New S&P 500 Highs Reduce Long-term Bear Market Risk to Zero

Yes, this is a pretty bold headline, but it’s not just a sensationalistic attention grabber, it’s simply the result of my research.

I published a similar article before in February 2016, when the S&P 500 traded below 1,900. The title then was: 2016 Bear Market Risk is Zero Based on this Rare but Consistent Pattern

In fact, a pattern similar to February 2016 played out in January of this year (discussed here: Is the ‘Bear Market’ Already Over?)

But the reason for this bullish long-term article is the new S&P 500 all-time high, not a breadth thrust from the low (as in February 2016 and January 2019). Here is why this is bullish:

Bullish ‘Round Trip’

Last week’s new S&P closing high completed a tumultuous round trip: A 20% drop sandwiched by two all-time highs in 146 days (see chart below).

Since 1928, something similar (at least a 14% drop sandwiched by all-time highs) has only happened 12 other times, 6 of those occurred since 1980 and are listed in the table below (the table includes the 2018 round trip, although it was only 10.16%).

‘Round Trip’ Implications

The stat is interesting, but does it mean anything? Yes, it does.

As the right column (table above) shows, 1 year after the S&P eclipsed its prior all-time high, it was higher every time, on average 12.66%.

The chart below shows the average performance for the year following the day when the S&P 500 fully recovered its prior losses (based on the data shown in table).

Based on the average trajectory, the first 80 trading days (about 4 month) after the all-time high tended to be choppy, but price action is outright bullish thereafter.

Odds of a deep but temporary S&P 500 pullback in the 3,000 range are high.

Price studies like this are just one of many indicators that go into the Profit Radar Report’s market forecasts. If you have only a few minutes every week to become the best-informed investor you know, you’ll enjoy the Profit Radar Report. Take a test drive now.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s evaluation of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, 24.52% in 2015, 52.26% in 2016, and 23.39% in 2017.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF e-Newsletter to get actionable ETF trade ideas delivered for free.

Advertisements

S&P 500 Update – Outrageous Projection

The S&P 500 is following closely my projection (in yellow) published in the Profit Radar Report’s 2019 S&P 500 Forecast.

Barron’s rates iSPYETF as “trader with a good track record” and Investor’s Business Daily says: “When Simon says, the market listens.” Find out why Barron’s and IBD endorse Simon Maierhofer’s Profit Radar Report.

Unfortunately we never got the pullback expected in Q1 2019, but the new all-time highs are right ‘on schedule.’

This doesn’t mean there wasn’t any uncertainty on the way up. The Profit Radar Report always looks at the market from different angles, and at the beginning of April there were enough conflicting indicators and signals to cause analysis paralysis.

Instead of further exploring the various cross currents, and burdening subscribers with information overload, I decided to take the approach described in the April 7 Profit Radar Report:

Perhaps a simplified approach will help navigate this environment. Red trend line resistance has held thus far, and has not become main stream enough to be negated. Green trend line is near-term support. An immediate break above trend line resistance may lead to closure of the open chart gap at 2,921.36.”

Below is an updated version of the chart published on April 7. Instead of breaking above the red trend line to close the gap at 2,921, the S&P 500 has been inching higher like pulled on a zip line.

Regardless of how, the gap has been closed, and the S&P 500 has now one less reason to continue higher without interruption (chart gaps act as magnets).

I wouldn’t be surprised to the see the S&P 500 grind a little higher, but then we should see whether the remainder of my S&P 500 projection – which is quite outrageous – will also prove correct.

Based on investor sentiment, a nasty decline is possible and becoming more likely, but based on liquidity any drop is probably only temporary. According to Elliott Wave Theory, an upcoming drop (once smaller waves 4 and 5 are complete) could be a steep wave C or wave 2, but as long as the S&P stays above 2,900, it can grind higher.

Continued updates are available via the Profit Radar Report.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s evaluation of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, 24.52% in 2015, 52.26% in 2016, and 23.39% in 2017.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF e-Newsletter to get actionable ETF trade ideas delivered for free.

Free Access to the Profit Radar Report

For the first time ever, anyone can get FREE ACCESS to the Profit Radar Report. The last 6 complete Profit Radar Report updates covering the S&P 500, Dow Jones, Nasdaq, XLU, US dollar, EUR/USD, gold, silver, and 30-year Treasuries, TLT are available here. Enjoy!

Barron’s rates iSPYETF as “trader with a good track record” and Investor’s Business Daily says: “When Simon says, the market listens.” Find out why Barron’s and IBD endorse Simon Maierhofer’s Profit Radar Report.

April 4, 2018 (6:00pm PST)

Yesterday’s PRR stated that: “We will set our stop-loss at breakeven. If SPY gaps below 258.87 in the morning, we will keep our stop-loss at 256.”

