7-1-15 – Trading Strategy
6-26-15 BZQ (Inverse Brazil) @ $84.00
6-29-15 SOXL (US Semi Conductors) @ $31.42
JNUG (Junior Gold Miners) Stop @ $18.87 for a 6.35% Loss
UVXY (Ultra VIX) Limit order filled @ $39.88
UVXY (Ultra VIX) Limit order filled @ $45.58 for a 14.29% Profit
– The markets are testing an ultimate ulcer Index with these wild corrections. However, if this was a true panic like what appeared yesterday, today would have been a repeat. With this type of uncertainty in the markets, the major trends are still holding, but it’s a wild ride if you are in them.
If you are not in them, picking the proper entry point is very difficult. In situations like this, I switch over to volatility trades. Looking for extreme price movements that have the chance at reversing.
JNUG (Junior Gold Miners) is one example of this. JNUG is now down 8 days in a row which is a historical record. I lost on my first trade, and with this extreme and it’s history, I will be trying again to get a swing bounce on this. Unfortunately, it won’t be for profit, it will be to recoup today’s losses.
I don’t advocate compound trading in which you double your entry if you take a loss, but history can be a very good guide and the percentages are high that such a market will reverse.
Current Holdings with Open Orders for 7/1/15
Sell BZQ (Inverse Brazil) Limit @ $92.10 (9.644% Profit)
Sell BZQ (Inverse Brazil) Stop @ $82.50 (1.79% Loss)
– Nothing has changed with the direction of this market, the markets are simply becoming more volatile. My stop hasn’t been hit yet and I’m not risking a great deal on this trade so I am going to keep the same order for tomorrow.
Sell SOXL (US Semi Conductors) Limit @ $35.00 (7.69% Profit)
Sell SOXL (US Semi Conductors) Stop @ $30.95 (4.77% Loss)
– Moving up my stop since we saw a bit of recovery today. I still don’t like where I’m at in this so I’m trying to limit my loss as much as possible. However, it could easily gap down in the morning like what happened with JNUG and I could lose more than I am allowing.
New Open Orders for 7/1/15
Order Cancels Order
Buy JNUG (Junior Gold Miners) Stop @ $18.70
Buy JNUG (Junior Gold Miners) Limit @ $18.50
– I will day trade this depending on what my fill is like tomorrow. My goal is 5% profit.
Buy UVXY (Inverse VIX) Limit @ $39.50
Sell UVXY (Inverse VIX) Limit @ $47.50 (15.82% Profit)
– Another volatility play if we get a good dip in UVXY tomorrow.