Sunday, August 20, 2017

Ponzo Updates for SPY, QQQ & TLT + Trader's Outlook......08.20.17

This week's forecasts have changed only slightly from recent outlooks.  The SPY looks to be more susceptible to a pullback while the Qs remain bullish and TLT has adopted a wider range neutral stance. The instances of potential 5% + pullbacks have increased for SPY and QQQ.
An optimistic earnings season has managed to keep the markets in a buy the dip mood, BUT ...increasing tensions with China & NOKO internationally and a tide of anti-Trump attacks by the media may serve to destabilize an already tenuous political situation nationally.
Trader's Outlook has become cautious in anticipation of volatility rising....a reflection of the TLT forecast adjustment..

Saturday, August 12, 2017

Ponzo Updates for SPY, QQQ and TLT plus Trader's Outlook....08.12.17

This week's Ponzo updates reflect some divergence from recent forecasts.
We now have a black swan type scenario on SPY, not imminent but still looming as geo political tensions ramp up and increasingly expected volatility pops in the Fall pose a risk for vested positions.
QQQ looks slightly less optimistic than recent posts although the downturn last week really didn't impact the index significantly.  FANG stocks are increasingly at risk so keeping an eye on support levels in critical.
TLT has suddenly become significantly more bullish, moving out of its narrow range consolidation and despite numerous talking heads droning on about the impending collapse of the bond market.  
Trader's Outlook is bullish and reflects the obvious....bull trend still intact but increasing risk makes the whole investment game a precarious undertaking.
Thursday saw the biggest daily volume (and volatility) since February.  Friday's recovery was iffy both in terms of strength and volume with many likely holding their breath over the weekend waiting to see if NOKO is going to grace us with a nuclear winter or Yosemite delivers a blast to end civilization as we know it.  (readers in the Dakotas take've got good odds for survival....the rest of us are toast).

Sunday, August 6, 2017

Ponzo Updates for SPY, QQQ & TLT + Trader's Outlook.........08.06.17

This week's updates forecast a slightly more tepid outlook for SPY and QQQ while the TLT forecast remains firmly in the channel established 2 weeks ago. The historical bias for a summer sell off has so far failed to materialize as the VIX hovers at 10 and incremental new highs are reached.  The dollar has plunged below long term support and the low volume slog continues to create a risky trading environment with option premiums at dismally low levels and occasional flash crashes (due to a number of factors) scaring the bejesus out of risk adverse traders.
I've added a neutral range bracket (yellow) for all models set to one standard deviation.
This helps me set up option trading strategies like butterflies and/or iron condors easily.
Trader's Outlook is moderately bearish for next week.

Sunday, July 30, 2017

Ponzo Updates and Trader's Outlook for SPY, QQQ & TLT.......07.31.17

SPY and QQ finished the week only pennies off the previous week's close while TLT pulled back 2%.  The surprising  forecast this week is the Qs, which had been bullish, but which has now become almost hyperbolic in outlook.  While FANG and its outliers have continued to gain momentum recently this outlook looks like some kind of statistical anomaly rather than a realistic scenario in the next 5 months.  Of course these are just probability scenarios based on previous historical patterns and given the current frothy levels of the markets may not reflect likely outcomes but, it does provide some food for thought.
Trader's Outlook is net neutral for next week.....reflecting the longer term forecast for TLT which looks ripe for iron condor & butterfly positions..

Saturday, July 22, 2017

Ponzo Update and Traders Outlook..SPY, QQQ, TLT.....07.24.17

This week's Ponzo forecasts reveal a significant risk increase for SPY and QQQ while the prospects for TLT, which Ponzo turned bullish on last week, now show the greatest potential for longer term gains.  Summer months are historically weak performer, although that hasn't been the case in recent years.  As the yield curve flattens once again and macro economic fundamentals begin to deteriorate the possibilities for treasuries and composite bond ETFs like AGG look increasingly attractive.
The Trader's Outlook is modestly bullish as we roll into earnings season and increased expectations.
Trading volume has been running about 50-70% historical levels and periodic flash crashes in oil, the Euro, the dollar and various select stocks suggest volatility surges may confound stop orders as liquidity becomes thin and spreads widen.
It's hard to find any good risk/reward scenarios these days.

Monday, July 17, 2017

Ponzo Updates for SPY, QQQ & TLT....07.17.17

This week's updates have QQQ wildly bullish and TLT in a renewed bullish mode.   TLT has undergone a modest pullback recently and may be resuming its previous long term bullish pattern.
QQQ is the standout of the bunch as analysts' consensus favors FANG and its outliers as the GO TO favorites. Discounting the volatility of Tesla and Bitcoin (and the associated risk danger) QQQ valuations continue to frame well above long term benchmarks as the markets talking heads issue daily warnings on the coming market collapse.  Not a time to get heavily vested.

Monday, July 10, 2017

Ponzo Updates for SPY, QQQ and TLT...07.10.17

This week's Ponzo Updates have the SPY looking at an expanded trading range  (potential volatility) while the recent pop in QQQ has actually resulted in a narrowed lower volatility trading range outlook.  TLT, currently undergoing a pullback from severe overbought levels, has pulled back about $6 from recent highs and bears watching if it penetrated $ which point we would expect a potential bottoming pattern to develop and buying opportunities to develop.