Since SPY gapped lower and opened at 256.75, we set our stop-loss at 256. After another 200-day SMA seesaw, SPY closed at 263.56. We will now raise our stop-loss back to breakeven (258.87).

Monday’s PRR mentioned that the NY Composite a/d line is still above its February and March lows. The chart below provides more details. From March 23 – April 2, the S&P 500 drifted lower, while the NYC a/d line inched higher. This bullish divergence suggests that selling pressure is abating.

This fact, in addition to the S&P 500, DJIA and Nasdaq-100 hitting our down side targets and/or support (March 28 PRR) contributed to the SPY buy signal.

However, bullish outlooks are rare. In fact, some Elliott Wave Theory analysts are vehemently bearish, which is reminiscent of early March, when the March 7 PRR published the chart below and stated:

This is one of those times where it’s dangerous to rely solely on Elliott Wave Theory (EWT). Some EWT analysts currently advocate a 1 – 2 constellation to the up side (green labels), others a 1 – 2 to the down side (red labels). “1 – 2” meaning waves 1 and 2 are complete (or nearly so), with a powerful wave 3 (up or down) to follow, essentially EWT analysts expect either a melt-up or melt-down. We know at least one group will be wrong.

The path that would make most sense (in terms of fulfilling more indicators/patterns than the other paths) is continued range racing, an eventual re-test of the February panic low (blue box), and subsequent rally to 3,000 +/- (blue labels, or scenario #2 shown in the February 28 PRR).”

Our indicators supported the blue path weeks ago, and continue to do so (with or without another drop to 2,530 – 2,460).

However, we wanted to let subscribers know that we always monitor various developments, and if our indictors change (i.e. an increase in selling pressure or emergence of bearish divergences) we will have to adjust accordingly.

Currently we want to have some ‘skin in the game’ if stocks continue higher, but will continue to manage risk.

The DJIA may have finished the 5-waves lower shown in the March 28 PRR. The chart below shows some short-term resistance levels: Red line: 24,300. Trend channel: 24,700.

XLU continues to gnaw on resistance around 51. The pattern of this rally is not exactly bullish, but nevertheless continues to make higher highs and higher lows. RSI-35 is positive, on balance volume not (yet?). The near overbought RSI-2 condition has been digested. We will still close XLU if it moves above 51. XLU could be tracing out a messy triangle with support around 50 or 49 and resistance at 50.80 – 51. Our entry was on February 12 at 48.40.

Summary: Some bullish divergences are building, which is positive. The S&P closed today at minor resistance around 2,644. A move above 2,644, followed by 2,695 – 2,700 would increase the odds that a bottom is in.

The US Dollar Index has not moved for the past 4 days. The March 27 low at 88.942 remains key. As long as trade remains above, the US dollar can continue to move higher. The EUR/USD remains still above 1.2240. A move below 1.2240 may well usher in a protracted decline.

Gold bounced from the 61.8% Fibonacci support level, but that bounce has been feeble. On balance volume remains weak.

Silver is trading uninspired between support and resistance.

April 3, 2018 (10:00pm PST)

Our SPY buy order was triggered today at the open (258.87), which was above 258.10 but below 259. SPY closed 260.77, about 0.7% above our entry. The question is whether we want to limit risk and set the stop-loss at breakeven, or give SPY a longer leash.

The March 24 PRR stated: “The 200-day SMA is too popular for its own good, that’s why we rarely talk about it (aside from February 5, because it coincided with important Fibonacci support at 2,536). On February 9, the S&P 500 briefly tested the 200-day SMA, and bounced 269 points. Now the S&P is back at the 200-day SMA. It would almost be too simple if the S&P again bounces 200+ points after hitting the 200-day SMA (as it did in early February). With or without small bounce, a 200-day SMA seesaw seems more likely.”

The S&P 500 (and SPY) closed below the 200-day SMA yesterday and back above today. This seesaw stopped out a large number of 200-day SMA focused investors. We wanted to see a minimum of one seesaw, but more are possible.

Today’s rally gives us the luxury to ‘play with house money.’ Although risk of another seesaw across the 200-day SMA (which is only 0.10 points below our breakeven point) exists, our first consideration is usually safety. We will set the stop-loss for SPY at breakeven. If SPY gaps below 258.87 (S&P 500 futures are down 7 points in after hours trading), we will set the stop-loss at 256.

Investors more afraid of missing out on potential up side than being concerned with down side risk, may keep SPY without stop-loss.

April 2, 2018 (7:30pm PST)

Tonight’s PRR includes an update to the open SPY recommendation.

For the past 7 weeks we’ve frequently referred to our preferred, or ideal path for the S&P 500 going forward. The February 11 PRR suggested a path similar to 2011, and the February 19 PRR reiterated that: “We would like to see a retest of the panic low (W-shaped recovery) like in October 2011 or September 2015.”

