 61.8% retracement level (the SPX has 10 more points or so to go)
3) We are post election
4) There is tremendous sentiment to "rise above" partisan politics and solve the fiscal cliff
5) "The time to buy is when there's blood in the streets" (Shoutout to Gau for this one)

The RumWave chart is not at absolute zero, so there is still some room for decline.  That is why I'm scaling into my position.  I can't say that we won't see another day or two of weakness.  What I can say is that 10-20 business days from now the DJIA will be higher than it is now.  Time will tell!

Scores:

I may change one of the variables that go into the scores that I calculate each day (above).  There's one that has really been skewing the results to the low side during this decline.. I may have to get rid of it or at least adjust it once we start recovering.

TSP GAMEPLAN:  C and S fund!  It will take a day or two to complete the movement due to the mutual fund trading style of the TSP.

GOOD LUCK TOMORROW!

Questions, comments?  Email me:  rumwavetrading@gmail.com 

Almost a green light

Flirting with the green light

Today's market action was a neck-breaker.  First there were dramatically low futures, then a lower opening only to be followed by a huge rally, followed by a huge decline.  It reminded me of a kick off returner that runs 75 yards side to side, but never really makes any forward progress.  The RumWave is now in the "green light" territory, but I'm not ready to give the all clear.  There may be a couple more days of weakness.  However, I did enter a small cap trade near the close today.  It is still in the "gambling" category, not a RumWave buy.

 TSP:  G fund, but we will move into the C and S fund in short time.

GOOD LUCK TOMORROW!

Closer to a bottom

We're closer to a bottom than most think

Today's action was flat but it moved the RumWave chart in the right direction.  We are now closer to a bottom than a lot of people think.  However, we're not there.  That being said, I may play a short term gamble bullish play with a small cap option call.  We'll see how it turns out tomorrow.

Today's scores:

GOOD LUCK TOMORROW!

TSP:  G fund.

Questions, comments?  Email me:  rumwavetrading@gmail.com

It still looks gloomy

No real signs of a reversal

The recent downtrend shows no signs of reversing direction, particularly from the RumWave perspective.  However, Friday produced some very interesting results driving the RumWave in a significant way toward a bottom.  Make no mistake.. it is not time to buy, but the RumWave chart is moving in the right direction.

Daily Scores:

The daily score total (bottom number) is very low, indicating that the market is oversold and some kind of short term bounce is probable.

The DJIA 4 hr chart (above) is showing some support at the 50% retracement of the summer rally.  Also, the RSI_EMA is displaying a bullish divergence.  This isn't the strongest signal in the world, but it's something that supports a short term bounce.

The DJIA daily chart (above) doesn't show anything that I view as particularly bullish.  About the only bullish argument that I can make is that the Bollinger %B is slightly better than the previous day... not a strong signal when you consider all the oscillators I have called up.

Overall, I'm still all cash.  Just patiently waiting for a strong signal.

TSP:  G fund.

GOOD LUCK NEXT WEEK, AND HAPPY VETERAN'S DAY!

Bounce time

RumWave support level reached

The RumWave reached a support level today, indicating a short term bounce is probable.  However, we are not anywhere near a buy signal.

My internet is being ridiculously slow tonight, so no pictures.  But, the daily scores are very very low.

TSP:  G fund

For any college football fans out there, check out the University of Texas vs Iowa State this weekend.  I'm headed that way for the National Anthem Flyby then down to the sidelines for the rest of the game!

GOOD LUCK TOMORROW!

Cue Europe

It wasn't Obama.. mostly.

As if on cue, the market sold off the day after the election.  Conveniently, most people glommed onto the notion that it was a reaction to the election.  Maybe just a little bit, but a majority of the sell off was thanks to Europe.  As I mentioned the last couple days, Europe has been way too quiet in the run up to the election.  There was even speculation that an "agreement" existed between governments to keep European news off the table until after the election.  Well, only a few hours after the election results relatively horrific news was released that the European recession was starting to negatively impact Germany.  As a reminder, Germany is the only thing holding the Euro together right now, and if it ceases to be able to prop up the rest of the fragile union, things could very quickly spiral out of control.

