Bi-Weekly Stock Barometer No. 188
1/11/2009 10:25:56 AM
With the inauguration on the 20th the planets are aligned for our forecast.
Welcome to the biweekly stock barometer. This article comes out every 2 weeks and gives our big picture view of the market. If you're interested in following our signals and learning more about our system, then I invite you to click here and subscribe to the daily service - since the market can turn on a dime and so too can our interpretation as the market gives its daily clues to the future. Also sign up for our free weekly newsletter, where we provide Alerts from our various traders.
We offer a free weekly indicator chart if you visit our home page and scroll to the bottom. This chart will be updated each week, so be sure to check back frequently for updates. www.stockbarometer.com - don't forget to scroll to the bottom.
As a market timer, I'm always looking for coincidence or events that line up with my key reversal dates. If you received my 2009 forecast, you know that I have been calling for a move higher in the markets (since my BUY SIGNAL in November) into 1/20. This is our next KEY REVERSAL DATE, which we summarize below.
So with the inauguration on the 20th, our services are positioning for a buy the rumor, sell the news on the inauguration - although we do have a short position on FIF in our Explosive Stock Alert service.
The concern? Well, the Qs are testing their uptrend from our last buy signal on the following chart:
We need this uptrend to remain in force. Otherwise, we'll move into sell mode for a move lower into the 20th. I never marry myself to my forecasts - just try to position for the most likely move.
Here's a chart we use in our options service to make calls - it's called the SOS Timing Indicator and we use it to establish our options calls.
Ok, enough chatting for now, on to this week's charts.
Explosive Stock Alert
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Message From The Markets
Market action is ruled by sentiment and by monitoring market internals and studying sentiment you can reasonably predict future market movements. The basis of the Stock Barometer system is overlaying extremes in sentiment with sound technical analysis to predict the likelihood of future price movement. Each indicator and chart measures the hope, fear and greed of investors and traders from different angles. Follow along with my charts and over time, you'll also learn to understand how to read the markets, which is essential prior to setting up each and every trade.
STOCK BAROMETER CHART
The Stock Barometer is my proprietary market timing system. The direction, slope and level of the Stock Barometer determine our outlook. For example, if the barometer line is moving down, we are in Sell Mode. A Buy or Sell Signal is triggered when the indicator clearly changes direction. Trend and support can override the barometer signals.
Day Trading Edge - with Paul Soo
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EQUITY PUT CALL RATIO CHART
The CBOE put/call ratio is comprised of two sets of data; equity options and index options. The index component contains items that are used as a hedge, thereby distorting the correlation and interpretation of the indicator. We use the equity put/call ratio. This is one of the most accurate read of investor's fear and complacency and thus an accurate contrarian view of the market.
The Advantage Report - with Angelo Campione
S&P and Nasdaq Market timing advice for only $10.95/month
TRIN/ARMS CHART
The arms index or also referred to the Trading Index or TRIN for short, is a measure of the ratio of up stocks and down stocks divided by the ratio of up volume and down volume. Our Spread Chart converts the arms index data into momentum Buy and Sell Signals.
Patrice V. Johnson's - J.E.D.I. Trader
Stocks, Options and Options on futures advisory service (up over 100% in 2008).
TICK CHART
The tick index is represents the sum of all stocks ticking higher minus all stocks ticking lower (a stock is said to be trading on an up tick when it trades at a higher price than the last sale). It's utilized as a day trading tool as it gives you an up to the second read of the intensity of buying and selling.
Lynn T's 1-2-3 PLUS Alert
Provides buying and selling advice with 1/3 Index positioning for trends
use 2.5x Leverage and our advice as a hedge for your current portfolio.
BREADTH (ADVANCE - DECLINE) CHART
Each day several thousand stocks either advance, decline or remain unchanged. The number of advances and declines normally ranges from +2500 to -2500. A high number of advancing stocks normally marks a top just as a high number of declining stocks normally marks a bottom. Monitoring the 5 and 13-day moving averages of this allows us to better predict future prices.
Bill West's Fat Pitch ETF Advisory
ETF Advisor trades a diversified portfolio of the hottest Exchange Traded Funds.
VXO CHART
The VIX is a measure of volatility on options pricing. We use the old VIX, which is now called the VXO. The higher the volatility, the more likely the market is close to a bottom, as traders are willing to pay more premium for puts, which act as Insurance on their long positions.
The McMillan Portfolio ($18.95/Month)
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Cycle Time
Monday will be day 31 in our UP cycle. That's quite extended and normally we don't remain on a BUY Signal for so long. Granted, I would love the move to be more efficient instead of so sideways, but we'll take what we can get in these markets.
The Stock Barometer signals tend to follow a 5, 8 and 13 and sometimes 21 day Fibonacci cycle that balance with 'normal' market cycles. Knowing where you are in the current market cycle is important in deciding how long you expect to maintain a position.
Stock Options Speculator
SOS recommends very aggressive stock options plays that target >100% gains.
Potential Cycle Reversal Dates
2009 Potential Reversal Dates: 1/20, 2/11. We publish these dates up to 2 months in advance.
We're looking for a move higher into 1/20 and a post inauguration correction into 2/11.
My timing work is based on numerous cycles and has resulted in the above potential reversal dates. They're predictive and have nothing to do with the barometer cycle times. Due to their accuracy in the past, I post the dates here.
