All Stock Indices Longs Closed

I have taken profits today on all remaining stock indices longs, namely Nasdaq, Austria 20, Dax, UK FTSE 100, Hang Seng, Singapore, China and Russia.

14mar20131Underlying source: Bloomberg

The Dax and SP500 reached close enough today to their respective 2007 tops (which is also De Mark’s call for a swing top) for me to decide to take profits. UBS share my view of how things may unfold with a swing top, a pullback and a marginal higher high (on divergence):

14mar20132Source: UBS

Global narrow money suggests a Spring top for global growth, PFS predict a topping out of US economic surprises and through cyclicals a market top around March, and the five models in alignment may not have fulfilled their swing low yet – it could come deeper in late March, before the push up again into mid-year. The pressure swing from new to full moon switches this weekend into to the negative. And so, I have opted to cash in and step aside, leaving long commodities and short treasuries positions, with the large weighting in the former. My expectation remains that stocks should make a range topping process from here into mid-year whilst commodities take over as the outperforming class, as money exits treasuries. The stock indices longs have paid handsomely – now can commodities go on to deliver similarly in a final secular push?


35 thoughts on “All Stock Indices Longs Closed

      1. was just trying to show a different set of tools saying price was at an area that traders using those tools would take profits on their longer term positions

    1. interesting. when I plotted the pitchfork on SPX as you’ve done, the midline is slightly above current prices. Turns out my chart is using log scale. If I switch the scale to linear, I get the midline right on top of current prices as you do. Maybe it’s got to push up a bit more to hit the midline on a log scale chart??

      1. at an old tim morge site 12 years ago some of the best trading minds i have known discussed log vs linear until the subject was ground into fine dust..since that time i have seen countless traders experiment with medianline sets on log charts…every one i have known personally has stuck with linear.

  1. Congratulations, John, I didn´t know you were long I tought you closed long positions in feb´13. Congratulations. May be one more push, above 1576 s&p?

    1. I have advised of all my trades in real time since starting, in the posts or comments. But I realise most wouldn’t keep up to date with my portfolio unless I keep explicitly stating it. So I have in mind to start a Trades page, but could do with getting to a point of clearing all my existing positions, and starting then.

      1. The basic setup to look for a sell is coming from the lower indicator (Earl2). When both the orange and the red line are going down coming from recent peaks, then a correction or bear market is impending, especially when the orange line has fallen below the red line. The actual sell signal comes when the more short term Earl indicator also peaks and turns down. That’s the blue line, which turned down on March 13.
        My article from a few weeks ago makes it more clear:

        This doesn’t mean the market must crash right away now. But the probability for some kind of extended drop now remains high until the orange and red lines turn up again.
        I use this in combination with the lunar weak and strong periods. When both systems agree it gives a high probability buy or sell entry.

  2. The geomagnetic field is expected to rise to active to minor
    storm periods during the day and will likely persist into the early part
    of day 2 (16 Mar) as a result of the 12 Mar coronal mass ejection (CME).
    An estimate arrival of the CME associated with today’s long duration M1
    flare is around 16/1800-2100 UTC, suggesting prolonged active conditions
    at a minimum, and the potential for minor to major storm levels. A
    chance for isolated minor storm (G1) conditions has been added to the
    day 2 (16 Mar) forecast.

    1. Thanks Gary, nothing major currently.

      Just some further thoughts on geomagnetism and its apparent close alignment with risk assets. It suggests the markets are largely about sentiment (with lunar phase oscillation adding weight to this) and that fundamentals and newsflow are largely spun positively or negatively to fit – and I’m sure we can all think of examples of where this has been the case. I am also aware that we often see macro data and markets move together – and I suggest these natural influences of sentiment may be influencing buying, hiring, investing, even central bank policy, and hence the combined downturns or upturns in both the economy and the markets. Food for thought!

  3. Also sold a bunch but still holding some stocks with stop losses tight and put options. Have a few out of the money call options on stocks like BBRY. A good thing to look at is the SEK.USD. It normally turns a bit before. Sort of still expect it to hit 6 bucks. Spots up at 133 today and Mars entered Aries (any thoughts on this one? – seen some bearish studies on it). My friend that works in IT called me and said he is quitting his job to work with stocks as his portfolio is doing so well…

  4. Very nicely done! One question please, how do you reconcile anticipating lower stock markets, but remaining short Treasuries? Don’t Treasuries tend to do OK, if not well, when stock markets are moving lower? Perhaps its more about portfolio construction – long commodities vs short Treasuries. Thank you in advance.

    1. Thanks! I will do a post next week that will make my expectations clearer in pictures, but it’s like this: a historically-normal end to this stocks cyclical bull is for equities to make a swing top, retreat, then make a marginally higher high on negative divergences. Whilst that topping process is going on, commodities, yields and inflation should be rising. Historically, commodities peak after stocks, and should start to outperform going forward. So I don’t see stocks as starting a bear here, but starting their topping process under growthflationary conditions, and as they start that process commodities should become the beneficiary of money moving out of safe havens until inflation becomes excessive. So I think stocks will peak a little higher, but for the retreat and then the marginally higher high, there isn’t a great return on staying long. All this is using history as our guide – anomalies can occur.

  5. Fwiw, there is an interesting fixed cycle count for SPX due on Mar 26, and of course a seasonal cycle due on Mar 20. Certainly Gann cites both as timing indicators.

  6. Los Angeles Fire and Police Pension is allocationg 5% to commodities for the very first time. This means $800 million. Inflation cometh ?

    Well done on your trades as well.

  7. A CME left the sun Friday morning, headed right towards earth.Stay tuned for this email list to advance warning of geomagnetic storms. If you get a yellow or red alert and it’s morning where you live, check back before you go outside… it may have subsided before your evening.If it’s late afternoon or evening where you are, then think about going outside, or even taking a drive to the country to get away from city lights. We won’t know for sure how effective the CME will be until it passes the ACE spacecraft, only 45 minutes upstream. This give us about 2-3 hours of warning for auroras. Obviously a red alert will mean auroras at much lower latitudes, and brighter, than more typical moderate storms. ^ / \ Prof. Patricia H. Reiff Date: Thu, 14 Mar 2013 16:03:04 +0000 To:

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