Tuesday, February 28, 2012

Trades 28.2.2011

BUY for 1 day, sell tomorrow at close:


Trend Following update

The Trend Following system have stepped out of most of the long positions. It won't try to long Dax anymore  below 7167 and S&P500 below 1391. Those targets seem very high to be reached during this week.

US money flow 27.2.2012

Money inflow decelerating. Shorter term cumulative money flow already turned negative again.

Friday, February 24, 2012

Trade II 24.2.2012

BUY LHA, hold 1 day and sell at Monday's close.

Trade ideas 24.2.2012

BUY at today's close: DPW, DB1, BMW, TKA sell on mondays' close.

BUY HEN3, if close < 47.826, profit target 1.5%, if no target, sell at open 29.3.

Dax update 24.2.2012

Dax cycle is currently topping / heading down.

MSI also topping / heading down.

Volume confirms down movement.

Currently, many extreme overbought indicators reveal that the stock index is losing it's momentum. Even the topping process could be prolonged, eventually the prices has to come down and follow the gravity. 

US money flow 23.2.2012

Money flow +-0. During last 10 days, there are 5 positive and 5 negative money flow days. Big investors are not taking any big moves right now.

Thursday, February 23, 2012

Trade ideas 23.2.2012

BUY at close (maximum 2 todays trade):

BMW if close < 69.44
TKA if close < 20.21
FME if close < 52.9
HEID if close < 38.57
DAI/DCX if close < 45.65

Sell tomorrow with 1% profit, if open gap > 1%. Otherwise profit target 5% from today's close. If no targets met, then sell on Monday's opening. 

Dax indicators and sentiment 22.2.2012

Coming correction

Dax has diverged from it's 20 day price channel and MACD is showing negative divergence. Dax would be expected to touch it's 20 day moving average / rising trend line above 6700-6750. The lower level of price channel is at the level 6400 which is the second price target.

Dax McClellan is again pointing down.

Highly negative TRIN readings show significant selling interest. 

Volume Index is at the level 6500 which could be reached soon.

A sentiment study from Cognitrend reveals that investors are becoming more pessimistic and thus adding their short positions.

US money flow 22.2.2012

No big moves yet.

Tuesday, February 21, 2012

Trade for 22.2.2012

Buy METRO at open if open < previous close. Profit target 2,5% / stop loss -2%. If no target or stop, then sell at close.

Trade ideas 21.2.2012

BUY at close:

FME if close <= 53.04
MRK if close <= 79.18
Beiersdorf if close <= 46.44

Dax McClellan update 21.2.2012

If Dax will close the day with 27 declining and only 3 advancing stocks, then we will have declining McClellan Summation Index and higher probability for declining more.

Hang Seng, AUD and JPY

Hang Seng reached it's Fibonacci 61.8% and now tries to reverse. Decline below 21200 could signal further decline to 20500. Daily MACD is weak.

Even the Japanese have intervened Yen, trying to weaken it, they might have succeeded in the short term. Usually these kind of effects are not long lasting. Investor gauge AUD-JPY made a reversal candle yesterday by touching Fibonacci 76.8%, and is now trying to head lower.

Dax statistics 20.2.2012

Not much to say, but wait

Long term view is bullish as long as stocks are making new highs. We haven't seen new lows for a while. 

Long term bullish view can be changed into bearish if we  see new lows in a future, but there are only few stocks near their 52-week lows. Averagely Dax stocks have risen 46.41% from their lowest levels. Averagely stocks are -15.16% from their highest points. There are 15 stocks less than -7% from their highs.

Blue chips have been leading the latest advance in stocks. Technology and small caps have been lagging.

So far investors have pushed all the Dax stocks above their 50 day moving averages. This kind of condition hasn't been very common in the history.

Oversold condition is literally at zero, even the overbought condition has loosened a bit.

McClellan Summation Index again started to point higher levels after temporary decline.

Dax Volume Index has been lagging during the whole rally, which indicates investors haven't totally been interested to participate.

Global stock market looks clearly that US has been leading the rally up. Nasdaq and S&P500 are already on the positive track annually while others are lagging. We can at least conclude that FED programs are doing well.