The W-shaped recovery (wave 4 correction according to Elliott Wave Theory) was identical to scenario #2 outlined in the February 28 PRR or the blue path featured in the March 7 PRR.

On March 19, the wave 4 scenario (similar to 2011, or scenario #2 or blue path), which required a test of the initial February panic low at 2,533 became our primary focus (March 19, PRR: “The blue wave 4 projection (March 7 PRR) and scenario #2 (February 28 PRR) is now the preferred path.).”

The chart below compares the 2011 correction (and subsequent rally) with the 2018 correction. Today the S&P dropped below 2,590 – 2,575 (March 28 PRR: “We would still like to see a drop below 2,590 – 2,575.”) and came within 21 points of the February panic low.

The S&P dropped below the 200-day SMA (for the first time since June 27, 2016), but closed 0.88 points above the February 9 closing low. Although RSI-35 is stronger than price, it would take a new S&P closing low to call this a bullish divergence. However, the RSI margin is so slim that an immediate S&P drop lower could erase any bullish divergence.

Below is an updated look at short-term sentiment extremes. All VIX-and option-based sentiment gauges had an uptick in bearishness, but not extreme. The green bars highlight the last two W-shaped corrections. Panic readings only occurred on the initial low (left W wing). The same is true this time.

80% of NYSE stocks closed the day lower, but the NY Composite a/d line is still above its February and March lows.

Our two-prong SPY buy recommendation required: 1) a drop below 256.25 and 2) a subsequent rally above 258.10. The chart below shows the 256.25 and 258.10 level. SPY did not meet both qualifications. The SPY buy order was not triggered. See summary section below for update SPY buy levels.

Unlike the S&P 500, SPY closed below its February low and displays a bullish RSI-35 divergence.

The same is true for the DJIA (new closing low, bullish divergence).

As anticipated, double support around QQQ 154.50 acted as magnet. QQQ fell as low as 153.88, but closed at 155.51. Even though QQQ remained above its February low, RSI-35 and on balance volume are at or below February level. Not bullish.

Summary: The S&P 500 has met the minimum criteria to consider this correction complete. There is, however, a difference between minimum and ideal. The ideal target is 2,530 – 2,460 (see chart below published in the March 24 PRR). S&P 500 futures are up 10 points in after hour trading. At current price, the S&P 500 would open above its 200-day SMA. SPY would gap higher an open above 258.10. It would take at least a 130-point rally to get an initial confirmation that the bottom is in. Since there is a chance the S&P won’t drop into our ideal down side target, investors may need to ‘pick their poison.’

1) Be early and risk further losses

2) Be late and risk missing out on gains.

In short, the minimum target has been met, but we would prefer to see the S&P drop into and reverse in the ideal target zone (2,530 – 2,460).

We will buy SPY at the open or during the day (as long as it is above 258.10 but below 259). Our initial allocation is a conservative 5%. Our stop-loss will be at 256.

April 1, 2018 (5:30pm PST)

For the first time since February 2016, the S&P 500 suffered two consecutive montly red candles. Since the beginning of the 2009 bull market, the S&P recorded more than 2 consecutive red candles on 6 occasions (3 x 2 month, 1 x 3 month, 1 x 5 month, current – purple boxes). After the 3 x 2 red candles (Aug/Sep 2015, Apr/May 2012, May/Jun 2010) the S&P briefly broke below the prior low twice (Jun 2012, Jul 2010) and came within 25 points of the prior low once (Oct 2015). In February 2016 (the 1 x 3 month period), the third red candle exceeded the prior low by only 2 points.

The S&P 500 doesn’t have to rhyme with prior consecutive monthly declines, but if it does, it would be in harmony with our ideal path of one more new low followed by rising prices.

As mentioned on Wednesday, “sentiment is bearish enough to spark a bounce.” The bounce happened on Thursday, and may continue on Monday (first trading day of April has a solid bullish bias, S&P 500 up 17 of last 23 years, average gain: 0.49%).

Minor short-term resistance remains around 2,640-ish and 2,690-ish.

Below is a renewed look at our set of short-term sentiment gauges. The extremes seen around the February panic low have been digested. During double-bottoms (W-shaped corrections), investors are almost always more optimistic during the second ‘W’ low. That’s why a new closing low (if it occurs) will probably not cause the same kind of panic seen in early February, and set up a bullish divergence.

Our New York Composite advance/decline liquidity indicator shows a similar pattern. The NYC a/d line has been trending higher (green line) and down side pressure seen in late March was less intense than in early February (in early February nearly 90% of stocks declined, in late March ‘only’ 80% of stocks declined – vertical red bars & green line).

Short-term, the DJIA closed above the trend channel shown on Wednesday. As the purple lines show, DJIA could carve out a triangle (purple lines, S&P shows similar formation). This kind of micro-analysis during larger waves 4 is less reliable than at other times, but it’s about the only thing somewhat worth mentioning right now.

