🟩 4 True Market LeadersEven though I am 100% cash, i am carefully looking at some of the True Market Leaders (TMLs) that I have traded recently. These act great during the correction and could provide an actionable buy points.
Here is the list of names.
NASDAQ:SMCI
NASDAQ:NVDA
NASDAQ:META
NYSE:ANET
PRO TIP:
I always use 2 alerts - one which is above the pivot and one underneath. I call the first one
✅ GOOD ACTION
and the second one
❌ BAD ACTION
I put these alerts on anywhere between 15-30 stocks. And watch how the market reacts. What I want to see is a bunch of ✅ GOOD ACTION alerting me. This shows me that the market is worknig well, when I get a bunch of ❌ BAD ACTION, I know the makret it turning.
Tintintrading
🟩 VIX is coming to 18 month low🚨🚨 ONE LINER 🚨🚨
Attention, traders! The Volatility Index ( TVC:VIX ) is approaching an 18-month low, which could indicate a strong bullish signal for the market.
Background : Two months ago, in December 2022, I discussed the significance of the VIX dipping below the 20 level as a key milestone for a bullish market. Today, I want to dive deeper into this topic and share with you three compelling ideas that support the notion of an imminent bullish market. Let's explore the historical context and see how this information can help us make informed decisions in the current market.
💎 IDEA 1 OF 3: VIX as a Key Reversal Indicator
Since 2022, the TVC:VIX has demonstrated a strong correlation with market reversals when positioned under the 20 level. This pattern suggests two possible outcomes:
If the correlation breaks and VIX continues to stay low, we might see a sustained bullish trend.
If the market reacts positively to today's FED communication, it could further solidify the bullish sentiment.
It's essential to keep an eye on the market's reaction and the VIX's behavior from this point forward. During the bear market, the VIX typically fluctuated between 20 and 32, so a sustained drop below 20 could indicate a significant shift in market dynamics.
💎 IDEA 2 OF 3: VIX Levels During Market Rallies
Historically, a VIX level below 20 is often associated with market rallies. Although we are currently above 20, the VIX remains relatively elevated compared to periods of strong upward trends. As the VIX moves closer to the 20 level, it's important to watch for signs of an impending bullish market rally, similar to what we experienced on December 4, 2022.
💎 IDEA 3 OF 3: VIX as a Market Transition Indicator
In previous market transitions from high volatility bear markets to low volatility bull markets, the VIX played a crucial role. As the VIX pushed below the 20 level and remained there long-term, it allowed the market to rally upwards. We can use this historical precedent to study the current market and determine the probable direction.
CONCLUSION :
The VIX nearing an 18-month low presents a compelling bullish signal for traders. By analyzing the VIX's behavior as a key reversal indicator, its levels during market rallies, and its role in market transitions, we can gain valuable insights into the market's probable direction. Keep an eye on the VIX as it approaches the critical 20 level, and stay tuned for updates on the evolving market landscape.
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Here is a section for the real trading geeks who want to learn further:
Let's examine some historical examples that highlight the VIX's behavior in relation to market trends.
Example 1: 2009 Bull Market Rally
In March 2009, the VIX dipped below 40, a significant milestone after the 2008 financial crisis when it had reached an all-time high of 89.53. As the VIX continued to decline, the S&P 500 rallied more than 60% by the end of the year, marking the beginning of a new bull market.
Example 2: 2012 Market Rebound
In 2011, the VIX spiked above 40 during the European debt crisis, causing increased market volatility. However, by early 2012, the VIX had fallen back below 20, coinciding with a strong market rebound. The S&P 500 gained over 13% that year, reflecting a renewed sense of optimism and stability in the market.
Example 3: 2016 Post-Election Rally
In the months leading up to the 2016 U.S. Presidential Election, the VIX experienced increased volatility, hovering around the 20-25 range. After the election, the VIX dropped below 15, and the stock market began a multi-year rally that continued into 2018. This period of low VIX levels correlated with significant gains in the S&P 500.
These historical examples illustrate the VIX's ability to signal market sentiment and direction. When the VIX drops below key levels, such as 20, it often precedes a bullish market rally. By monitoring the VIX and its relationship with the overall market, traders can make more informed decisions and capitalize on potential opportunities.
Happy trading from TinTinTrading!
🟨 $ATAT – what i am looking forI really like the way ATAT is acting.
Here is my note from this moring:
$ATAT appeared to be one of the more promising opportunities at the beginning of the week. Although it experienced some decline on both March 8th and 9th, it managed to maintain a position above the critical lower limit of its base, represented by the red line on the chart. Compared to the overall market's downward trend on Friday, ATAT performed comparatively well. Therefore, it's recommended to monitor this stock to see if it can recover and regain momentum towards the pivot.
