- Tag Archive for "spx"

Risk vs. Internals

Published on June 15, 2013 by DownsideHedge in Featured, Market Comments, Market Risk, Twitter Sector Sentiment, Twitter Stock Sentiment, Twitter Support and Resistance

Stock market indicator from the Twitter stream

Over the past week our core market health indicators fell slightly, but we made no changes to our core portfolios. The details are in this post. We’re seeing a battle between event risk and market internals. Overall our measures of market health and internal structure are constructive, while our measures of risk are signalling skittishness by investors. The S&P 500 Index (SPX) held up fairly well last week in the face of several market scares. It seemed like every day brought some new rumor that drove the market up and down. But when the dust settled SPX only gave up a little over one percentage point. Meanwhile measures of intermediate term breadth like the percent of stocks above their 200 day moving average and the bullish percent index still have very healthy readings. Looking at market internals this appears to be a garden variety consolidation. We’re not seeing any real damage under the covers as price pulls back. SPX has held a critical support level near 1600 and bounced twice

Tags: spx

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Finally Some Excitement

Published on June 12, 2013 by DownsideHedge in Market Comments, Market Risk, Twitter Stock Sentiment

As intermediate to long term investors we often ignore the daily gyrations of the market. We don’t pay a lot of attention to what happens during the day because most of the time it just doesn’t matter. In fact, a lot of times we’re flat out bored and have difficulty finding things to talk about. Our days are usually filled with waiting for weeks on end for something that changes the underlying technical structure of the market enough to change our portfolio allocations. Those changes are usually in small increments so they’re boring events too. I’ll even make the confession that I don’t have CNBC or Fox Business on TV during the day. I have Fast Money in my DVR, but only because it runs an hour after the market closes so it covers earnings announcements. Long story even longer, most of the time what we see on a daily basis is irrelevant. However, once in a while we get near an inflection point where things can get exciting very

Tags: spx, vix, vxv

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Uptrend Resumes

Published on June 8, 2013 by DownsideHedge in Featured, Market Comments, Twitter Sector Sentiment, Twitter Stock Sentiment, Twitter Support and Resistance

Our core market health indicators didn’t change much this week so we made no changes to our core portfolios. Market Positives Our market risk indicator started showing concern during the selling on Thursday, but recovered substantially after the market bounced. This is the indicator we feel is most important to watch in the current environment. Higher concern about the Fed tapering QE or Japan’s woes will almost certainly show up in market risk before we see it in any of our other indicators. As we mentioned on Monday we felt like the S&P 500 Index (SPX) should catch at 1600 due to multiple forms of support converging. The two strong days that have followed indicate there were buyers waiting for that level which creates a good line in the sand. Our measures of market quality, trend, and strength are all positive. The selling last week didn’t do any substantial damage which indicates strength in the internal structure of the market. In addition, our market stability indicator held up fairly well

Tags: spx, xlb, xle, xlf, xli, xlk, xlp, xlu, xlv, xly

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Where to Catch?

Published on June 3, 2013 by DownsideHedge in Market Comments

Clusters of Support for the S&P 500 Index (SPX)

Over the weekend we mentioned that although the S&P 500 Index (SPX) has painted three very ugly daily candles in the past few weeks we still believe we’re merely seeing some healthy consolidation. Our only concern at the moment is event risk, not general market weakness. As a result, we’re fairly long in our portfolio allocations, but watching our market risk indicator very closely. In order to guess how far the market will retrace we like to use very simple tools like trend lines, moving averages, support levels generated from the Twitter stream, and Fibonacci retracement levels. What we look for is a cluster of support. Take a look at the chart below and the 1600 area on SPX jumps out as a likely level for the first major bounce (or even bottom) of the consolidation. Here are several ways we arrived at that number. One fairly reliable chart pattern that we like occurs when price falls sharply for a few days and then consolidates higher (and then breaks the

Tags: rut, spx

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Healthy Consolidation…So Far

Published on June 1, 2013 by DownsideHedge in Featured, Market Comments, Twitter Sector Sentiment, Twitter Stock Sentiment, Twitter Support and Resistance

Over the past week we saw encouraging signs from our core market health indicators even though the stock market was falling. As a result, we took the opportunity on Friday to reduce our hedges and add more long exposure to our portfolios. Here are the details. Market Positives Our measures of market quality, trend, and strength all improved substantially last week. Mixed Signals Our Twitter Sentiment Indicator for the S&P 500 Index (SPX) is starting to show weakness along with the general market. Over the past two weeks the daily readings have been mostly positive, but declining. Friday printed a fairly negative reading of -16, which is the lowest reading we’ve seen since mid April. It is our first indication that traders on Twitter are becoming decidedly bearish. In the individual tweets we’re seeing a lot of top calling rather than calls for consolidation. Smoothed sentiment diverged from price for a little over a week and is now following price lower. This puts us in a position where we can’t

Tags: spx

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Market Showing Healthy Signs – Adding Long Exposure

Published on May 31, 2013 by DownsideHedge in Featured, Long / Cash Position, Long / Short Position, Long Cash Performance, Long Short Performance