XLU closed (barely) above red trend line resistance. RSI-35 confirmed this move, on balance volume did not. RSI-2 is near overbought. Next resistance is just above 51. The positives we saw near the February low are starting to fade a bit, and XLU will have to overcome 51 to unlock further upside. If XLU rallies to 51 on Monday/Tuesday, RSI-2 will likely be fully overbought. We will lock in gains and sell XLU if it spikes above 51.

Summary: Short-term sentiment and money flow (liquidity) suggest that fear and selling pressure are improving, setting the stage for bullish divergences. For a true bullish divergence, we would have to see a new S&P 500 closing low, which is what we’re waiting for to confirm our ideal path for a more significant bottom.

Although we are looking to buy, our indicators and cycles do not project massive up side, even once a low is in place.

The EUR/USD, US Dollar Index, gold and silver did not move much since Wednesday’s PRR.

March 28, 2018 (6:10pm PST)

The market will be closed on Friday in observance of Good Friday. The next update will be published as usual on Sunday.

The week started with a massive rally (Monday) and was followed by an even bigger drop (Tuesday). Normally pops and drops like Monday/Tuesday would validate a special PRR, but considering the larger context (March 19 PRR: “Waves 4 cause a lot of whipsaw and require patience. There may well be times where it will feel like we missed an opportunity … just before stocks reverse and offer a second [or even third] chance.”) it’s sometimes best not to over-analyze certain moves.

The S&P 500 is stomping around atop the blue support cluster at 2,590 – 2,570. We would still like to see a drop below 2,590 – 2,575 (ideally to around 2,530 or 2,460), but short-term sentiment is bearish enough to spark a bounce.

Pinpointing resistance levels in a wave 4 environment tends to be a fools errand, but 2,645-ish and 2,690-ish may be worth watching. A move above 2,645-ish could lead to 2,690-ish, but such a bounce would not eliminate the potential for a drop below 2,590.

The hourly DJIA chart below outlines a short-term trend channel and potential short-term Elliott Wave Theory count. If that’s correct, DJIA should drop below 23,360, find support (ideally at 23,000 – 22,800) and rally.

Double Nasdaq-100 QQQ support around 154.50 could act as magnet and reversal target. At this point, there is no bullish divergence as RSI-35 is toying with new lows (even though QQQ remains above its February low) and on balance volume is already at new lows.

Summary: This is a difficult environment to trade, which is why we trade only if the S&P follows our ideal path (drop below 2,590 at minimum, followed by a rally). The current constellation of various indicators suggests that carving out a low may be a process that could take a few more days, even weeks. For now we will keep our SPY buy recommendation open.

We will take another close look at investor sentiment and money flow in Sunday’s PRR.

As anticipated, the US Dollar Index tested trend channel support at 88.90 (blue oval). From there it rallied strongly. Yesterday’s low (blue oval) could be important and can be used as a stop-loss level for long positions (like UUP). We may soon be adding to our existing UUP position.

Short-term, the EUR/USD allows for a triangle (purple lines), with a potential bullish breakout. This doesn’t have to happen, but it could. If it does, it would likely lead to a test of the long-term trend channel at 1.2620 (black line) and a great opportunity to short the euro (long dollar). A break below 1.2240 would very likely mean that a EUR/USD top (and dollar bottom) is in and signal a longer-term trend reversal.

Long-term, the EUR/USD shows a bearish RSI divergence, is close to long-term trend channel resistance, with cycles soon turning lower, and sentiment supporting falling euro prices.

Gold validated our suspicion and fell hard, retracing almost exactly 61.8% of the March 20 – 27 rally. If gold started a rally with a target north of 1,382 (wave 3 up next?), it should stay above Fibonacci support at 1,328 or 1,318. For aggressive traders, this is a low-risk opportunity to go long with a stop-loss just below support.

Of course, a strong gold rally is unlikely if the US Dollar Index is also about to rally.

Silver is once again back at support around 16.2.

This is a follow up to the 30-year Treasuries analysis published on March 14 PRR.

TLT closed above the bold (previously red, now) green trend line. According to Elliott Wave Theory, TLT can still relapse to a new low. However, a move above 122.42 as good as eliminates this bearish option. Cycles are pointing higher. In short, the trend is higher as long as TLT stays above ascending trend line support (120.40) and once TLT clears 122.42.

Below is an updated look at the 30-year Treasury Yield trend channel shown on March 14. Since then there’ve been two more trend channel touch points. A sustain yield break below 3% (based on trend channel) and 2.98% (based on Elliott Wave Theory) will point to lower yields/higher prices.