🟨 SP500 based on YoY GDP ChangeVolatility in many times in the market is bad and the stock market is a mirror of the economy.
When you go back prior to the Great Bull Market (1980s), you wll see that there were very wide swings in real GDP. These are the Boom and Bust cycle.
Now, as the FED evolved its policies it learned how to contain the market and flatten the Boom and Bust cycle and flatten the economy. And you can see that when we have the low volatility in GDP, the market has been very much accustomed to this.
However post 2020 we are more volatile then ever. This is exactly why the FED is stepping hard on the breaks until they for sure put a cap on the upside and on the inflationary side.
It is again interesting to see that Volatility is just bad for the market.
✅ UPDATE 2: Whaley Breadth SignPost I am updating for 2nd time the SignPost after the Whaley Post.
Make sure you see the section related ideas under the main text to this idea. This will show you links with timestamps of the first time I wrote about it a month ago.
So far the action has been to the point of my expectations.
I will use this chart further on during the year to see how it moves.
✅ UPDATE: Whaley Breadth SignPostI am updating how we are progressing on the post I shared on 4th of FEB
So far the action is normal compared to historical precedents. Read the linked post.
My anticipation is that we can go another 3% lower from here.
I wil use this signpost as a map for the year unless we start getting large deviation from it.
🟩 Whaley Breadth Thrust Signal - SignPostsWhat can help us guide forward expectations?
According to the Whaley Breadth Thrust Signal there is Normal and Abnormal action
FIRST 6 WEEKS (end Feb)
- 3-5% pullbacks would be normal
FIRST 12 WEEKS (end Jul)
- Forward Gains are approximate 12%
- 5-6% pullback would be normal
6 MONTHS Forward
- Forward Gains are approx +17%
I HAVE MADE THE WHALEY BREADTH INDICATOR FREE FOR ANYONE WHO WANTS TO ACCESS IT. GRAB IT IN THIS LINK:
JANUARY TRIFECTA after a down year
- Forward Gains are approx. +28%
🟨 January - Massive BULLISH SignJANUARY HAS A PROVEN PREDICTIVE POWER FOR THE END OF THE YEAR
WHY THIS MATTERS
This indicator has been 90% correct since 1950. It is used on the SP500.
BY THE NUMBERS
The January Trifecta (def below) has occured 31 years since 1950. 28 of them we have followed with positive year for SP
Average gain during January Trifecta is +17%
If January Barometer closes above 5% (CURRENTLY +6% for month), average gain is 17.5%
If you are coming from a negative previous year (like we have 2022) and we get the January Trifecta the average gain is 28.9%
Down year follwed by January Trifecta has happened 10 times since 1950. Look them up: 1954, 1958, 1961, 1963, 1971, 195, 1995, 2012, 2019, 2023
THE DEFINITIONS
Santa Clause Rally - last 5 days oof Dec + 2d Jan
January "First Five Days" - the total move for the first 5 trading days of Jan
January Barometer - the total move of the Jan Mov
January Trifecta - Positive signs from Santa Clause Rally, First Five Days and the Barometer
🟩 STOCKS ABOVE 200DMA - BULLISHWhile the general market indexes has been unconstructive (top chart) the stocks underneath the service are improving (bottom chart).
In this case we are looking at the stocks in the SP500 that are above their 200D MA (Picture is similar for the Nasdaq) - this is a bullish indicator and the reason why I am starting to dip toe in the water.
Remember this is was one of the main indications when I issued a sell alert in November 21.
🟨 Climax Run - $TLRY exampleI have covered this in my education blog, but here is a great example of a Climax Run Stock
Checklist
✅ Price looks almost vertical
❌ Run occurs after at least 18 weeks of the first base. (This run is 5 weeks after first base)
✅ Rapid advancement +180%
✅ Last 8 days before drop was 7 out of 8 days up
✅ Last 2 trading days we saw the largest trading range
❌ Stock is not extended above 200d MA - since no 200 days of trading (early IPO)
❌ No Stock splits
🟨 Ned Davis - 10 Day Advance/Decline On Thrusday an important momentum thrust indicator gave a buy signal with NYSE advancing stocks leading declining stocks by better than 1.91 to 1 over the last 10 trading sessions.
The Thrust has been backtested by NDR (Ned Davis) and we can see very impressive statistics.
I have developed an indicator for this and it is available in my profile. Here is the link too:
🟨 Fastest FED Tightening CycleIn 2022 we witnessed the fastest tightening cycle ever made by the FED.
As I have covered before in the beginning of 2022 - the speed of the tightening (no so much the aboslute value) are key in how the general market indexes are going to act. The faster the speed the more pressure the market will see while trying to make a move higher - hence the more bearish the signal.
Currently the FED has raised Rates by 3.75pct in only 9 months!