I have been calling a top many times lately, and now I cannot do anything but wait. There are few options how the overbought condition usually fades away: condsolidation, small pullback, correction.

Sunday, February 19, 2012

Trades for Monday 20.2.2012

DBK: long if open < last close, short if open > last close, profit target 2,5%, otherwise sell at close
IFX: long if open < last close, short if open > last close, profit target 2,5%, otherwise sell at close

US money flow 17.2.2012

Back on the positive money inflow.

Friday, February 17, 2012

Index trade

According to money flow studies it would be 70% profitable to open short position for two days. Thus I try buying DES2 etf at price 34.050.

Trade closed

Yesterday's short term trade with Metro was closed with 1% overnight profit.

Dax indicators 16.2.2012

Last week I was expecting Dax futures to decline at least to touch it's rising trend line or SMA(20). None if this hasn't happened yet. In despite of this, Dax hasn't even able to make a new highs for 5 days.

Volume still hasn't been interested of this rally. Even the latest performance points down.

Accumulation took a spike downwards, so the investors were selling heavily. 

Dax McClellan indicator is already pointing it's way down.

Dax cycle indicator has also peaked. In the below graph, I have marked all the previous cases when the indicator has peaked. You can compare it with index.

It is clear that the uptrend is not very strong and it is losing it's momentum. My trend following system keeps 6810 as a critical level to stay in an uptrend. Even the uptrend holds, the upside profit should be limited at this point. Investors have been buying and hoping and soon they could be selling on the news.

S&P500 resistance 17.2.2012

The recent money flow statistics has some evidence that the next two days would be bearish. This would be verified with the current resistance level S&P500 is facing. At least the index has tried to break above 1358.6 but haven't succeeded yet. There is also the previous April 2011 high at 1376.1. S&P500 remains in an uptrend above 1345.

US money 16.2.2012

We saw small money outflow again. It seems, that investors are not willing to take big bets at the moment. Anyway, block trades outflow exceeded total outflow even the market went up. Historically this hasn't be a good sign for short term. Taking a short position or buying puts for S&P500 today and closing it on Tuesday open should be a profitable trade at the moment (34 % succeed rate). I would take the same position for Dax also.

Thursday, February 16, 2012

Short term trade 16.2.2012

Long METRO, if close <  28.54, sell tomorrow at open if profit >= 1%, otherwise 5% profit target. If no targets met, sell on monday open.

Trend following update 15.2.2012

The Trend following system stepped out of the safer markets (like Dax, Dow Jones, S&P500) and still trying to stay in uptrend with riskier assets.

US money flow 15.2.2012

In pause mode, small money inflow, small money outflow. Need to see something dramatic.

Dax opening 16.2.2012

Gap down. Check out the gap statistics.

Wednesday, February 15, 2012

1 day trade ideas

Buy at close:

- Deutsche Bank if close between 33 - 33,69 is probable
- Lufthansa if close between 10,61 - 10,83 is probable
-  Infineon Technologies if close between 7,19 - 7,37 is probable
- Heidelberg Cement if close between 37,5 - 38,12 is probable

Sell at close tomorrow.

Yesteday's trades can be found here.

Dax indicators 15.2.2012

Topping process?

Dac cycles indicator is indicating a little weakness first time for ages, which could mean we are near a short term market top. Even the market would go higher from this point, it would be probable that we will have lower level during the next 1 - 4 months.

Dax McClellan Summation Index hasn't been able to reach higher levels any more. SMI will keep declining if we get at least 3 declining stocks today (out of 30).

The best performing stocks have had beta approximately around 1. Above 1 investors remain bullish.

It is difficult to say how high we would be going even the indicators are yelling overbought and some of the indicators have already reached their all time high level.

Check out my Trend Following -page. According to this model, Dax will try to step out of rising trend if it closes this week below 6810. So, watch out this level. Next week will be different.

US money flow 14.2.2012

Mid term money flow still negative, but could turn into positive and thus indicating higher high ahead. Still need to watch this carefully today and have a confirmation.