Continued updates and analysis is available via the Profit Radar Report.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s profile of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, and 24.52% in 2015.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

If you enjoy quality, hand-crafted research, >> Sign up for the FREE iSPYETF Newsletter

Comprehensive S&P 500 Analysis Reveals Longevity of this Rally

The S&P 500 has soared almost 10% since Election Day. This move has been dubbed the Trump rally or Trump bump.

The media is quick to slap a label on an event (especially after the fact), but lest we forget that the media, analysts and pundits a) did not see a DJ Trump win and b) expected a market crash in the unlikely event of a DJ Trump win.

Key stock market indicators strongly suggested prior to the election that stocks would rally regardless of the election outcome (the four most powerful stock market indicators are discussed in detail here).

Here is what indicators said before the election, and what they are still telling us today:

Money Flow

The stock market is a supply and demand-based market place, that’s why money flow is one of the most important indicators. Falling demand will eventually be followed by falling prices and vice versa.

The September 25 Profit Radar Report published the chart below. The dark and light blue graphs make up our favorite money flow indicator (two versions of the same indicator). This indicator has correctly foreshadowed the 1987, 2000 and 2007 bear markets and projected higher prices since 2009 (except for a brief ‘caution’ signal in 2015). The indicator and its track record is discussed in detail here.

Out of respect for paying subscribers (who know the indicator’s real name), we will call this indicator ‘secret sauce.’

On September 22, the ‘secret sauce’ money flow indicator (blue graphs) rallied to new all-time highs even though the S&P 500 did not. This was to be longer-term bullish, because rising demand was to be followed by rising prices.

The percentage of stocks above their 50-day SMA (purple graphs) did not confirm the new ‘secret sauce’ highs. This suggested short-term weakness.

The September 25 Profit Radar Report concluded the following: “Longer-term: We are still looking for the S&P 500 to reach our long-standing up side target around 2,300. Short-term: We are waiting whether the S&P will break below 2,119 prior to moving higher.”

Investor Sentiment

Investors have been predominantly bearish throughout this bull market. Based on bearish investor sentiment (bullish for stocks), we never wavered from our position that a major market top is not visible.

For example, the Profit Radar Report’s 2016 S&P 500 Forecast stated back in January that: “Investor sentiment near the May 2015 all-time highs was not as euphoric as at prior tops and not bullish enough for a major market top.”

The January 29 Profit Radar Report, however, pointed out bearish sentiment extremes (bullish for stocks) and noted that: “The pessimistic extremes were relieved enough to allow for another drop lower in the coming days. A drop lower is not required, but would be a good buying opportunity if it happens.”

The buying opportunity appeared in February, when the S&P 500 dropped into the low 1,800s.

The most recent comprehensive sentiment update (November 27 Profit Radar Report) compared current sentiment with the 2015 S&P 500 highs (see chart below).

The conclusion: “On average, investors today are still not as bullish as one would expect at a major market top. This allows for, and suggests, further gains in the months to come.”

Technical Analysis

The August 28 Profit Radar Report showed three uber-bullish forward projections (shown here) and stated that: “At this point we don’t know the scope of any pullback, but EWT and the June breadth thrust suggest that any weakness will be bought (perhaps even furiously). We consider the longer-term up side potential to be significantly larger than the down side risk.”

The June breadth thrust is discussed in detail here: 2016 Bear Market Risk is Zero Based on this Rare but Consistent Pattern

A detailed technical analysis and Elliott Wave Theory-based outlook is available here: S&P 500 Update – Expect the Abnormal (the ‘abnormal’ refers to continuous gains despite overbought conditions).

Seasonality

S&P 500 seasonality is bullish for the entire fourth quarter into the New Year.

Conclusion

All important indicators pointed higher before the election. The question was only how much of a pullback and how deep of a shakeout move we’ll get prior to the melt up. “The question therefore is not if stocks will rally, but when they will rally” was the conclusion shared in this MarketWatch article.

An indicator-based investment approach is superior to a news-based approach.

Using multiple credible and time-tested indicators further enhances results, especially when all indicators point in the same direction (such as before the election).

The image below illustrates how the odds of a winning trade are improved by a multi-indicator approach.

This doesn’t guarantee a profitable trade, but Profit Radar Report subscribers rarely ever find themselves on the wrong side of the trade.

Short-term, the market is overbought and over-loved and may pull back, but the bullish longer-term factors present months ago (aside from sentiment) remain valid.

Continuous updates with actual buy/sell recommendation are available via the Profit Radar Report.

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s profile of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, and 24.52% in 2015.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

 

Good, Bad and Ugly – How (Former) Subscribers Rate the Profit Radar Report

What do subscribers think about the Profit Radar Report? How about FORMER subscribers? This might be the most candid real life testimonial page you’ve ever seen. Here is a selection of comments ranging from complimentary to brutally honest.

The iSPYETF inbox has received quite some feedback in 2016. Most of it was complimentary, but we also received some downright angry criticism too.

