Monthly Archives: December 2015

12-30-15 – Trading Strategy

12-31-15 – Trading Strategy

What I’m in


12/30/15 – DRN (Real Estate) @ $77.50

What I’m selling


Sell DRN (Real Estate) Limit @ $81.00 (4.52% Profit)
Sell DRN (Real Estate) Stop Limit @ $74.25 (4.19% Loss)

What I’m buying


No new orders for tomorrow. I think closing out 2016 on a win will be good for the mental health. With a short day tomorrow I’ll wait to see if we get a sharp rebound day on the first day of trading in 2016!

Today’s Updates


Market Snapshot 12-30-15

** Markets will close at 2pm EST tomorrow and will be closed all day on Friday **

I think today’s board speaks for itself. Enormous amount of liquidation as people are existing positions. This isn’t surprising considering many returns are flat or negative for the year and the tax write-off of selling before the end of the year could be quite tempting.

Almost EVERY market was at or above their extreme Average Trading Range (ATR) for the day and this occurred across the globe. 2016 may mark the year this 5 year bull market finished. However, the way I trade and detail in my Educational Series it doesn’t matter if the markets are going up or down, just as long as they stay in one direction or the other for a sustained period of time.

SPXL (S&P 500

Trading is full of ups and downs no matter if you are a day trade or a long term investor, but for me, today was up, way up!

DGAZ (Inverse Natural Gas) limit order filled @ $14.95 for a an 18.65% return on a $60k position for $11,900 profit!

Trade setups like this don’t occur often like I’ve been saying for the past couple of weeks, but think if all you did was look for just these setups? You could spend very little time trading and potentially have really good years.

Here is what it looked like:

MondayUGAZ (Natural Gas) broke above the top of the Keltner Band and I took two positions ($20k each) in DGAZ (Inverse Natural Gas)

Tuesday – I was stopped out with the large opening gap in UGAZ (Natural Gas) and then I took on a ($60k) position in DGAZ (Inverse Natural Gas). I did this because this was the second day in a row to break the Keltner top which is very very difficult for a stock to do. This indicates the price went too far, too fast, so I put in a very large position.

I compare this to BlackJack card counting strategies. If you are familiar with how it works, you increase your bet size dramatically when the odds are in your favor. With the ETF crossing up above the Keltner Band for the second day in a row, the odds were heavily in my favor.

UGAZ 12-30-15

With this much equity position, I was watching closely this morning to find the right exit. On a 5 minute chart, I decided to exit once I saw price move down below the 20-bar moving average in purple. Normally this is a 20-day moving average, but because I was on a 5 minute chart, this would be a 20-bar or (20 * 5 minutes) 100 minute moving average.

DGAZ 12-30-15-1

Here is my intraday exit of DGAZ (Inverse Natural Gas) at $14.95

I had a sell order for $16.00, but when I woke up and started watching price fall, I thought it was already a good enough return to exit. Fortunately it was timed well enough. Hard to say what will happen tomorrow, but I don’t like to stay in volatility trades for more than 1-2 days and an 18% return overnight is too hard to give up especially with as much as I put into the position.

DGAZ 12-30-15

What I’m selling


Sell DRN (Real Estate) Limit @ $81.00 (4.52% Profit)
Sell DRN (Real Estate) Stop Limit @ $74.25 (4.19% Loss)

My order for DRN was filled near the end of the day, most likely caught up in the global sell off of people exiting their positions. Nothing has changed the technical significance of this trade. All prices are trending and above their moving averages, we didn’t dip down to the previous resistance level and PPO is positive. I’m keeping a wide stop as I suspect volatility will continue, but so will the trend. I will move my stop up accordingly if I see profitable days.

DRN 12-30-15

What I’m Buying


No new orders for tomorrow. I think closing out 2016 on a win will be good for the mental health. With a short day tomorrow I’ll wait to see if we get a sharp rebound day on the first day of trading in 2016!

12-30-15 – Trading Strategy

12-30-15 – Trading Strategy

What I’m in


12/28/15 – ($60k vs the normal $20k) DGAZ (Inverse Natural Gas) @ $12.60

What I’m selling


Sell DGAZ (Inverse Natural Gas) Limit @ $16.00 (26.98% Profit)

What I’m buying


Buy DRN (Real Estate) Limit @ $77.50
Sell DRN (Real Estate) Limit @ $81.00 (4.52% Profit)

Today’s Updates


Market Snapshot 12-29-15

SPXL (S&P 500) Limit order filled @ $87.50 for a 1.74% Profit
DGAZ (Inverse Natural Gas) Position 1 stopped out @ $12.53 for a
15.34% Loss
DGAZ (Inverse Natural Gas) Position 2 stopped out @ $12.53 for a
14.18% Loss

Glad to be out of SPXL (S&P 500) after watching it bouncing around wildly for the past couple of weeks, but let’s take a look at what the heck happened in UGAZ/DGAZ today.

First, this is a 3x leveraged ETF, so double digits moves are to be expected. If this isn’t your cup of tea, that is perfectly fine. You can still trade natural gas without the larger prices swing by looking at UNG.

However, despite breaking a Keltner top, we didn’t get the morning reversal as I suspected, but a huge morning gap higher. I had a $40k position and now I’ve increased it to $60k because of my personal choice that it cannot sustain these levels for long.

I put in a stop order which worked against me because of the large gap down in DGAZ (Inverse Natural Gas) this morning which had a large recovery by the end of the day.

What I’m selling


Sell DGAZ (Inverse Natural Gas) Limit @ $16.00 (26.98% Profit)

I won’t be setting a stop on this tomorrow because if it goes against me, I will have to ride through this. From a technical perspective there is strong evidence this should reverse as UGAZ (Natural Gas) has moved over 70% higher in just four days.

