Monthly Archives: December 2015

Stocks on the Watch 12.13.15

Stocks on the Watch 12.13.15

Broker and Dead Investor_Large

I sometimes get a lot of flack posting bearish forecasts week after week. It’s not like I have control over the markets, but emotions run high when news isn’t considered “positive”. Why is bullish/bearish associated with positive/negative anyway? It’s only direction and as a trader, I like to trade in the direction of the trends.

The B12 Trader Educational Series teaches you how to trade in the direction of the 12 Markets that I track. I trade in markets instead of individual stocks because it’s harder to manipulate the price of entire markets as compared to individual company stocks. Using ETF’s to trade in and out of markets allows me to disassociate myself with a company I believe in vs a market that is moving in it’s natural ebb’s and flows. It also insures you get a global perspective which can be very insightful when you want to drill down into the minutia of opportunities that lie deeper.

Price breakdowns are traversing the globe while money is starting to flood into the more conservative investments such as Gold (GLD) and Bonds (TLT). As for everyone else, I’m calling it like I’m seeing it.

Good luck and good trading for the week ahead!

 

BRZU (Brazil) – Bearish

Brazil has been trading sideways between $22.50 and $16.00 for months now and though we had a small break below $16.00 support that was reversed, Friday concluded with a down day close below $16.00 and back into the existing downward trend lines. A gap down on Monday near $14.00 will signal the bear is ready to move. Brazil is a rather choppy market, so I’m personally looking closely at Monday’s price action.

BRZU 12-11-15

DRN (Real Estate) – Sideways

Last week I didn’t have enough price action to determine a direction and now it looks like we are going to test a $66.00 support level next week. If it breaks below we can look for further bearishness, but with the entirety of last week sitting in the red, I think the chances are higher we’ll see a bounce off $66.00 back into the channel than we will a break below.

DRN 12-11-15

EDC (Emerging Markets) – Bearish

Last week I was calling for a bearish consolidation and the move down would be signaled by a gap down below $12.50 which we saw on Tuesday. With this rapid decline in price and the heavy volume leading into Friday’s significant gap down, I imagine some short squeezes will be lining up for next week and I’ll be expecting a slight pullback but the overall downtrend to continue.

EDC 12-11-15

EURL (Europe) – Bearish

Like EDC (Emerging Markets) last week I was looking for the gap breakout of the triangle to signal a bearish move lower and that’s how it started followed by down days until the market close on Friday. This is a rather steep move downward so I’m tracing out possible upper/lower trend lines in anticipation of a pull back before further downward movement.

EURL 12-11-15

GASL (Natural Gas Companies) – Bearish

We saw the 5-day breakout to the downside once $15.00 was broken and we’ve witnessed an enormous drop to the downside despite the small recovery. $6.75 is showing a small support level, but there is nothing but downside potential for this market until further notice.

GASL 12-11-15

INDL (India) – Bearish

In last week’s post I highlighted that we will see a strong move down if we break below the $12.25 support level on Monday. The break didn’t come until Tuesday but we are now sitting a solid 8% lower for the week and fitting nicely back in the existing downward trend lines so I’ll be expecting to see more of the same next week.

INDL 12-11-15

JNUG (Junior Gold Miners) – sideways

JNUG had a nice potential setup last week with it’s strong close on Friday, but come Monday, it was clear this wasn’t going higher. As the week has played out it appears we’re in a sideways channel for now. However, we have been very strong support for many months now in the $29 – $34 range. A possible breakout to the upside is still possible and there will be many eyes on this market as it’s been beaten up for years now, so keep a close eye for a possible breakout to the upside still.

JNUG 12-11-15

JPNL (Japan) – Bearish

Site and wait and ye shall receive. Watching the sideways movements for more than a month and a half and Japan’s market finally gave us direction starting with an opening gap lower below $47.00 support. Friday signaled another huge negative for Japan with a large increase in volume on a big gap down to end Friday at a new low not seen since October.

