Bullish Cross Live


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THE LIVE BLOG 9:30 AM - 4:00 PM

5:00 AM -- most likely today will be a pretty light session of consolidation for the broader market. We're going to keep our updates very brief on today's session which will cover a few things we are watching. First, the $NYMO is getting close to overbought territory. A few more big up days and we'll be hitting extremes. The $NYMO being either too overbought or oversold is one of the very best contrarian indicators in the market. So if we get an extremely overbought $NYMO, we may very well play the reversal. See below:

We also want to be keeping an eye on the near-term momentum in the market. We're starting to see the SPY get pretty overbought on the 60M time-frame. The RSI has pushed well into the 80's. However, we're still not at peak extremes which would normally lead to at least a near-term pull-back. What I would like to see is the 60M hit peak extremes just as the $NYMO closes near the 100 level. That would present with a very good near-term trade.

1:30 PM -- well as I suspected, today has so far been a very light session with a very tight trading range. We're going to just simply watch the rest of the session to see if anything major changes. But for now, the SPY continues to be overbought (but not extreme) and we're simply just going to wait patiently for the next big set-up. We will discuss that in a little more detail in the BC Weekly Summary.

17 responses to “Bullish Cross Live

  1. Fyi, IBD updata today:
    “Market in confirmed uptrend
    Follow-through confirms market rally, putting indexes in confirmed uptrend.”

    • Micah Wakefield (Aspect13)

      Are they a little late?

      • I think they look for strong volume, not just price.
        It seems to work. I got TSLA this morning at 126.41 and sold for a quick 1% gain. Now its is up 1.93%

        • Micah Wakefield (Aspect13)

          Right, I was just thinking in terms of the fact that we seem to have been in an uptrend since the November 15th of last year, with barely a 5% pullback to interrupt it…

  2. Andy, could you provide a followup on your answer to my question below:

    dtfein | July 11, 2013 at 2:00 pm | Reply
    Andy, what do you think is the fair valuation for Apple based on the transition it is currently going through?

    Andy M. Zaky | July 11, 2013 at 2:42 pm | Reply
    That question is just extremely complicated man. Like there is no fair value right now because the market just doesn’t really care about the fundamentals. Now if they did, Apple should be trading somewhere in the low $600′s right now. That would be a below average market valuation. The S&P 500 average P/E ratio is >15. At $550 – $600 a share, Apple would be well below that. And you consider cash, it’s even a lower valuation. Really fair market value is probably somewhere near $800 – $1000 a share.

    Yet, this notwithstanding, Apple continues to trade at $430 a share. That’s why this just isn’t a good way to be even confronting the situation right now. Maybe in the future when the market gives a crap about valuation. But for the last 9-months, it simply just hasn’t.

    dtfein | July 11, 2013 at 3:45 pm | Reply
    Basically, when the market cared about fundamentals last year, you seemed to think a 15 average PE seemed about right as to what we should expect. If the market starts caring again as things improve in the fall and 2014, should it settle back to an average somewhere below 15 given the slowdown that has occurred? Even at the height of the parabolic rally, Apple was only at an 18 or so. Meaning what might it take for the market to grow comfortable with an running average of around 15 for Apple?

    • Micah Wakefield (Aspect13)

      I think the market can’t get a good handle on PE because it can’t get a good handle on earnings/future earnings. They see it as too unpredictable, volatile and impacted by too many things. Perhaps that is why its range has been 9 to 18 recently. It’s a major guessing game of where earnings is headed, not where earnings is or could/should be.

      • I tend to agree. I was just curious if Andy had a strong opinion about the topic.

      • Or, the market sees Apple’s future earnings as extremely predictable, because the collective opinion is that it’s a foregone conclusion that Apple will go the route of Sony. The only way to disprove this argument is for Apple to not become Sony in the next 20 years.

  3. Got out of the remainder (30 %) of my 430’s yesterday at $13….. Nice trade Andy.

  4. Today’s gambling: Bought some weekly puts this AM after the breakdown at 427. AAPL keeps consolidating and legging lower intraday. Out by end of day no matter what.

    Small positions, these.

  5. Regarding Apple’s fundamentals, what they needed to do was to pursue something radical like buy a studio from Sony, or Netflix (which has been reasonably priced on occasion) or even Hulu. They need to create the perception that they are seeking new sources of revenue and new ways to “lever the brand”. MSFT has bought a bunch of junk over the years and much of it has not worked out, but enough of it has to give them a varied stream of business and all of it looks good now as the PC is perceived as in endless decline. Apple is being way too conservative.

  6. AMZN is extremely overbought at 305 now. Both the 60min and daily RSI are at historically unseen overbought levels. It’s way above its moving averages. Closed above its BB for several days in a row.

    It did have excellent news flow this week. Regardless of its P/E, I think it will go higher intermediate term, but short term it’s probably due for a pullback soon. Anyone interested in picking a time or price when it starts?

    I am thinking very soon — between 305 and 310, since 310 is the measured move target.

  7. Nice soft landing at 425

  8. Got back in TSLA… will try to hold for 150 or trend line break

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