Below is a selection of unedited comments. Prior permission to publish comments was not obtained. Therefore, the last name is abbreviated for privacy reasons.

About 1 out of 10 subscribers cancel within the 30-day money back guarantee period. In an effort to constantly improve the Profit Radar Report, we usually try to find out why. Some of the reasons are published below (see cancellation feedback).

Comments are sub-divided into four categories:

  • Feedback of new subscribers
  • Feedback after a missed trade
  • Feedback of subscribers who wanted to cancel their service
  • Feedback of subscribers whose credit card was declined at renewal

New Subscriber Feedback

Hi Simon, I am so glad that I subscribed to your family of subscribers! Went through your recent reports as well as recent ones. I must say they are simply brilliant!! I do subscribe to the Tom McClellan financial publications, but I think your analysis is far more comprehensive and insightful. Thanks for having such a brilliant piece of research. — Mohit T, India

You’re a genius Simon. Your website, its name, its logos, the annual fee, the colors in the website, the boat with the 4 engines and the timeliness of your hunches are all AWESOME. Man, that’s ONE SLEEK boat. It’s taken me 20 years to carve my way here, one lost dollar at a time 😦  You can post my comment on your website as a ‘testimonial of initial impression’ Simon. — Chris S, British Columbia

Simon, as a new subscriber, I must say that I am really enjoying your newsletter. I find it quite thorough and very informative. I would like to request that you please include more frequent updates for Crude oil. I did read that due to the volatility of the commodity, you don’t trade it as much. If possible though, please include it for those of us that trade it and would greatly benefit from your analysis. Thank you again and have a wonderful day! — Keena B, FL

Dear Mr. Maierhofer, just started reading your sight and may I complement you on some of the finest analysis I have ever read. My question and comment today is do you use the measured move technique in your analysis among your other tools. If you observe the last 3 big downturns, October 2014, Sept 2015, and Feb 2016, if you calculate the bottom of the SPY downturn in each case to the top of the rise up,each is a 25 point increase. I look forward to your response. Warmly. — Stuart S, PA

Hi I’m new to your newsletter and subscription. I need to clarify short ETF’s. 1) Are they traded after hours or before the market opens? 2) When you short a stock there is a time limit ( I think), is there a time limit on short ETFs? When I buy an ETF I always put a stop loss order on it between 3 and 5 %, allowing for fluctuation, is that about right? Your articles have really helped me focus my trading, before I was floundering. Thank-you! — Robert J, MT

Comments After Missed Trade

Simon, a wonderful intraday update. Thank you. Last night 5 minutes before market close, I passed up an opportunity to place $200,000 in SH at $19.77 because I listened to you. When I heard the surprising vote in the middle of the night, I haven’t even thought once to regret my missing out. Because I completely understood your reasoning. We do not gamble, this is not betting. We are trying to shift the odds ever so slightly to our favor, by insightful analysis hoping few out there do the same so that we can exploit. Please continue your disciplined approach, which is refreshing and although missed out on SH, the thought behind why we missed out gave me so much more confidence to play along with your advice going forward. Keep up the great work. I enjoy your commentaries, and always personal approach to respond. Warmly. — Gordon Y, Ohio

Hello Simon: I am a relatively experienced trader. I am very impressed with your detailed careful analysis and thoughtful money management. I did not take the spy short you recommended thinking the market was going to breakout to new high without a deep retracement. I was 50% long, 50% cash at the market close on  Thursday June 24. I had to deal with the huge gap Friday morning. I bought with the 50% cash SSO at the open on Friday and sold SSO and my long holdings after the bounce and made money. I am now flat. But what I did was wrong and what you did by closing SH Thursday was right. Looking forward to learning from you and profiting from your recommendations, Sincerely. — Mazin K, North Carolina

Thank you so much for your honest evaluation and extensive market knowledge. We appreciate. Market is market, it is two way streets.  When we are trying to make money, at the same time we should prepare to lose money. Thanks for your dedication and good work. — Matthew Cheng, TX

Don’t sweat it. You’ve had many more good calls than bad in the few years I’ve been following and your insight is more valuable (to me) than ever. Have a good weekend. — Mike M.

