Determine Market Trend (22 Apr 16)

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
Dow 30	DIA	-0.84%	Bull Market
S&P 500	SPY	-0.92%	Bull Market
Nasdaq 100	QQQ	-5.28%	Pullback
Russell 2000	IWM	-10.38%	Correction

Although your ultimate goal is to use the stock market to build wealth, you must also avoid losing money.  Knowing how to read the market as a whole will help you to prosper during bull markets and protect assets during bear markets.

Long-Term Trend

The “big dog” of moving averages is the 100-day moving average.  If the index is trading above that level, the long-term trend is considered up; generally, the 100-day moving average is seen as a proxy for the long-term trend.

Benchmark	Symbol	Price	100-DMA	Market Trend
Dow 30	DIA	179.90	169.73	Uptrend
S&P 500	SPY	208.97	198.55	Uptrend
Nasdaq 100	QQQ	108.98	106.65	Uptrend
Russell 2000	IWM	114.11	107.00	Uptrend

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

  Short-Term Trend

Short-term trends can be captured using short-term moving averages.  The 20-day moving average provides you a simple yet effective way for knowing what side of the market you should be trading. 

Benchmark	Symbol	Price	20-DMA	Market Trend
Dow 30	DIA	179.90	177.65	Uptrend
S&P 500	SPY	208.97	206.65	Uptrend
Nasdaq 100	QQQ	108.98	109.75	Downtrend
Russell 2000	IWM	114.11	110.99	Uptrend

If the short-term trend is up, use bullish leveraged ETFs.  If the short-term trend is down, use inverse leveraged ETFs.

Ratio Chart (SPY:$VIX): ST Uptrend

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 short-term market bottom.

Volatility Index (22 Apr 16): $VIX 54.68

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 (22 Apr 16): UPRO $66.32

Buy (38) shares UPRO @ $66.32
Target Price (30%): $73.00

Leveraged ETFs (22 Apr 16): NUGT $81.46

Buy (31) shares NUGT @ $81.46
Target Price (10%): $89.60

Long Call (22 Apr 16): XOP $35.37

Buy (1) Jan 18 40 C @ $4.70
Target Price (30%): $6.20

Long Call (22 Apr 16): GDXJ $33.64

Buy (1) Jan 18 40 C @ $6.20
Target Price (30%): $8.10

Determine Market Trend (15 Apr 16)

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
Dow 30	DIA	-0.46%	Bull Market
S&P 500	SPY	-0.93%	Bull Market
Nasdaq 100	QQQ	-3.84%	Bull Market
Russell 2000	IWM	-11.63%	Correction

Although your ultimate goal is to use the stock market to build wealth, you must also avoid losing money.  Knowing how to read the market as a whole will help you to prosper during bull markets and protect assets during bear markets.

Long-Term Trend

The “big dog” of moving averages is the 100-day moving average.  If the index is trading above that level, the long-term trend is considered up; generally, the 100-day moving average is seen as a proxy for the long-term trend.

Benchmark	Symbol	Price	100-DMA	Market Trend
Dow 30	DIA	178.68	169.55	Uptrend
S&P 500	SPY	207.78	198.43	Uptrend
Nasdaq 100	QQQ	110.64	106.80	Uptrend
Russell 2000	IWM	112.45	107.19	Uptrend

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

  Short-Term Trend

Short-term trends can be captured using short-term moving averages.  The 20-day moving average provides you a simple yet effective way for knowing what side of the market you should be trading. 

Benchmark	Symbol	Price	20-DMA	Market Trend
Dow 30	DIA	178.68	176.49	Uptrend
S&P 500	SPY	207.78	205.29	Uptrend
Nasdaq 100	QQQ	110.64	109.04	Uptrend
Russell 2000	IWM	112.45	109.69	Uptrend

If the short-term trend is up, use bullish leveraged ETFs.  If the short-term trend is down, use inverse leveraged ETFs.

Ratio Chart (SPY:$VIX): ST Uptrend

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 short-term market bottom.

Volatility Index (15 Apr 16): $VIX 15.79

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 (15 Apr 16): UPRO $65.12

Buy (38) shares UPRO @ $65.12
Target Price (10%): $71.65

Leveraged ETFs (15 Apr 16): LABU $35.21

Buy (71) shares LABU @ $35.21
Target Price (10%): $38.75

Leveraged ETFs (15 Apr 16): FAS $25.96

Buy (96) shares FAS @ $25.96
Target Price (10%): $28.55

Leveraged ETFs (15 Apr 16): TNA $60.66

Buy (42) shares TNA @ $60.66
Target Price (10%): $66.70

Determine Market Trend (8 Apr 16)

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
Dow 30	DIA	-2.14%	Bull Market
S&P 500	SPY	-2.50%	Bull Market
Nasdaq 100	QQQ	-5.26%	Pullback
Russell 2000	IWM	-14.26%	Correction

Although your ultimate goal is to use the stock market to build wealth, you must also avoid losing money.  Knowing how to read the market as a whole will help you to prosper during bull markets and protect assets during bear markets.

Long-Term Trend

The “big dog” of moving averages is the 100-day moving average.  If the index is trading above that level, the long-term trend is considered up; generally, the 100-day moving average is seen as a proxy for the long-term trend.

Benchmark	Symbol	Price	100-DMA	Market Trend
Dow 30	DIA	175.66	169.33	Uptrend
S&P 500	SPY	204.50	198.29	Uptrend
Nasdaq 100	QQQ	109.00	106.86	Uptrend
Russell 2000	IWM	109.11	107.36	Uptrend

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

  Short-Term Trend

Short-term trends can be captured using short-term moving averages.  The 20-day moving average provides you a simple yet effective way for knowing what side of the market you should be trading. 

Benchmark	Symbol	Price	20-DMA	Market Trend
Dow 30	DIA	175.66	175.22	Uptrend
S&P 500	SPY	204.50	204.11	Uptrend
Nasdaq 100	QQQ	109.00	108.18	Uptrend
Russell 2000	IWM	109.11	108.72	Uptrend

If the short-term trend is up, use bullish leveraged ETFs.  If the short-term trend is down, use inverse leveraged ETFs.