What to make of the market?

This site’s philosophy is very simple. I feel (I hope I’m humbled by this ..or rather i hope I’m humbly starting this): This site’s philosophy is sublimely simple : Price is the only true north star. I want to simply mimic the price. Price is rising and i am buying. Price is falling and i am selling.

what i mean by that is this ?

Let me put it in a different way. Say you are conservative. Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole.

QQQ or the cubes which track the NASDAQ – 100 has a beta of 1.10 ..roughly it mirror the NASDAQ – 100. AMZN , Amazon has a beta of 1.71.Netflix NFLX 1.53.

there are ETFs dedicated to High Beta or it’s implications – momentum stocks!

Now QLD , which daily doubles the NASDAQ – 100 has a beta of 2.25 !!

Say Jan 4th 2019 when the market started its rally you bought 100 shares of QLD for 68 dollars.  On Feb  6th 2019 it hit a resistance at 200 day SMA and then next day you sell at market open (it confirmed because there was a gap down). You sold at 79.

So you went in with 6800 dollars and now you have 7900 dollars.

Now if you look at market and it is dropping on high volume end of the day prices you know the market is in downswing. Say it drops down to 70 USD, and you get in based on simple end of day price action. Now you have 112.8 shares!!

See you accumulated assets slowly! In QLD or for that matter NFLX or AMZN wealth is accumulated by accumulating shares by being in cash when the market is falling!! and getting in when the simple price volume actions says the trend is reversing from going down to going up.

Buy at the top sell at the bottom.

Profit in assets are only made at the price you buy not at the price you sell. So you go long (buy) at the beginning or there about of an uptrend or go short (sell) at beginning or thereabouts of a downtrend. Since price is the only true North Star. One ‘exits’ at the top or bottom to make true profit and to accumulate assets. In both cases – long or short – you are buying low and selling high. THIS DOES NOT MEAN YOU ARE ACCUMULATING ASSETS AS PRICE IS FALLING. In fact it is exactly opposite to it. Accumulating assets as prices are falling is buying high and selling low ( you sell low because you can’t bear the pain of loss). You always accumulate assets when price is rising.  You exit assets when it’s price is falling.

Happy trading folks!

 

 

What a upswing yesterday!

Wednesday, September 12th 2018, around 8:30 am Hyderabad, India; and around 11:00 pm Wednesday, September 12th 2018 New York Time

futures before opening did not look nice…NDX opened lower about 40 points! but immediately started going up and up 100+ points at close. That is a good upswing!

NDX solid support and bounce above 9 Week EMA. FFTY – top 50 growth stocks in the market good bounce above 9 Day EMA!.

Accumulation distribution line for NYSE – not as good as yesterday, but 1430 stocks up (majority of stocks) in good volume of 1.56 billion (better volume than yesterday)

most spectacular advance was NDX – low of 7401 and closed around 7507!

only red flag was the breath – IBD calls it ‘curiously soft’ ! Decliners led advancers by 15-to-13 in NASDAQ. Well there is one other red flag – % of S&P 500 stocks above their 50 day SMA declined by not that much to 64.55

One another thing – Apple, Amazon, Microsoft, and Google is 26 % of NASDAQ! Now these stocks are institutional darlings and heavy weight!. How are the institutions treating them ? Screen Shot 2018-09-12 at 8.45.50 AM

decision : I’m staying in QLD

and i am long on NQ 1 Contract

Happy trading