7-31-15 – Trading Strategy

7-31-15 – Trading Strategy

Current Holdings

Real time portfolio updates are now available here
7/28/15 – EPV (Inverse Europe) @ $52.00

Today’s Updates

The markets saw some good corrections to the Fed mania. It almost makes me question existing my bearish positions during the fed 2-day run. The real test will be to see how tomorrow turns out. If we end the week bearish, than we should have good confidence that the bearish trend will continue. My position in EPV (Inverse Europe) did improve some, so perhaps tomorrow the bearish trend will continue and it will move into a profitable position.

Market Snapshot 7-30-15

Current Holdings with Open Orders for 7/31/15

Sell EPV (Inverse Europe) Limit @ $54.00 (3.85% Profit)
Sell EPV (Inverse Europe) Stop @ $50.50 (2.88% Loss)

– With today’s movement I will be keeping the same order for tomorrow.

EPV 7-30-15

New Open Orders for 7/31/15

Buy TMF (20+ Year Treasury Bonds) Limit @ $74.00
Sell TMF (20+ Year Treasury Bonds) Limit @ $78.00 (5.41% Profit)

– TMF may be moving away from me, but I’m giving it one more chance at $74.

TMF 7-30-15

Buy JDST (Inverse Junior Gold Miners) Limit @ $12.50
Sell JDST (Inverse Junior Gold Miners) Limit @ $14.00 (12% Profit)

JNUG (Junior Gold Miners) still looks bearish, but may be in a pause for further downside movement. Putting in an order for 1 7-day ATR of JDST (Inverse Junior Gold Miners) to see if I can catch a good move down tomorrow.

Chart of JNUG (Junior Gold Miners)

JNUG 7-30-15

Where I want in on JDST (Inverse Junior Gold Miners)

JDST 7-30-15



7-30-15 – Trading Strategy

7-30-15 – Trading Strategy

Current Holdings

Real time portfolio updates are now available here
7/28/15 – EPV (Inverse Europe) @ $52.00

Today’s Updates

EDZ (Inverse Emerging Markets) Stopped out @ $38.93 for a 1.82% Loss
RUSS (Inverse Russia) Stopped out @ $38.96 for a 3.08% Loss
UVXY (Ultra VIX) Stopped out @ $26.73 for a 10.90% Loss

No news was good news today as the two Fed days seemed to bolster global markets. However, it’s a very short term speculation to believe there are any global fundamentals that will sustain this much further than this week. One can come up with many theories as to why the markets have moved globally down and then all reversed the last two days. However, it was a great excuse for all the short sellers to take their profits.

Market Snapshot 7-29-15

As for the way I handled this week, ready to play Monday Morning quarterback?

I sustained 3 losing positions today, but I need to examine how well I played them and should I have at all?

1) First, EDZ (Inverse Emerging Markets) and RUSS (Inverse Russia) I think were very well played because I was able to buy in close to 1% of the low for the day in each. I set a safety cushion very low to the low which allowed me to exit with minor losses.

If you look at the actual charts today for EDZ and RUSS the losses could have been much greater.

EDZ could have fell another 2%

EDZ 7-29-15

RUSS (Inverse Russia) could have fell another 7.8%

RUSS 7-29-15

Now onto XIV (VIX) and my play on UVXY (Inverse VIX)

Let’s look at XIV when I decided it was time to get into UVXY.

Technically, this was a good setup. Price had broken downward off a resistance level that it previously turned down from. Price broke below both the 20 and 50-day EMA and on increasing volume (although not extremely above-average but that isn’t always a requirement). PPO turned negative on this day as well. So to believe XIV would continue to fall certainly was not out of the question.

XIV 7-27-15

Looking at how it turned out with UVXY (Ultra VIX) the trade turned out bad because even though I was filled, the drop for the day was much further than expected.

UVXY 7-29-15

If UVXY was going to continue for a fourth day higher on the 29th, the $30 mark would have been near the low. However, it closed much lower and actually closed about 1.6x the daily trading range lower.

UVXY at the time had a 10% ATR so there is always risk, however putting in a bid near that 10% mark, say $28.30 was very unlikely on a new bullish move.

However, I think with such large ATR stocks, I should have put in a stop order at around 3-4% to be triggered on the same day. Ideally, I should have sold out on Tuesday when it filled.

** Another consideration could be not to play high ATR stocks during Fed Meetings. I believe that is my biggest mistake. I have seen many fed meeting days and volatility picks up, but I thought it would work in my favor instead of starting a new two day countertrend.