2008 Potential Reversal Dates: 12/31, 1/11, 2/1, 2/13, 3/6, 4/5, 4/22, 5/23, 6/6, 6/27, 7/13, 9/2, 10/3, 10/22, 11/10, 12/11. 2007 Potential Reversal Dates: 1/10, 1/14, 1/27, 1/31, 2/3, 2/17, 3/10, 3/24, 4/21, 5/6, 6/15, 8/29, 10/19, 11/29, 12/13, 12/23, 12/31, 1/11/08. 2006 potential reversal dates: 1/16, 1/30, 2/25, 3/19, 4/8, 5/8, 5/19, 6/6(20), 7/24, 8/20, 8/29, 9/15, 10/11, 11/28. 2005 Potential reversal dates: 12/27, 1/25, 2/16, 3/4, 3/14, 3/29, 4/5, 4/19, 5/2, 6/3, 6/10, 7/13, 7/28, 8/12, 8/30-31, 9/22, 10/4, 11/15, 11/20, 12/16.
Stock Barometer Buy And Sell Signals
QQQQ or SPY Chart: A chart is provided in every bi-weekly report and shows the barometer Buy and Sell Signals (which are provided in my morning updates) as well as showing the next highlighted 'reversal' window. The numbers adjacent to the buy and sell signals are the number of days between signal (cycle time).
Here's one years of our end-of-day buy and sell signals for the Stock Barometer over the past year. They're marked on the QQQQ chart with red and blue lines (or red and blue arrows).
| • | 1/20 | Projected SELL Signal (37 days from last signal) | |
| • | 11/25 | BUY (3 Days) | |
| • | 11/20 | CASH (27 Days) | |
| • | 10/14 | BUY (11 days) | |
| • | 09/29 | CASH (6 days) | |
| • | 09/19 | BUY (11 days) | |
| • | 09/04 | SELL (41 days) | |
| • | 07/08 | BUY (11 days) | |
| • | 06/20 | SELL (4 days) | |
| • | 06/16 | BUY (6 days) | |
| • | 06/06 | SELL (6 days - intra day signal) | |
| • | 05/29 | BUY (5 days) | |
| • | 05/21 | SELL (4 days) | |
| • | 05/15 | BUY (6 days) | |
| • | 05/7 | SELL (13 days) | |
| • | 04/18 | BUY (7 days) | |
| • | 04/9 | SELL (19 days) | |
| • | 03/12 | BUY (2 days) | |
| • | 03/10 | SELL (3 days) | |
| • | 03/5 | BUY (3 days) | |
| • | 02/29 | SELL (13 days) | |
| • | 02/11 | BUY (4 days) | |
| • | 02/5 | SELL (8 days) | |
| • | 01/24 | BUY (4 days) | |
| • | 01/17 | CASH (3 days) | |
| • | 01/14 | BUY (6 days) | |
| • | (historical reversal dates are published on our home page) | ||
Use the following spread/momentum indicators to assist in your trading of the QQQQ, GLD, USD, USO and TLT. They are tuned to deliver signals in line with the Stock Barometer and we use them only in determining our overall outlook for the market and for pinpointing market reversals. The level, direction, and position to the zero line are keys in these indicators. For example, direction determines mode and a buy signal 'above zero' is more bullish than a buy signal 'below zero'.
Gold Spread Indicator (AMEX:GLD)
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Angelo Campione's Advantage Credit Spreads ($49.95/month)
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US Dollar Index Spread Indicator (INDEX:DXY)
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The McMillan Letter ($8.95/Month)
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Bonds Spread Indicator (AMEX:TLT)
Want to trade Bonds? Use our signals with Lehman's 20 year ETF AMEX:TLT. The direction of bonds has an impact on the stock market. Normally, as bonds go down, stocks will go up and as bonds go up, stocks will go down.
OIL Spread Indicator (AMEX:USO)
Want to trade OIL? Use our signals with AMEX:USO, the OIL ETF. We look at the price of oil as its level and direction has an impact on the stock market.
Stock Barometer Premier Membership
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Summary & Outlook
We remain in Buy Trend Mode, looking for the markets to continue higher into 1/20.
As you can see, our barometer chart has turned lower. While this would on its own merits move us into sell mode, the overriding factor is the current trend. I've been trading long enough to see December/January Holiday trends continue far higher and longer than most would envision. So we weight trend over the signal from the barometer. The barometer pulling back may signal the market building energy for the next advance.
We need the current uptrend to remain in place.
We remain long in our index trader service. I'll be looking to add a long position in our ESA service - preferably a short term trade to exploit a Fibonacci projection and in our Options service, we'll have our top 10 recommendations to play this strength into the inauguration.
I hope you enjoyed the biweekly stock barometer. This article comes out every 2 weeks and gives our big picture view of the market. If you're interested in following our signals and learning more about our system, then I invite you to click here and subscribe to the daily service - since the market can turn on a dime and so too can our interpretation as the market gives its daily clues to the future. Or sign up for our free weekly newsletter, where we provide up to date articles from our various trading services.
We also offer a free weekly indicator chart if you visit our home page and scroll to the bottom. This chart will be updated each week, so be sure to check back frequently for updates. www.stockbarometer.com - don't forget to scroll to the bottom.
As always, if you have any questions or comments, feel free to email me here at jay@stockbarometer.com.
Regards,
