Any bear traders out there.

[jeffalvinson]

It will be real interesting to see if the SP500 can break out above its 200 day moving average (blue line, 2,764) and hold it.


[SP500, 3 months, daily candles, 200dma (blue line: 2,764)

 

[vanzandt]

Hi Mark,

What I do for entries is semi complicated: (sorry, but its a lengthy answer)
1: I have a math based computer program that outputs the entry price's for 6 different trading formula's that encompass anywhere from simple math based trend following formula's,
to algo formula's, to contrarian math formula's.
Here is a sample of the program output's for last Thursday evening (11-01-2018) for trading SPY options on Friday 11-03-2018:

[Signal Date: 11-01-2018 for Trade Date 11-02-2018]
OPTION.........PREV..OPEN..HIGH..LOW...CLOSE
NOV276 CALL..2.20..2.37...2.87...2.08...2.73
NOV270. PUT...4.58..3.85...4.15...2.70...2.82
SYSTEMS:
BASE:..UC=10..UP=0..TE=10C-2........................................NOV276C BL=2.05
CHD1: EM=21 LM=31 D=LM-10 R=1 S=52 TE=6C C=MD2.....NOV276C BL=1.75
CHD2: EM=20 LM=5 D=EM-15 R=4 S=25 TE=4P C=MD3.......NOV270P BL=2.05
ALG1: C=120-136-144=L5 P=142-108-28=L1 SM5W1=WP-1..NOV270P BL=2.10
ALG2: C=35 EM=21 +++ P=29 EM=20 --- R=1.2 SL1=P........NOV270P BL=2.05
ALG3: C89 C27 C1 CL1=UP CM25=L5...................................NOV270P BL=2.05

---------------------------------------------------------------------------------------------------------

[Trade Data for 11-02-2018]
OPTION.........PREV..OPEN.HIGH.LOW..CLOSE
NOV276 CALL..2.73..3.26..3.42..1.72...2.10
NOV270. PUT...2.82..2.27..4.72..2.09...3.21

_______________________________________________________________________

You can see on Thursday evening 11-01-2018 each of the 6 different trade formula's produced
6 trades, 2 trade entries for calls and 4 trades for puts.
So it appears to be a confusing mess, right?
However, because there is so many different SPY entry prices in 2 different directions,
I use live SP500 chart guidance to help me decide what entry price to use in what direction.

[Step 1]
First before the market opens, I formulate I.B. Bracket Orders (semi-automated Buy Limit,
Sell Limit, & Stop) for all the program entry prices (except the duplicates) and have them ready and waiting to potentially be transmitted.

[Step 2]
The signal's on Thursday evening of 11-01-2018 were for a trade on
Friday 11-02-2018.
Below is a 5 day, 30 minute candle chart, with the 50ma (blue line), 200ma (purple line) and
300ma (brown line), that shows
Tuesday 10-30, Wednesday 10-31, Thursday 11-01, Friday 11-02, and Monday 11-05.

[Step 3] (Put Trade)
Now notice on Trade Day Friday 11-02, the opening 30 minute candle had a large Gap Up
Opening and spiked through a declining 200ma (purple line).
When this happens,
(A) I look at that gap up on the live chart
(B) and look at the live option chart
(C) and look at my computer program Put Price Entries to see which price best matches the current gapped down Put Option Price and Transmit the Bracket with the Buy limit closest to the current price.

So that above takes care of the Puts.

As for the program Call entries on 11-02-2018, I repeat everything above, but instead for Calls I am looking for a pullback to the rising 50ma (blue line) which occurred on the 7th candle,
I then look at my computer program Call Price Entries to see which price best matches the current declining Call Option Price and Transmit the Bracket with the Buy limit closest to the current price.

And that's it for calls.

After I have transmitted both the put and call brackets, I am free to get away from the
Work Station for the rest of the day.

[SP500, Last 5 days, 30 minute candles, 50ma, 200ma & 300ma]
View attachment 194279

Hi Jeff.
Any fresh thoughts going forward on the S&P here?

