Tag Archives: SP 500

The Market Has Gone Up in a Straight Line

The market took a drastic turn on the upside since the beginning of the year.  It has defied a lot of conventional methods of technical analysis; it basically just went up like a straight line.  This is a very unusual market condition that only happens maybe once a life time. This is called vertical market condition

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Shutdown Blip

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The US government was shutdown over the weekend.  It is a big deal as it affects many people’s lives and the economy.  But in this vertical market, this shutdown will be just a blip that the impact to the market is almost negligible.   The bull market will brushoff the event like it has been doing since 2017.

It was the 13th day in the first daily cycle and the 3rd week in the current weekly cycle on Friday, January 19, 2018 before the shutdown.  

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S&P 500 Cash Index Cycle Location

The S&P 500 cash index ran 114 points in the last 9 trading days!  What a great start of 2018!  It officially kicked off the new weekly cycle on the first trading day in 2018.  It just finished the 2nd week in the weekly cycle.  With the incredible momentum, we expect the current rally to continue until at least April 2018. 

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Santa Rally 2017

The pending passage of the Tax Reform Bill reducing the corporate tax to 21% and taking effect January 1st, 2018 rather than being delayed until 2019, will be one of the biggest positive catalysts for US equities in decades.  The seasonal Santa Rally just got a solid footing for the market to finish a fabulous 2017!

The S&P 500 cash index has finished the 16th bar in the current weekly cycle.  It is expected for the index to make a new high in the 17th week, the week right before Christmas.  The sentiment is extremely bullish around this time of the year.  The S&P 500 in on pace to target 2700.

In a different model, we project the DOW to reach 25,648 by the end of 2017.  We also have a projection for the DOW to reach 28,045 by the end of 2018.  However, we are not clear about the two-year cycle low in 2018.  It is due for a two-year cycle low in Q1 2018, but the market can completely skip the two-year cycle as it has done in the past.  So we want to see how the market opens in 2018 to see the likelihood of a sizable correction to produce a two-year cycle low in Q1 2018.  We are kind of in a holding pattern in terms of deploying additional capital at this time.

While in this holding pattern, we do have a few short term trades in options.  We would open near money calls for $VIAB, $INTC, $XLK, $AAPL and $MSFT.  All these options expire on December 29th, 2017.  In other words, we wish to use these options to capture the final Santa rally in 2017.

Good luck and cheers for a fabulous 2017!

 

 

Year End Strategy

We at Pricentime.com run daily, weekly and monthly scanners to search for stocks that are ready to take off. The focus of the search is the study of price and volume information in the given stocks to predict pending movements. We also scan unusual options activities to find winners. 

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