Dwight's Picks: December 2015

Saturday, December 12, 2015

Determine Market Trend (11 Dec 15)

Bull Market, Pullback, Correction and Bear Market

(1) Pullback: -5% off 52W High (2) Correction: -10% off 52W High (3) Bear Market: -20% off 52W High

Benchmark	Symbol	% off 52-Wk High	Market Trend
Nasdaq 100	QQQ	-4.29%	Bull Market
Dow Jones 30	DIA	-4.65%	Bull Market
S&P 500	SPY	-4.81%	Bull Market
Russell 2000	IWM	-12.70%	Correction

Traders who strive for consistency—their goal is to make money in all market environments. Knowing whether you are in Bull Market, Bear Market or a Flat Market is equally important and key in assessing the potential for your trade.

Long Term Trend

The “big dog” of moving averages is the 200-day moving average. If the index is trading above that level, the long-term trend is considered up; generally, the 200-day moving average is seen as a proxy for the long-term trend.

Benchmark	Symbol	Price	200-DMA	Market Trend
Nasdaq 100	QQQ	110.79	108.51	Uptrend
Dow Jones 30	DIA	172.73	174.02	Downtrend
S&P 500	SPY	201.88	205.24	Downtrend
Russell 2000	IWM	111.91	119.89	Downtrend

In an up-trending market, I will lengthen holding times and give my holdings more room to run. In a wide trading range or a down-trending market, I use short holding times and grab profits quickly.

Market Trend (11 Dec 15): S-T Market Bottom

The SPY:$VIX ratio chart is best used to identify market bottoms. Each time the Percentage Price Oscillator (PPO 1,10,0) reading moves below -10 the S&P 500 (SPY) has reached a market bottom.

Volatility Index (11 Dec 15): $VIX 96.01

The VIX has an inverse relationship to the price of the S&P 500. Thus, we often see the VIX making new highs as the market is making new lows. When the 2-period RSI of the VIX is above 90 we'll be looking to go long.

Leveraged ETFs (11 Dec 15): EDC $10.43

Buy (240) shares EDC @ $10.43
Target Price (10%): $11.50

Leveraged ETFs (11 Dec 15): YINN $15.71

Buy (160) shares YINN @ $15.71
Target Price (10%): $17.30

Leveraged ETFs (11 Dec 15): RUSL $10.94

Buy (229) shares RUSL @ $10.94
Target Price (10%): $12.05

Leveraged ETFs (11 Dec 15): FAS $27.51

Buy (91) shares FAS @ $27.51
Target Price (10%): $30.30

Sunday, December 6, 2015

Determine Market Trend (4 Dec 15)

Bull Market, Pullback, Correction and Bear Market

(1) Pullback: -5% off 52W High (2) Correction: -10% off 52W High (3) Bear Market: -20% off 52W High

Benchmark	Symbol	% off 52-Wk High	Market Trend
Nasdaq 100	QQQ	-0.53%	Bull Market
S&P 500	SPY	-1.16%	Bull Market
Dow Jones 30	DIA	-1.51%	Bull Market
Russell 2000	IWM	-8.12%	Pullback

Long Term Trend

Benchmark	Symbol	Price	200-DMA	Market Trend
Nasdaq 100	QQQ	115.14	108.37	Uptrend
S&P 500	SPY	209.62	205.30	Uptrend
Dow Jones 30	DIA	178.42	174.10	Uptrend
Russell 2000	IWM	117.78	120.07	Downtrend

In an up-trending market, I will lengthen holding times and give my holdings more room to run. In a wide trading range or a down-trending market, I use short holding times and grab profits quickly.