Rising gas buddy indicates hold cash.
After GB (gas buddy) has been falling for 1 mo, that’s a possible buy for SPY if VIX and GHA agree. That’s for a major run/rebound of SPY.
After a GB peak, TLT may be a buy if CCPI is 2.0 or rising rapidly and VIX/GHA agrees.
Even in 2010 and 2011…the best time to buy TLT is after the gas buddy peak and VIX/GHA for confirmation.
Looks like ROC is still a –
A pullback in April should follow with a rebound expected for May 1 or May 2.
Two criteria are 1) GHA 0.80+ and 2) VIX < VIX 12dma
Wages are falling behind corporate profits. The economy is becoming more and more dependent on ‘wealth’ effect and thereby QE.
Wages are falling as % of overall spending.
Corporate Profits are record % of GDP…
Gas buddy finally rises so there’s a chance to achieve some inflation.
In the past 2 years, TLT:SPY rises when ccpi hits 2.0.
However, TLT is technically a bull market as of mid-January which corresponds to the beginning of taper. Rising inflation makes me hesitant until gas buddy levels off or ccpi is close to 2.0.
Gas buddy shows sign of life (and some inflation) so SPY and ROC may rise slightly but not a big rise.
ROC has now crossed to – meaning April a down month.
So April will be quite a down month. Look for turn/rebound on May 1-2:
1) GHA
2) VIX falls below 12dma
In addition to ROC20, OEX 4 day moving average is also useful to see a turn. For now everything sideways..
Looks like based on ROC at +6% that March will not see a pull back but rather April. So May 1 (open) is the next decision day. Inflation has risen a bit but ccpi won’t make it to 2.0. It will start to fall again April which sets up a nice SPY run in early May. Cash for now.
HA candles are now available on stock charts so trading view is no longer needed…
From Stock charts…definition of HA candles-
Heikin-Ashi Candlesticks are an offshoot from Japanese candlesticks. Heikin-Ashi Candlesticks use the open-close data from the prior period and the open-high-low-close data from the current period to create a combo candlestick. The resulting candlestick filters out some noise in an effort to better capture the trend. In Japanese, Heikin means “average” and “ashi” means “pace” (EUDict.com). Taken together, Heikin-Ashi represents the average-pace of prices. Heikin-Ashi Candlesticks are not used like normal candlesticks. ….Instead, these candlesticks can be used to identify trending periods, potential reversal points and classic technical analysis patterns.
So in summary only 2 indicators on/just after Fed meetings this year until taper ends in October. I anticipate a large correction of 10-15% in November just after taper ends. The Fed knows QE has diminishing returns and hence they need to taper to ‘reload’ for the next round.
1) VIX 12dma
2) Daily HA $0.80+ is green (GHA) at close or at open the next day. If up on Fed day, buy at open following day OR buy the 1st GHA at close if down for days following Fed meeting. Decision day is the following day from a Fed meeting.
The next period is Mar 20-28 for trading…cash for now. CCPI fell again to a recent low. GCPI will also be weak this month as gas inflation is weak again for Feb compared to last year.
TLT may have a run BUT with ccpi at 1.6 (lowest since 2011) and gcpi at 1.6 AND gas inflation low for february, it’s not a good risk at this time. Rather the uptick in TLT indicates a fall in SPY and another nice rebound coming. With inflation this low, a nice SPY rebound is coming again.
See gas inflation here which indicates feb cpi to be weak as well. Feb gas inflation last year was much stronger. Economy is weak and we have continued taper until October which will make for a volatile up/down SPY.
Run mostly over but may go to 186 next week.
Next date to watch…Mar 7 nfp and possibly Mar 18 cpi. If they are bad and TLT has a $1GHA event for either, I say buy for a short term play until the first red ha candle or 1st week of April nfp.
Inflation will show higher Mar 18 gcpi 1.8, SPY should have a big fall again through late Mar-early April. PMI and payroll could be bad 1st week of April as in most recent years. However, the setup would be for a strong rebound in May.
The next VIX X-over event (12dma) needs to be watched as well. This seems to happen the Tues-Fri before the Fed Meeting Mar 12-18.
I would say sell this Friday as 80% of SPY run to 184 will be done.
However, VIX 12dma says stay in. When the X to upside occurs, the next crisis begins. ROC- is now a general indicator not a precise one. VIX 12dma and $1GHA at close will be used to precisely time and avoid falls such as Jan 24-Feb 4.
VIX 12dma will be the primary tool….
Credit Flow Investor 