Looking at the chart of UGAZ (Natural Gas) you can see we opened higher above the Keltner band and closed lower on the day. I’m suspecting this momentum will continue into tomorrow. I may not get filled at $16.50 so I will look to sell intraday if possible.

DGAZ 12-29-15

My order for tomorrow in DGAZ (Inverse Natural Gas)

DGAZ 12-29-15

What I’m Buying


Buy DRN (Real Estate) Limit @ $77.50
Sell DRN (Real Estate) Limit @ $81.00 (4.52% Profit)

DRN (Real Estate) has gapped above it’s resistance level of $76. PPO is positive, price is above all 3 major moving averages and we’ve broken past resistance so there is no reason I shouldn’t get in. Asking for a small discount of $77.50 to get in. My stop will be $76.00 if I get filled.

DRN 12-29-15

12-29-15 – Trading Strategy

12-29-15 – Trading Strategy

What I’m in


12/17/15 – SPXL (S&P 500) @ $86.00
12/28/15 – DGAZ (Inverse Natural Gas) @ $14.80
12/28/15 – DGAZ (Inverse Natural Gas) @ $14.60

What I’m selling


Sell SPXL (S&P 500) Limit @ $87.50 (1.74% Profit)
Sell SPXL (S&P 500) Stop @ $82.85 (3.66% Loss)

Sell DGAZ (Inverse Natural Gas) Position 1 Limit @ $17.75 (19.93% Profit)
Sell DGAZ (Inverse Natural Gas) Position 1 Stop Limit @ $13.50 (7.53% Loss)

Sell DGAZ Position 2 Limit @ $16.30 Limit @ $17.75 (21.58% Profit)
Sell DGAZ (Inverse Natural Gas) Position 2 Stop Limit @ $13.50 (8.78% Loss)

What I’m buying


Buy BZQ (Inverse Brazil) Limit @ $70.50 
Sell BZQ (Inverse Brazil) Limit @ $75.00 (6.38% Profit)

Today’s Updates


 

Market Snapshot 12-28-15

I think Monday is setting the precedence for how 2015 will end. Strong global sell-off’s with many markets exceeding their average 7-day ATR.

GASL (Natural Gas Companies) fell 12.35% vs a 14.26% ATR but UGAZ (Natural Gas) was up 28.49% vs a 10.42% ATR

JNUG (Junior Gold Miners) fell 9.86% vs a 9.46% ATR

RUSL (Russia) fell 9.46% vs a 7.67% ATR, but this was most likely associated with the 9.93% drop in UWTI (Crude Oil) vs it’s 8.46% ATR

YINN (China) fell 4.60% vs it’s 4.43% ATR

and let’s not forget the trade I took today. UGAZ (Natural GAS) closed up 28.49% VS it’s 10.43% ATR. UGAZ has never had this high of a daily movement before which makes it ripe for some level of reversal tomorrow.

DGAZ (Inverse Natural Gas) limit order filled @ $14.80

and I decided to double my position on the close

DGAZ (Inverse Natural Gas) limit order filled @ $14.60

What I’m selling


Sell SPXL (S&P 500) Limit @ $87.50 (1.74% Profit)
Sell SPXL (S&P 500) Stop @ $82.85 (3.66% Loss)

I’m getting a bit paranoid here with so much red across the global markets. SPXL had a nice recovery after nearly stopping me out, but missing by .10 cents. A profit on this trade may be high hopes, so if I get to $87.50 tomorrow I’ll jump out with a small profit at this point.

SPXL 12-28-15

Sell DGAZ (Inverse Natural Gas) Position 1 Limit @ $17.75 (19.93% Profit)
Sell DGAZ (Inverse Natural Gas) Position 1 Limit @ $13.50 (7.53% Loss)

Sell DGAZ Position 2 Limit @ $16.30 Limit @ $17.75 (21.58% Profit)
Sell DGAZ (Inverse Natural Gas) Position 2 Stop Limit @ $13.50 (8.78% Loss)

Today UGAZ (Natural Gas) exploded with a 28.49% move to the upside and a close at the top of a Keltner Band. I use Keltner Bands to determine when a stock or ETF has moved too far too fast. I sent out a notice that I was going to get in at $14.80 today and it was filled. Seeing that it dropped even lower by close I saw another opportunity to double up my position so I am now in this personally for $40k. The last time UGAZ spiked this high was a 32.82% move higher which reversed dramatically the next few days back in January of 2015.

UGAZ 12-28-14-2

Nothing is ever a sure thing, but this is a rare circumstance for prices in this market to go this high and sustain it. The real tricky part is determining a stop loss. One can only hope it’s wide enough to allow for some morning action before the expected reversal in price. I’m going for a big percentage move because it’s happened in the past and I’m doing based on what is possible, not on trying to simply squeak out some profits for the month of December. This is one of those once a year trade setups that could have a large potential return so I will be watching this closely during the day tomorrow.

The last large move up wasn’t a Keltner top like we can see today

UGAZ 12-28-15

Here are my orders for DGAZ (Inverse Natural Gas) for tomorrow

DGAZ 12-28-15

What I’m Buying


Buy BZQ (Inverse Brazil) Limit @ $70.50 
Sell BZQ (Inverse Brazil) Limit @ $75.00 (6.38% Profit)

Tomorrow ATR high is $14.58 which is still close to the $14.50 resistance level I would expect to see a reversal so I am going to put in another order for BZQ (Inverse Brazil) tomorrow.

Today’s chart of BRZU (Brazil)

BRZU 12-28-15

My orders for tomorrow in BZQ (Inverse Brazil)

BZQ 12-28-15

 

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