Wednesday, September 10, 2014
I must admit that nearly every sell signal I've gotten over the past few years has not proven to be correct. Prior to Federal Reserve money injections and ZIRP (zero interest rate program), these sell signals were "take it to the bank" accurate. That being said, I was selling call premium and adding SPY put spreads and buying outright puts in both the October and January 2015 series today.
I have confidence in my positioning based on all of my derivative indicators rolling over. The first one I look at is the standard deviation chart of the SPY price action.
Another indicator I watch is the daily change in the 20 day moving average.
Further substantiating my reasoning is a chart of the standard deviation of the MAD (moving average deviation).
Although the top may not yet be in, I feel that the biggest gains over the coming years will be on the downside so I will continue using up and down trading opportunities to expand my downside position and push it out to the future.
Decent gains on the downside parlayed into upside gains that could come on the last and final major rally of this bull market could put one in a very fine position at the market top to reap millions from the major decline that is sure to follow.