 

[tomorton]

I'm not in any equities / indices positions right now, waiting for a consistent long-term trend. With indices these would usually be up. If and when I do get long again on the US indices I'll tow along a raft of sell orders on weak individual UK equities, there was huge recent divergence between some of these cr@p shares and the Dow.

 

[viruscore1]

Absolutely no bear traders out here. Only traders out here.

IMHO Maybe you should become one.

 

[jeffalvinson]

Hi Jeff.
Any fresh thoughts going forward on the S&P here?

From a "long term" investor perspective, the uptrend is still intact.
On this 4 year monthly candle chart of the SP500, the SP500 bounced off the 20ma in the month of October 2018 and has stayed above it. We really do not have a true bear market unless the SP500 has a monthly closing candle below the 40ma.

[SP500, 4 year, monthly candles, 20ma & 40ma]

------------------------------------------------------------------------------------------------

From a "short and intermediate" term perspective, the market is somewhat bearish with the
declining 50 day moving average a temporary ceiling. It will have to break above the 50ma
and hold it, to resume a short to intermediate term uptrend.

[SP500, 3 month, daily candles, 50ma]

 

[tomorton]

From a "long term" investor perspective, the uptrend is still intact.
On this 4 year monthly candle chart of the SP500, the SP500 bounced off the 20ma in the month of October 2018 and has stayed above it. We really do not have a true bear market unless the SP500 has a monthly closing candle below the 40ma.

[SP500, 4 year, monthly candles, 20ma & 40ma]

------------------------------------------------------------------------------------------------

From a "short and intermediate" term perspective, the market is somewhat bearish with the
declining 50 day moving average a temporary ceiling. It will have to break above the 50ma
and hold it, to resume a short to intermediate term uptrend.

[SP500, 3 month, daily candles, 50ma]
View attachment 194604

Fair enough, 's not the end of times........

 

[jeffalvinson]

Here is an interesting thought: (Please don't misinterpret my meaning)
(A) In the 2008-2009 Financial Crisis, Real Estate Mortgage Bonds (MBS: Mortgage Backed Securities) started the Crisis that took down the economies of the world.
In baseball terms, Real Estate Mortgage Bonds were the "Lead Off Hitter" in the Crisis.

(B) It is very possible today that the Real Estate Industry could be giving us a Leading Indicator of future problems. Is it once again trying to be the Lead Off Hitter?"
Look at the 3 year chart of the Real Estate Builders and Material Suppliers ETF called NAIL.
Its down -74.85% since the January 2018 high!

[NAIL, 3 years, monthly candles]

 

[viruscore1]

Here is an interesting thought: (Please don't misinterpret my meaning)
(A) In the 2008-2009 Financial Crisis, Real Estate Mortgage Bonds (MBS: Mortgage Backed Securities) started the Crisis that took down the economies of the world.
In baseball terms, Real Estate Mortgage Bonds were the "Lead Off Hitter" in the Crisis.

(B) It is very possible today that the Real Estate Industry could be giving us a Leading Indicator of future problems. Is it once again trying to be the Lead Off Hitter?"
Look at the 3 year chart of the Real Estate Builders and Material Suppliers ETF called NAIL.
Its down -74.85% since the January 2018 high!

[NAIL, 3 years, monthly candles]

You really think there is something similar cooking. The banks have filters and checks in place to limit the possibilities. Let's hope there isn't another shoe to drop to send us over the edge. If there were, it won't come from banks.

 

[jeffalvinson]

I know for a fact that one or more of the largest 5 banks in the US have already packaged and started selling Mortgage Back Securities again. The same garbage that created the 2008-2009 financial crisis.
You have to remember that the previous administration installed new regulatory laws to help prevent this from happening again, but the current administration has killed most of those preventive regulations.

 

[viruscore1]

I know for a fact that one or more of the largest 5 banks in the US have already packaged and started selling Mortgage Back Securities again. The same garbage that created the 2008-2009 financial crisis.
You have to remember that the previous administration installed new regulatory laws to help prevent this from happening again, but the current administration has killed most of those preventive regulations.

Try to get mortgage and see what happens. You might have too sign over your first born .