Tuesday, February 14, 2012

Trading diary (for testing purposes)

FRE - short if open < close yesterday, profit target 2,5%, otherwise buy at today's close
FRE - long if open > close yesterday, profit target 2,5%, otherwise sell at today's close

HEN3 - short if open < close yesterday, profit target 2,5%, otherwise buy at today's close
HEN3 - long if open > close yesterday, profit target 2,5%, otherwise sell at today's close

MEO  - long taken at close 29,03, sell at open if (open - close) / close >= 1, profit target 5%, otherwise sell at open tomorrow

SIE - long position taken 10.2.2012 at close 74,37

US money flow 13.2.2012

Mid-term money flow still a little bit negative, so need to watch carefully today.

Monday, February 13, 2012

Dax and global indexes

A short peak to global indexes and technicals

From the table below you can find which of the markets and asset classes are above or below their simple 200 days moving averages, which 20 days moving averages are below 200 days averages and which markets have positive MACD(12,26,9).

Dow Jones Industrial Average and France's CAC40 are the first weak indexes. Japan's Nikkei 225, Russia's RTS, Taiwan's TSEC and Shanghai Stock Exchange Composite turned below their 200 days moving averages.

MACD SMA 200 20 vs. 200
d_1 d_2 d_1 d_2 d_1 d_2
Goldsilves (XAU) -1 1 -1 -1 -1 -1
Oil (OIX) 1 1 1 1 1 1
natgas (UNG) 1 1 -1 -1 -1 -1
agric (DBA) -1 -1 -1 -1 -1 -1
S&P500 1 1 1 1 1 1
Dow Jones -1 1 1 1 1 1
Nasdaq 1 1 1 1 1 1
Russell2000 1 1 1 1 1 1
Japan 1 1 -1 -1 -1 -1
Germany 1 1 1 1 1 1
Finland 1 1 1 1 -1 -1
UK 1 1 1 1 1 1
France -1 1 1 1 -1 -1
Russia 1 1 -1 1 -1 -1
Brazil 1 1 1 1 1 1
India 1 1 1 1 -1 -1
Hang Seng 1 1 1 1 -1 -1
SSEC 1 1 -1 -1 -1 -1
Korea 1 1 1 1 -1 -1
Taiwan 1 1 -1 1 -1 -1
Turkey 1 1 1 1 -1 -1
Malesia 1 1 1 1 1 1
Emerging Mkts (EEM) 1 1 1 1 1 1

Below, I have calculated the subtraction of positive and negative MACDs from the above table, which gives 16 positive and 2 negative. You can see how this global bullishness usually affects to Dax index. So, the current bullishness has been historical when comparing different indexes and seeing their MACDs positive lately.

MACD short term view

In a longer term of view, you can see that the volatility of this index has been growing. In the other words,  the indexes and asset classes seem to have stronger correlation.

MACD long term view

Saturday, February 11, 2012

Dax technicals 10.2.2012

Overbought condition easening

Dax dropped from the ceiling of 20 day price channel. Usually this has meant at least testing of a 20 day moving average which lies below 6600 near rising trend line. If Dax breaks down below the rising trend line and 20 day moving average, it would add the probabilities to test the bottom of price channel near 6200.

Now we have 3 stocks with 20 day performance negative.

The amount of overperforming stocks have been increasing. Usually this hasn't been a good sign (in despite of the latest performance which has been exceptional).

Clearly we can see that investors have interest to reduce the beta (one month beta) of their portfolios. The latest developement has been risk averse and could signal further drop in the prices.

TRIN was negative, thus revealing that declining stocks got bigger part of the trading volume. 

Volume Accumulation/Distribution dropped below -500, which revealed heavier than average selling.

Dax volume index seems to be reacting stronger on the downside than the price index.

Backtesting results from the history data reveals, that if TRIN is negative, Volume A/D below -500 and Volume Index decreasing, there is 37% probability for a positive next day. Adding that the condition has been extremely overbought, this drop in prices would easen the situation and make it healthier. Anyway, we need to watch the situation carefully, if the Dax decides to drop below 6600 and signal a drop below 6200. 

US money flow 10.2.2012