Cancellation Reasons/Feedback

Please cancel. Not what I am looking for. — Robert H, TX
Robert H. re-subscribed and sent the following e-mail (following a login trouble shoot) four months later:
Sorry. You are right. I am using my I phone and the main computer is on auto for login. Thanks for you insight into the market. I am impressed. Have a good evening. — Robert H, TX

Please cancel my subscription. — Doug F, MA
Doug re-subscribed three months later and sent the following e-mail:
Simon, you do meticulous work, thanks for all your insight! — Doug F, MA

Hi Simon, I love your service and your work; in fact in the time following you have taught me a lot. I have used this knowledge to home my own investing model based on the IBD’s CAN SLIM approach. I have been back testing my model through the up/down bull cycle that started late in 2008. It is simply now time to use this model on my own without help from others. I am reducing out all of my investment expenses (advisory publications) so that this money is going to my capital. Thanks for wonderful service and I wish you the best. At this time, I do want to cancel my subscription when the current period ends. Kind regards. — David F, IN

Dear Simon, The analysis just seems spot on. I like the way you can tie together different disciplines, such as Elliot Wave, classical charting, sentiment measures and the like. I find your accuracy almost startling. I believe if I were retired and had the time to trade profitably, I’d love to take your trades and the slight commitment they involve.  At this stage however I mostly auto-trade, but I see that you have a number of asset classes in play, and also variable trade sizing and the like, which I think would probably require a little more attention to implement than I can give at this stage. What I am wondering is have you ever considered offering your work on Collective2 so that subscribers can follow simply by allocating the service a portion of their portfolio, and that way they’d have all the ‘hard work’ done for them. Your trade record speaks for itself and I certainly would not hesitate to subscribe if you listed on Collective. With sincere apologies again for the inconvenience, I’d be grateful for a cancellation of my account. — Gregory S, Australia

Simon, my need to cancel is motivated by a personal “issue” that will take some time to resolve. Your service appears to be well worth the $199 per year. I’m afraid I must remain within the 10% that cancel. — Stephen W, WA

Dear Sir/Madam I would like to withdraw my 30-day trial subscription begun on 7 March. The research is very good, but I would like more trade set ups. However, I think the time difference from New Zealand to New York may deter me from trading at all on the NYSE. Thank you for the opportunity to view your site and please credit my credit card account. Kind regards. — Bruce R, New Zealand

Hi Simon, thanks for the refund. It’s pity I’m not in the position to use your profit radar report. However, I will continue to be one of your reader and to follow your e-Newsletter and your articles. Thanks again for your time. Best Regards. — Domenico B, Italy

Thank you Simon, I appreciate how you’ve handled things from the start and with very fast, timely service. All the best to you too, take care. — Steve B, OR

Simon: Thanks, but please cancel my subscription. I may reconsider in the future as my needs change, though I understand it would probably be at the full price. — Daniel Talheim, MI

I canceled my subscription a year ago, received confirmation and now you took it off my credit card again. Unbelievable. I request immediately to pay my money back plus interest (I’m paying 19.9% on my credit card). I hope you understand that I will make this now public. To me this is almost criminal how you screw your customers! Thats probably why there is no real contact on your website as well. — Rolf H, British Columbia
Ralf was right, we accidentially charged his credit card even though he cancelled. We appologized and issued a full refund … and he continued to throw insults. BTW, the ‘Contact Us’ section is right here.

Simon, thank you for the offer, but I would like a full refund. I think you do good work, but I’m not in a position to take full advantage of it at this time. Thanks. — Roger P, IL

Please cancel my account and process my refund, I will stay on any newsletters you publish and when we start trading stocks and ETFs I will reactivate, thanks for the service! — Thomas D, IL

Hello Simon, I would like you to process a Full Refund right away. I appreciate your analysis and I think your Service is for sure one of the better ones around but the main reason for me to quit your service is that my trading approach differs too much from your approach.  Again, thanks for the trouble.  Have a good Time, Greetings from Hamburg, Germany. — Tobias B, Germany

Since I am not going to be trading in the future, this information will not be useful to me. Please cancel the subscription and give me the credit to my credit card. — Kasi R, CA

Hello Simon, Due to some unexpected developments I will not be able to extend my subscription past the trial period at this time. I very much appreciate the opportunity & will continue to follow your website & posts. All the best. — Alan S, FL

Hi, Simon, Great to hear from you. Please just cancel my account and refund me for now. I am extremely busy with career now. Will take up on investing and trading later on. Thanks so much for all valuable insight all the way. Li W.

I would like to cancel my subscription. No specific reason. I found another service that I would like to try. So, I may be back. — Arthur G, NM

Simon: I was really hoping to use your service to help time/trade my 401 k by telling me when, and when not to be, in the S&P 500. I can only make two trades a month in my account. Perhaps if your service included a simple long/short the S&P 500 signal that was sufficiently backtested and produced better than a buy and hold return…that would be something I’m very interested in. Thank you for issuing a full refund. I wish you all the best. You have a good service, but one that is not yet quite right for me and my needs. Have a great and blessed day/weekend!  🙂 — Kevin F, FL

Simon, I trade at Rydex and your advisory isn’t helping me. Please cancel my subscription. Thanks. Please send cancellation confirmation. — Donald M, IL

Please cancel and refund the full amount. I am sure I will return at a future date. Would like to see your Wednesday report if within the 30 day period. — Richard  A, FL

