Trucharts.com end of weekly blog update - 10/17/2014

Trucharts.com end of week Blog update 10/17/2014

What a week of market gyrations.  It had our head spinning.  We were expecting volatility – but this was nothing we have experienced in the past two years – since the markets (like we stated before) have been going up in a straight line.  The correlation between the Fed balance sheet and the markets has been moving in tandem.  And then the Fed speaks anytime the markets drop – because obviously all the Wall Street guys are concerned about their portfolios dropping and how this will impact the average investor.  Fed governor Bullard spoke and then we had some other Fed governors speak – as soon as that happened the markets jumped and bounced.  It is like a scripted movie – predictable. Bullard (non-voting member fo FOMC) stated that the Fed should keep the bond buying active – wow!! As if the Fed balance sheet is not big enough yet.  It is $4T – yes 4 TRILLION and that has created a bubble in stocks, real estate and every asset.  Bonds had moved higher into this volatility and the VIX spiked to a high of 31+ and then settled the week at 21.99. We expect the VIX to pull back and bring some sense to back for some time into the markets.  There are some interesting charts we have shown below and with comments and trendlines indicated.  We are short IBB still and GM.  We expect NFLX to pull back and since we have earnings coming up from AAPL and many big names next week – we would like to stay on the sidelines and keep our powder dry.  We went long USO even though we think the correction in the OIL/energy sector is not over.  Gold did bounce but the long term chart looks weak.  Gold miners are getting slaughtered.

We have added one of our unique sentiment indicator charts at link:  http://www.trucharts.com/MarketSentiment_ISEE.aspx

This is of VIX vs SPY500 and you can see clearly how the VIX spiked significantly last week.

We have added the charts for LUV (Southwest airlines) – position closed last week.  DAL short closed last week – even though we may retake the short positions in these later.  Our SNDK profit was 150% – Oct 92.5 puts – we bought at $4 and it closed and sold for $10 on Friday expiration.

XLE chart shows breakdown in the energy sector.

QQQ bounced exactly off the 50 week average – see chart below.

The volatility did allow day traders to take advantage of the daily moves in the markets/stocks.  One of our fund manager friend who manages a S&P futures fund made the highest return and the return for the week was a whopping 17% and the YTD  return has been 64% with a hit ratio of 96.5%.

If you are interested in discussing this with our hedge fund manager – please contact us at support@trucharts.com and or at bbhatia@trucharts.com.  Please keep in mind that the minimum investment required is $50K or $100K.  

Here is the weekly return chart for past 32 weeks.  As you can see the return is low when volatility is low – but none the less positive.

        

 

 

 

 

 

Best of luck trading next week;

Trucharts team