Over the past week most of our core market health indicators improved. Our measures of the economy are still negative, but improving slowly. Our measures of risk showed some weakness that signals investors are getting a bit more concerned about the market. However, we believe that this is a normal condition when the market stalls rather than an indication of substantially lower prices. Our measures of market quality, trend, and strength jumped substantially this week. It is interesting that our measures of trend followed quality and strength in going positive especially since the rally out of the November lows has trended so strongly. It is an indication of how odd this rally has been from a underlying technical perspective. The positive changes in market trend is causing a change in our core portfolio allocations. Our Long / Cash strategies are now 80% long and 20% cash. Our Hedged portfolio is now 90% long and 10% short (using a simple short of the S&P 500 Index — or the ETF

Tags: market health, sh, spx

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Rotation to Financials and Technology

Published on May 30, 2013 by DownsideHedge in Market Comments

We haven’t commented much on the general market and market internals lately due to the completely boring nature of this latest rally. When a rally is being fueled by everyone believing it will go up due to outside forces (central banks printing money and buying debt) nothing else matters. As a result, we haven’t been able to pinpoint anything interesting that would give you (or us) any insight into what the market is doing. Well we’re finally seeing some interesting action under the covers. The S&P 500 Index (SPX) has given back just 3% from intra-day peak to trough and barely over 1% on closing prices. Not very exciting, but everyone is suddenly asking if this is finally the top we’ve all been waiting for. For some insight we like to look at individual charts and see if everything is being affected or if the selling is localized. Broad based selling is bad. Localized selling is good…if it results in rotation…which is what we believe is causing the current sloppiness

Tags: csco, goog, hpq, intc, jnj, ko, pfe, spx, t

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Twitter Sentiment Looking for a Direction

Published on May 28, 2013 by DownsideHedge in Featured, Twitter Stock Sentiment

Just a quick update on our Twitter sentiment indicators for the S&P 500 Index (SPX) and sectors today since we didn’t do an update over the weekend. It appears to us that SPX is trying to decide what to do. Sentiment is showing a negative divergence from price, but it hasn’t met our three week to a month criteria that we use to provide meaningful signals. Over the next week we should have enough information to make a call (either a consolidation warning or confirmation of the uptrend). Support and resistance numbers generated from the Twitter stream stayed the same last week even with the big moves in price. Support remains 1650 and 1600 and resistance is at 1665 and 1700. We did get some tweets in the 1635 area pointing to the lows on Thursday and Friday. We’ll need to see them continue into this week to consider them support if 1650 fails. From a sector perspective the market looks like it wants to go higher. Consumer Staples and

Tags: spx, xlb, xle, xlf, xli, xlk, xlp, xlu, xlv, xly

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No End in Sight

Published on May 18, 2013 by DownsideHedge in Featured, Market Comments, Twitter Sector Sentiment, Twitter Stock Sentiment, Twitter Support and Resistance

Twitter sentiment support and resistance for the stock market

Over the past week all of our core market health indicators improved, however, none of them improved enough to change our core portfolio allocations. Market Positives We continue to see price move higher in the S&P 500 Index (SPX) while perceptions of risk go lower. Our measures of risk are signalling that investors and traders have little long term concern. Our measures of the economy, market quality, trend, and strength all improved late this week, while measures of market breadth are at historical levels. This signals that even reluctant buyers are entering the market. Our investor contentment index shot substantially higher over the past two weeks which is another sign of money flowing into stocks. Our Twitter sentiment indicator for the S&P 500 Index (SPX) is painting moderately high readings on up days and fairly flat reading on down days. This is a positive sign for a market making new highs. Even though there continues to be a very large number of tweets concerned with overbought conditions there are enough

Tags: spx

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Using Volatility as an Investment Hedge

Published on May 13, 2013 by DownsideHedge in Hedging Strategy, Market Risk

The past fifteen years have been a very volatile time for the stock market. Not only has the market had large corrections and bear markets it has also had huge rallies and bull markets. These swings have made and broken many portfolios. An investor can limit the violent swings in their portfolio by implementing a hedging strategy designed to limit downside losses. With the explosion of ETFs over the past few years there are now several investment vehicles that can be used as a hedge against extensive declines in the stock market. One method that is gaining popularity among investors is volatility. The most common measure of volatility is the CBOE S&P 500 Volatility Index (VIX). When an investor buys a VIX future or option they are placing a bet that the variance or deviation in the price of the S&P 500 Index (SPX) will increase at some point in the future. Basically it is a bet that the market will experience large price swings. When the stock market declines

Tags: spx, vix, xvz

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Page 1 of 1512 3 4 5 Next ›Last »

Risk vs. Internals

Finally Some Excitement

Uptrend Resumes

Where to Catch?

Healthy Consolidation…So Far

Market Showing Healthy Signs – Adding Long Exposure

Rotation to Financials and Technology

Twitter Sentiment Looking for a Direction

No End in Sight

Using Volatility as an Investment Hedge

Twitter Support and Resistance
S&P 500 Index

Support: 1600, 1575, and 1535

Resistance: 1650, 1680, and 1700

Current Market Conditions

Twitter Sector Sentiment

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