Weekend Update: Rapidly fadin'

Intermediate Term Sell

We've been here before: DJIA/SPY models flipping Short. There have been two other Intermediate Term Sell Signals in the past 12 months, September 9, 2016 and March 21st of this year. Both of these signals turned out to be false alarms and were closed out with losses. Each one was followed by very profitable Buy Signals with option gains of +240% and +50%, respectively.

None of that matters because this trade is an island onto itself and is just beginning to unfold. Maybe Dylan is right this time, that, "....the order is rapdiy fadin'."  It has all the pattern recognition earmarks of the signal being on the right side of a leg down in the market averages (See DJIA and Nasdaq charts on the far right of multi-chart screen shot below). Any market weakness next week and the trade will quickly reach a break-even stop. After that, with risk at zero, this has the potential to be a very profitable trade. If the model is wrong again, risk is limited to what is now a -42% stop basis new trailing exits. 


So far so good on the new AMGN model. In fact, so far real good. If you look on the trades table below under the Blue Line Trailing Stop column, the new stop is at 5.55, meaning worse case basis is a 29% loss on the trade (down from the initial -50% stop). In the Short-Term service, Blue Line Prime, the AMGN trade has already locked in a 15% gain no matter what happens next week. 


What can I say? The stock was up over $100 since last weekend's update and touched $777 on Thursday, with the Dow down 250 points. During the same time, Bitcoin was up $1,000. GBTC is acting like a very expensive call option on Bitcoin. Robert Prechter wrote a piece on Bitcoin in 2010, recommending it at 6c. I actually remember that article, thinking he was nuts....but as things have unfolded, it was me. 

Next Update Tuesday, Alerts as needed.