It never hurts to sit out through what could be predictable weeks of volatility especially when one is sitting on a $5,000 gain for the month. I would advice most traders to just sit out those weeks, as your win ratio will probably not be any better than 50:50 even if the technicals line up.

Current Holdings with Open Orders for 7/30/15

Sell EPV (Inverse Europe) Limit @ $54.00 (3.85% Profit)
Sell EPV (Inverse Europe) Stop @ $50.50 (2.88% Loss)

– Same order as yesterday.

EPV 7-29-15

New Open Orders for 7/30/15

Buy TMF (20+ Year Treasury Bonds) Limit @ $71.55

– TMF was a buy a couple of days ago as it broke upwards over the 50-day EMA again for the second time and when it broke over the previous high. One of the unique characteristics is TMF usually quite choppy so I’ve been waiting specifically for this pull back to get in and protect myself against any major downturns. I may not get in tomorrow at this price, but possibly Friday.

TMF 7-29-15

7-29-15 – Trading Strategy

7-29-15 – Trading Strategy

Current Holdings

Real time portfolio updates are now available here

7/28/15 – EDZ (Inverse Emerging Markets) @ $39.65
7/28/15 – EPV (Inverse Europe) @ $52.00
7/28/15 – RUSS (Inverse Russia) @ $40.20
7/28/15 – UVXY (Ultra VIX) @ $30.00

Today’s Updates

EDZ (Inverse Emerging Markets) Limit order filled @ $39.65
EPV (Inverse Europe) Limit order filled @ $52.00
RUSS (Inverse Russia) Limit order filled @ $40.20
UVXY (Ultra VIX) Limit order filled @ $30.00

What a strange day, it’s as though the entire globe decided to get bullish on markets. China closed lower last night, yet YINN (China) was up 5.17%. The only global affecting event is the US Fed’s 2-day meetings started today. It could be a temporary burst of optimism, and all of my orders were filled as a result.

Unfortunately what I thought was a conservative 1x ATR bid lower for UVXY (Ultra VIX) still wasn’t low enough and I’m already down in the position 8%. Hopefully this doesn’t turn into another gap down tomorrow morning like it did on 7/13. I am expecting a gap lower in UVXY in the morning and hopefully some noteworthy recovery. Also, I may hedge this trade with a trade in XIV (Inverse VIX) as well.

Market Snapshot 7-28-15

Current Holdings with Open Orders for 7/29/15

Sell EDZ (Inverse Emerging Markets) Limit @ $41.50 (4.67% Profit)
Sell EDZ (Inverse Emerging Markets) Stop @ $38.95 (1.77% Loss)

– I benefitted from the morning gap lower and got a better fill than expected. Hopefully tomorrows markets will all decline and my inverse position including EDZ will benefit.

EDZ 7-28-15

Sell EPV (Inverse Europe) Limit @ $54.00 (3.85% Profit)
Sell EPV (Inverse Europe) Stop @ $50.50 (2.88% Loss)

– Giving a little bit of room for this to move. I was able to hit my buy order and it didn’t close too much lower. However, I shouldn’t have to give up more than 2.88% before this turns in my favor.

EPV 7-28-15

Sell RUSS (Inverse Russia) Limit @ $44.50 (10.70% Profit)
Sell RUSS (Inverse Russia) Stop @ $39.15 (2.61% Loss)

– I really like the fill I got on this position and I’m able to limit my loss at this point. Putting my profit target at 1.5x the 7-day ATR.

RUSS 7-28-15

Sell UVXY (Ultra VIX) Limit @ $31.00 (3.33% Profit)
Sell UVXY (Ultra VIX) Stop @ $26.80 (10.67% Loss)

– I thought I put in a conservative enough bid, but I was clearly way off. I couldn’t have foreseen such a dramatic shift in direction like today. I’m already 8% down in the position and I feel that another 2.5% is the most I should give it. Crossing my fingers it doesn’t gap down majorly tomorrow.  As for my profit target, I’m focusing on a 1x 7-day ATR for tomorrow as a profit target. I’ll make a small profit off the table if it hits.

** I will be watching this during the day, if I don’t have to sell off at $31.00 then I may cancel my sell Limit order, but I will not adjust my stop order **

UVXY 7-28-15

New Open Orders for 7/29/15


– No new orders for tomorrow. If XIV turns out to be tradable I will decide on that tomorrow.