Please cancel my subscription to ispyetf. I find that it is very similar to another publication that I receive. Thanks in advance for crediting my credit card and thanks also for the ability to look at your good work. — Paul H, C

Please discontinue my trial subscription, and do not charge my credit card. I admire the effort that goes into you site and messages, but it’s not the service I am looking for. Thank you. — Howard H, NH

Honestly, your site is very poor and results are ‘snipits’ from past reports. Your site is borderline fraudulent. Please, I demand an immediately refund of my money. This is a terrible site and potentially fraudulent operation. Please reconsider what you are doing here. — Tim B, TX

After credit card was declined:

I really appreciate the loyalty discount. Most of all I appreciate what you do. While often your analysis is over my head technically, I am still able to glean the clearest picture of likely outcomes from your work. I always expected that when I retried, I would invest in bonds, live a relatively stress-free life and maybe have something left to pass on to my children. Instead, investing has become an incredibly treacherous and anxiety-inducing undertaking, and without your newsletter I would truly be adrift at sea without aid of navigation.  — Frank O.

Simon, First of all, I hope you had a good weekend. I am sure you work long hours, and deserve a break. Secondly, I want to thank you for your patience during my SCREW UP, last week. It does my heart good to know there are caring people out there, in this upside down world. I sent you my credit card information this morning on your website under: “update payment information”. I hope it came through. Rather you agree with me or not, I would appreciate it if, when you send the charge to my account, you add a prorated amount back to my original enrollment date. I wasted a lot of your time, and really was not off line very long during my confusion. It would help my comfort zone a lot. I like your site for several reasons. I am an ETF timer, and have had some success using RS movement off of a site, for a several months. — John S, SC

Simon Maierhofer is the founder of iSPYETF and the publisher of the Profit Radar Report. Barron’s rated iSPYETF as a “trader with a good track record” (click here for Barron’s profile of the Profit Radar Report). The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, and 24.52% in 2015.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

 

Barron’s Features the Profit Radar Report

On April 2, 2016, Barron’s featured the Profit Radar Report in their ‘Digital Investor’ section written by Mike Hogan.

This one-page column profiled Zack’s $2,995-a-year ‘Zacks Ultimate’ service and Simon Maierhofer’s Profit Radar Report ($199/year).

The online version of this column is available here (subscription to Barron’s may be  required). The complete magazine version of this article is shown at the end of this article.

Below is a (edited) version of the article that focuses on the Profit Radar Report.

Original print version (Barron’s April 2, 2016 edition):

Simon Maierhofer is the publisher of the Profit Radar ReportThe Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013, 17.59% in 2014, and 24.52% in 2015.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

 

S&P 500 and Dow Jones Short-Term Forecast with a Twist

The S&P 500 is trading near a technical ‘line in the sand,’ which separates bullish from bearish potential. The Dow Jones however is suffering from weakness in sectors that should be rallying. Here’s how to make sense of the divergences.

It’s been an interesting week, so I want to briefly recap what happened and what’s likely to happen next.

The November 27 Profit Radar Report summed up our plan for the weeks to come as follows: “A temporary correction in early December is becoming more and more likely. We are looking to go into cash and go short if our Dow Jones short trigger is filled.”

We are always looking for the broad index with the best low-risk setup. For our November long trade this was the S&P 500 via the S&P 500 ETF (NYSEArca: SPY). The S&P 500 reached our up side target at 1,810, so we closed our short position.

The main reason we expected a correction was the Dow Jones  chart.

The bold red line shown (at 16,150) in the Dow Jones chart below actually goes back to the 2000 highs. This is significant resistance. Sentiment was already overheated, so if a correction was to occur it should be right there. We went short the Dow Jones at 16,100.

The December 4 Profit Radar Report expected a bounce into the red area followed by another leg down into the green area for both the Dow Jones and S&P 500.

The bounce happened, which brings us up to date.

The notion of another down leg remains alive, but the bounce has been stronger and more persistent than expected. We now need to look at an alternative outcome.

Any move above the S&P 500 (SNP: ^GSPC) all-time high at 1,813.55 will reduce the odds significantly of an immediate down turn and favor higher prices.

A move above S&P 1,813.55 would normally be a buy signal, but the Dow Jones (NYSEArca: DIA) is lagging (stuck at the 61.8% Fibonacci retracement level) and sentiment is dangerously bullish.

Although we were expecting another leg down the writing on the wall suggests stocks want to move higher. We have the stop-loss for our short Dow Jones position just below our entry point to virtually assure a winning trade.

Is it worth going long as the S&P 500 breaks to the up side? Perhaps for short-term traders looking to capture one or two percent.

Simon Maierhofer is the publisher of the Profit Radar ReportThe Profit Radar Report presents complex market analysis (stocks, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. We are accountable for our work, because we track every recommendation (see track record below).

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.