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NYA trade ideas

NYSE Composite at Key Pivot PointThe NYSE, a laggard compared to $SPX, $NDAQ, et al, is just points away from printing a higher high (Sep/Oct high), but also bound to the peak of a potentially dangerous ascending wedge. Should a higher high be printed, this would be very bullish for the market in general. However, if it does indeed top here, it suggests a strong reversal is likely across all the major indices. Hardly a coincidence, given that next Wednesday's FOMC notes will reveal whether or not a July rate cut is coming. The market has currently priced in a 25bp rate cut in July. Pausing, or hiking would be incredibly bearish and probably spark a prompt sell off.
TVC:NYA
by axelroark
NYSE bear market short entry before DEEP correctionHi all, Where we are right now: 1, Historically over-valued equity markets (average PE in excess of 30 in the SPX) / low dividend returns on equity (dividend yields approaching the return rate on Treasuries), 2. Volatility high and increasing (i.e. investors 2-4%pa dividend payouts can be wiped out in a day or two of bearish sentiment), 3. The market hasn't made a higher high in 17 months, 4. Global growth outlooks are being downgraded (New Zealand, Australia, China, and the USA and more just within the last few weeks and the IMF downgraded global growth outlooks for 2019 on the 9th of April), 5. Interest rates are set to drop again (it is becoming apparent Quantitative Easing monetary policy is a box that cannot be closed again), 6. There seems to be capital flight to safety - especially into USD treasuries and into the JPY, 7. Gold up 5% since the 22nd of May, 8. There are deeply concerning political signals being sent to the U.S. economy (and the world) by politicians who appear to be working AGAINST the best interests of the nation (despite what are probably good intentions). 9. Plus, if Douchebank goes under it may necessitate liquidation of 47 trillion in derivative contracts www.wsj.com My original bearish position on the S&P500 was simply based on points 1 and 2. Despite everything else, these two points are sufficient to explain why this drop will be a big one. If all the gains (capital and dividend) from the past 2 years can be wiped out in a few days or a week, then the investors are clearly taking more risk vs the reward they are receiving (if they are in profit). Tiny dividends are okay as long as the share price continues upwards, but sideways or down just won't do the trick anymore. Most of the buying of the past 18 months seems to have been from buy-backs and leveraged traders. Most of the buying of the past 10 years can be traced directly to Quantitative Easing monetary policy - cheap cash looking for a place to go. There is a chance that the experimental remedy for the 2009 crisis removed the symptoms temporarily while the underlying illness progressed. I don't want to mention Elliot Wave, as so many people write it off, but EW points to the maturing of a very long-term cycle - I see the bull-run post 2009 as being the final impulse wave up before a correction. Lets ignore EW, but the past 10 years has seen the weakest economic expansion in history parallel with a very strong bull-run in the NYSE / SPX / DOW, is it more reflective of central bank monetary policy instead of real growth? www.bigtrends.com Oh well, that's enough. Good luck everyone. You might read the above as in a completely different way - and remain bullish. I just can't see how right now. All I see from todays bullishness is a place to note the end of wave (1) down. Next should be a lower high.
TVC:NYAShort
by flyinkiwi10
2
NYSE in a bear market for past 16 monthsThe NYSE is the biggest and most liquid equity market in the world. It has been highly volatile since the start of 2018 and has been making lower highs and lower lows since Jan 2018. Yet there is still talk on the ongoing equity bull market in the US. From all time high in Jan 2018 to the brief low in December 2018 the drop was over 20%, meaning we are technically in a bear market. www.multpl.com (not for the NYSE index but a reasonable proxy) shows that the S&P 500 currently sits at 31.05 average PE ratio as at May the 3rd. A valuation of 31 times earnings is very high and has historically proved to be unsustainable. The earnings are diluted too much and dividend returns of 2-4% become common (unless the Company juices the dividend returns with borrowed money or increases share buy-backs), which is okay when the equity price is rising... but when it is volatile or dropping the calculus changes. Investors realise that the risk adjusted returns are too low and will seek lower but safer returns, or higher returns elsewhere (possibly in growing emerging markets). This situation will result in profit-taking (as is happening). On the way down, I expect average PE ratios to blow through a fair 15:1 level and go below (the bottom of my blue box is where (if earnings remain stable) PE ratios will equal roughly 15:1. Waves (1) through (5) appear to form the 5th wave of a much larger multi-decade move (not charted due to space). Hopefully, I have charted a plausible scenario. If you use the Elliot Wave principle in practice you would look for: - wave (2) to retrace not below the start of wave (1) which is the case, - wave (2) to retrace more than wave (4); wave (2) retraced 50% while wave (4) retraced more than 38% but less than 50% (its just a guideline - but a useful guideline), - wave (3) to generally be the longest wave (often the longest nut never the shortest) and to normally exceed a 1:1 extension of wave (1) - which is the case, - wave (4) should not enter into the wave (1) territory (some exceptions exist) - which is the case, - and wave (5) to normally end around the 1.618 extension of wave (1) which is ALMOST EXACTLY the case. - This will precede an ABC correction that retraces a significant portion of the previous move (which seems to be unfolding). - The past 9 years of the NYSE is a textbook example of an impulse wave - the only thing missing would be for wave (3) to be a bit steeper / faster moving price move. Sometimes it is hard to arrive at a wave count, but not in this case. Sometimes waves extend, but seemingly not in this case. Fundamental justifications for my bearish view include corporate debt loads, volatility, risk adjusted return, downward revision in global growth prospects, money managers reducing exposure to equities, and my views on the manipulation of interest rates and currency supply by the fed among other factors. I have already added significantly to my margin via successful short trades last week and will be looking to re-enter short once a lower high has formed. The hard part will be holding on. Just one last comment (if this wasn't already long enough); I don't revel in my bearish view. If I (and a lot of other people) am right this will mean employment and investment losses and everything negative that is associated with that. All I am trying to do is to protect myself and my family. Thanks for viewing and protect those funds.
TVC:NYAShort
by flyinkiwi10
1