Secret Summits & Nobody Said It Was Easy

Nobody Said It Was Easy (8/5)

Courtesy of Allan Harris of AllanTrends

New Signals

SPX Hourly Trend Model————> LONG

NASDAQ Hourly Trend Model——> LONG

TLT Daily Trend Model————-> SHORT

AAPL Daily Trend Model———-> LONG

Weekend Market Comments

Stock Indexes

I really was hoping for, “The Perfect Set-Up” described last weekend: A higher high for the week coupled with a lower close. Instead, all major indexes closed higher for the week, albeit not by much. Since none of the major (or minor) market indexes reversed Long in their Weekly Models, the April-May TOP pattern is still in effect.

[click on charts to enlarge]

DJIA 2011-2012

 

DJIA Weekly Trend Model

 

Note below that the broader Value Line Index (and IWM) did complete, “The Perfect Set-Up,” by closing lower for the week, but, in my view, the major averages needed to confirm and they did not.

Value Line Weekly

 

The VXX Hourly Trend Model has had just a stellar Short Signal from July 26th. As you can see in the Trend Table below, the Hourly Signal is up 11% (in one week) and the Daily signal is up 34% (in one month). As with the indexes, between the Hourly and Daily models, the meaningful trends are covered and trading these trends should be become very straightforward. These changes should make the trend models and this service easier to get and easier to trade.

VXX Hourly Trend Model

 

Commodities

GLD and SLV are acting like a married couple sleeping in twin beds. I am still waiting for one of them to join the other, either Long or Short, before any serious trading commitment. SLV has been very good to us this year, but I don’t care which of these ultimately prevails, I am willing to swing both ways.

USO reversed Long on July 3rd and after a sideways drift, turned up nicely with stocks on Friday. UCO turned up with USO and should outperform by 2X.

 

USO Daily Trend Model

 

UCO

 

Stocks & ETFs

Energy Select Sector SPDR ETF (XLE)

XLE Daily Trend Model

 

If both Oil and Stocks are headed higher, or, if either one of them is going higher, XLE may present an interesting play.

“The investment seeks to provide investment results that, before expenses, correspond generally to the price and yield performance of publicly traded equity securities of companies in The Energy Select Sector Index…..Energy companies in this Index primarily develop and produce crude oil and natural gas, and provide drilling and other energy-related services. Leaders in the group include ExxonMobil Corp., Chevron Corp, and ConocoPhillips.” (SectorSPDR)

 

The Trend Model does a nice job of getting out and then back in, which of course is what its designed to do and it has been doing it well with this ETF.

 

Netflix (NFLX)

NFLX Daily Trend Model

 

NFLX is a stock we are actively trading in the Expanded Service and the Daily Trend Model has been almost perfect. Buy at 80, sell at 108, buy back at 75, sell again at 71 and ride it down into the mid-50′s. With the DJIA up 217 points on Friday, NFLX was down for the day.

 

US Steel (X)

X Daily Trend Model

 

If the US economy is turning back up, one would think that US Steel would be leading the way. It’s two days into a fresh Buy signal. Below is a longer-term perspective, a weekly chart showing X being cut in half in about 18 months. Not good.

X Weekly Trend Model

 

Star Scientific (CIGX)

Let’s close this weekend’s update with our new “story stock,” CIGX.  On the chart below prices are hugging onto the middle trend regression line, not falling through to the lower channel as it has in the past, but consolidating along the middle trend line:

CIGX Daily Trend Model & Trend Regression Channel

 

CIGX Hourly

CIGX is beginning to get recognized as developing a disruptive medical technology that will affect diverse medical conditions, some catastrophic  and lacking any effective treatments. This just as the baby boom generation is entering that aging tunnel of afflictions. Below are two examinations of the fundamentals, the first an initiation of coverage by Gilford Securities and the second quite an entertaining bit of hyperbole by Patrick Cox of Agora. CIGX is a Strong Buy & Hold.

(1) Star Scientific, Inc. (NASDAQ: CIGX), A Disruptive Science?

(2) An Opportunity to Hit the Mother Load – Patrick Cox

 

TREND MODELS

 

Editors Note: Our resident pharma/biotech investor is not excited about Star Scientific at all. Here’s what Pharmboy wrote when the stock was trading at $4.85:

1. Products are tobacco related products and dietary supplements. Earnings are horrid compared to valuation. Yes earnings are growing, but at 4.85/share, and revenue of 1M……market cap of 750M…..that is not really sustainable. Things go through fads, and when they end, it comes very quickly.

2. Anatabloc is a supplement that is in GNC stores. I point to other supplements that have gone through fads that are no longer around. If I could remember, that would be great, but since I cannot, I will/cannot invest in something that has no medicinal value. (Oh, yeah….zinc lozenges…remember those?).

I am not a fan, nor will be in the near future…..

 

Nobody said investing was easy. 

Allan’s Trend Following Model is based on his trend-following trading system for buying and selling stocks and ETFs. Most trades last for weeks to months. Learn more about Allan Trends here. 

For a risk-free trial, click here for Allan’s standard service. More active traders might enjoy Allan’s premium service.

******

Secret Summits (7/29/12)

Courtesy of Allan Harris

New Signals

GS Daily——————->LONG

PBKEF Daily————->LONG

Weekend Market Commentary

Here is the GS Daily Trend Model chart going back six months:

(Click on charts to enlarge)

GS

 

Those are some nice trends, buying in December @ $100 reversing to short in April @ $116 and riding it down to today’s reversal long @ $100. Those are especially nice if you are using options for your trading. After three nice winners in a row, one would expect the next one to be off a bit. But expectations don’t work, even when we think they do it’s probably more luck than inspiration. I bought September 100 calls today, even though I “expect” that this market rally is about over.

The same logic applies to the S&P Hourly chart below. Even though I have been pointing out the ominous nature of the April-May TOP pattern, this trading model has a mind of it’s own:

SPX Hourly

 

It whipsawed in late June, but nailed the short term trends before and after with seven winning signals against two losers. Short term traders should be paying attention to this model, it’s on a roll.

Intermediate term, here is a chart of the Nasdaq Daily Trend Model:

NASDAQ Daily

 

A trading regimen of using SSO/SDS based on the SPX Hourly Model and QLD/QID based on the Nasdaq Daily Model would have made for some nice gains from both models over the past few months. There is no reason to think it will not continue, although as the regulators like to have me say, past performance is no guarantee of future results.

Finally, longer term, the chart that I expect will ultimately make us the most money going into the final five months of 2012, the DJIA Weekly Trend Model:

DJIA Weekly

 

The Perfect Set-Up: As you can see by the last bar on the weekly chart above, the DJIA closed at it’s high tick for the week. If it makes a higher high next week, then closes lower for the week, I intend to act aggressively on the short side of the market. Some definitions of these kind of “Buying Climaxes” require heavy volume and/or 52 week highs to qualify as an orthodox signal, but with yet another European “summit” and news from one of the Fed’s own regularly scheduled, “Secret Summit Among Fiends” due out on Wednesday, if this market can’t finish up by the close next Friday, I’m taking that as a bearish omen.

CHARTS OF INTEREST

USO Daily

 

XLE

 

XLF

 

Allan’s Trend Following Model is based on his trend-following trading system for buying and selling stocks and ETFs. Most trades last for weeks to months. Learn more about Allan Trends here. 

If you’re interested in a risk-free trial, click here for Allan’s standard service, or here for the premium service - for active traders.

Enter Email Address

%d bloggers like this: