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Market Timing

Thursday, 16 July 2015

I received an email today from a loyal MIPS member and his opening line was "Up, Up, and Away!!!".  As Robert explained, he is thinking (and hoping) that the acceptance of the aGreekment by the Greek Parliament will clear the slate for worldwide markets to go up from here.  I am in the same boat, but at this point, I would say "Up, Up, and Away???"

As I told Bob, the 3 "Things" controlling the market that I mentioned in one of my recent blogs (see below), have all dissipated.
  1. The Greeks caved in,
  2. China "fixed" its stock market bubble problem by "outlawing" trading, and
  3. Aunt Yellen repeats that there will be rate hikes later, but they will be small and gradual (thank
      you, Aunt Yellen).

I will remain hesitant until the recent rise in the SPY "plays out".  In the graph below, you will see that the SPY has risen from $204 on 7/7/15 to $212 on 7/16/15.  That's about +4% in 7 trading days.  And, the SPY moved into what we call "No Man's Land" today. 

The real challenge lies at the all-time high resistance level in the SPY at $213.8 (from two months ago on 5/20/15).  We are now less than 1% below that level, but would need to break above it with some degree of "force" (like maybe a big "gap" up), and stay above it for a while. 

If that happens we can expect some significant gains; but if not, the outcome will most likely NOT be pretty.
Either way, MIPS will "map out" what we should do,  so we should make money either way.
STAY TUNED !!!






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<<< Previous Blog >>>
            7/2/2015



MIPS Members:

Here we go again.  The markets are trading back and forth, with no clear direction. That is because there IS no direction, other than sideways.  And, as we have said many times before, sideways or flat markets result from uncertainty amongst everyone in the market.  The volatility you see in flat market comes from the floor traders that can trade with up to $200 billion in a very short time period.  Their time horizon is in minutes/hours, NOT days/months like us.  The floor traders can trade long in the morning and short a few minutes/hours later, often more than one round-trip per day. The ignorant little "day traders" usually get whipsawed trying to trade in these types of markets.

The uncertainty in the recent past has been about "nothing".  The market has been mainly focused on things going on in Greece, China, and the Fed.  The events surrounding all of the above are all very important, but most likely have very little long-term ramifications for the USA. 

Greece
There are really only two choices in the current Greek situation, and neither will greatly effect the USA.  Why? Because, the GDP for Greece is less than that of most states in the USA and even less than some of our larger cities. Where Greece can affect the USA/Europe/the World is if it causes great pain in the Euro Zone.  I don't see that happening; but, of course, it could.

China
After a stock market "bubble" of almost unbelievable growth (kind of like our 1990-2000 tech bubble), the China market fell over 25-35% in the last 3 months.  About 85% of the stocks on the China stock exchange are owned by the "little guys", who have been coming in to the Chinese markets in record numbers (mostly on margin).  Of course, that is a recipe for disaster. The Chinese gov't. handled it this way - they made it against the law for big guys to trade for several months.  Simple in a communist state, but not so here.  Anyway, short-term this stopped the slide and their markets have even bounced back almost to their "pre-crash" levels (no harm really done outside of China).

The Fed
The Fed has been awfully quiet and timid about raising interest rates even just a little.  Aunt Yellen, the STOCK MARKET HERO, is not going to do anything to upset our markets, so you can rest easy here (at least for 2015).  Of course, the press will probably scream "Disaster" when the Fed first raises rates, even if only by 1/4 of 1%; but it should not get much attention from investors or cause any noticeable pain.

Here is where we stand now:
So there you have it... nothing out there now to upset our markets, but the big guys and the press can make a big issue out of any news (no mater how important or unimportant), and put the market on a new trend of their choosing (up or down).

In the graph below, you will see that the market dropped about 4% in the ten trading days between 6/8/15 and 7/7/15, and has bounced back some since then.  The market movement in the next few days will depend on what happens in Greece, and then it will go on from there on the next wave of useless news. 

But, we still need to know how to trade this market; and for that we will depend upon the MIPS signals.

Current MIPS Signals    (MIPS Members only)
MIPS 1,2,34 Signals...  http://www.mipstiming.com/current_signals
MIPS/Nitro Signals.....  http://www.mipstiming.com/current_nitro_


 

Posted by: Dr. G. Paul Distefano AT 09:37 pm   |  Permalink   |  Email

MIPS Timing Systems
P.O. Box 691047
Houston, TX  77269

An affordable and efficient stock market timing tool. Contact MIPS
281-251-MIPS (6477)
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