I submit my second piece of evidence that the markets didn't really care as much about the election.  At about 5am CST the futures were relatively flat with a slight positive bias.  "Strange,"  I thought.  Then, around 615 news of Mario Draghi's press conference hit the wire.  That was the moment that the futures started their downhill slide.

Some technicians and elliot wavers I follow seem to think we may be near the bottom of this little downtrend.   I'm not convinced.  The RumWave is not at a buying point.

Today's scores:

TSP Gameplan:  G fund.

Questions, comments?  Email me:  rumwavetrading@gmail.com

GOOD LUCK TOMORROW!

Charts looking better

DJIA daily chart looking a little better

Just a quick post tonight.. obviously I'm watching election coverage.  The market surprised me a bit today with a nice gain.  I didn't expect that.  Tonight I'm seeing some signs of short term strength.  We had a bullish MACD cross on the 4 hr a few days ago and now we are aiming for a bullish cross on the daily MACD.  We shall see!

Scores:

Here's hoping we know who wins tonight!

GOOD LUCK TOMORROW!

Easy days

Please help me welcome Europe back to the headlines

The last week has seemed like a bit of a market vacation.  Between the non-trading days from superstorm Sandy, the weekend, and the days leading up to the election the market has done almost nothing.  It's been pretty boring, to be honest.  Everyone is just waiting to see what happens.  Unfortunately, we may not know the outcome on Wednesday morning because of the anticipated issues with vote counting.

I'd like to point out that Europe has been eerily silent for the last month or so.  There was a Barron's article some time ago that speculated on a deal between the powers that be to keep Europe on the back-burner until the end of the US elections.  I'm not one to believe such conspiracy theories, but you can't argue against the fact that we haven't heard anything noteworthy or doom and gloomish from our friends across the pond.  Allow me to be the first to welcome them back on the scene as soon as Wednesday.

Scores:

GOOD LUCK TOMORROW!

Weak market

This market seems scared

On Friday the market bounced off a level of RumWave resistance I had mentioned Thursday.  I was able to get out of my small cap "gamble" with a tiny profit.  The charts were starting to look a little better last week, but Friday's action made me think that bulls and bears are all nervous.  Bears are nervous about QE3 and the old saying "don't fight the Fed" while the bulls are nervous about election results and the Fiscal Cliff.  Regarding the election, I think it is a lose-lose situation for equity markets.  If Romney wins, the market will flip out over his intent to fire Ben Bernanke, thus taking away the "punch bowl" that has kept this party going.  If Obama wins, the market could flip out because, well, it's Obama and he's seemingly declared a war on big business (this was a statement by the CEO of JP Morgan in a press conference I happened to be listening to.)

Moreover, the long term charts just look toppy.  We'll see what happens this week!

The bottom line:  not a time to buy from the RumWave perspective.  Short term gambles are just that.

TSP:  G Fund.

Questions, comments?  Email me:  rumwavetrading@gmail.com

GOOD LUCK THIS WEEK!

One day a trend does not make

Nice short term bounce, but concerned about longevity

Today we saw a very nice pop in the market.  It was ready to have the spring unleashed and this morning's economic data was good enough to be the catalyst.  The charts look more healthy on the daily and 4 hour, with a bullish crossover on the DJIA MACD (4 hr).  However, the very short term charts (30 minute or less) look to be a bit overbought.  The RumWave chart is up against a resistance level.  For those reasons I'm expecting a little bit of a negative open tomorrow.

Today's scores:

This is not a buyable rally from the RumWave perspective, but it does have interesting short term gamble potential.

TSP Gameplan:  G fund.

GOOD LUCK TOMORROW!