JPNL 12-11-15

RUSL (Russia) – Bearish

Last week I was tracing out a rare expanding triangle but needed confirmation with a gap break down (seeing a pattern here?) below support of $13.50 to not only follow the expanding trend lines, but also break out of them. Russia tends to have very strong pull backs, so I’m waiting to see if we will get a test back to the $13.50 level possibly next week.

RUSL 12-11-15

SOXL (US Semi Conductors) – Sideways

SOXL bounced off resistance of $30 last week and is heading down for a test of $24. Like last week, I’ll be looking for a bearish confirmation if we break the $24.00 support level.

SOXL 12-11-15

SPXL (S&P 500) – Bearish

SPXL failed to break the $92.50 resistance level and has now broken out of it’s triangle consolidation on very heavy volume and breaking the low from the 11/16 low of $80.40. I think Monday will be a fight between the bulls/bears to see if they can create a double bottom support level which would make this into a sideways market like SOXL (US Semi Conductors) but I think continued downward movement is more favored due to the large volume going into Friday’s downward move.

SPXL 12-11-15

TMF (20+ Year Treasury Bonds) – Fake Breakout / Consolidation

I normally don’t make such a bold call without confirmation, but I’m very skeptical of this last breakout of this long term triangle consolidation. The last two attempts to break out of this triangle were done on large blow off moves higher. I don’t think we will see a sustained moved up next week, but a bullish move I believe is the least likely of the possible outcomes for next week.

TMF 12-11-15

UGAZ (Natural Gas) – Bearish

Break out your Fibonacci rulers, your pivot points, your oversold oscillators and averaging-down-buyers because the bottom pickers are coming out of the woodworks! I advocate trading what you can see in my Educational Series because no one can pick a bottom but they certainly will try. Sure, you can make money if you can do it, but you can make more money just waiting a short period of time for a build up of evidence that a reversal is in play.

Natural Gas is in a clear down trend and will be until there is evidence so call it otherwise. Be careful of all the “bottom callers” because they have been trying to pick this bottom ever since October and have lost large sums of money as a result.

UGAZ 12-11-15

UGLD (Gold) – Consolidation

Gold had a strong start on Friday but failed to capitalize and has slowly declined since. We’re still hovering the lower long term 2+ year trend line so I’m thinking the percentages are much higher price will increase before it breaks that lower trend line. More waiting and watching next week.

UGLD 12-11-15

UWTI (Crude Oil) – Bearish

The gap down below Friday’s close of $6.00 pretty much set the tone for the week on a very rapid decline. As always, the short sellers and bottom buyers will most likely push this up somewhat but the trend is clearly down and will most likely continue to do so into next week.

UWTI 12-11-15

XIV (Inverse VIX) – Short Term Bullish Reversal

As I was highlighting last week, the consolidation was about to wrap up and we saw the clear move to the downside starting on Monday and all the way to an explosive move lower on Friday. We’re now testing a strong support level of $23.00 so I would expect a short term reversal, but picking direction after that will be a coin flip. The move on Friday is a blowoff move so expect lots of chop in XIV next week.

XIV 12-11-15

YINN (China) – Bearish

China is sitting on a 5 day in a row bearish move. It’s outside of the downward trend lines so I am going to be watching for a quick reversal back into the trend lines sometime between Monday or Tuesday most likely. Last week I called for a gap down below $19.00 to start off the trend and Monday successfully delivered. Now that this move could be over, it’s time to wait and see what else develops.

YINN 12-11-15

 

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12-14-15 – Trading Strategy

12-14-15 – Trading Strategy

Current Sell List


Sell Position 1 XIV (Inverse VIX) limit @ $25.00 (4.17% Profit)
Sell Position 1 XIV (Inverse VIX) stop limit @ $22.00 (8.33% Loss)

Sell Position 2 XIV (Inverse VIX) limit @ $25.00 (8.08% Profit)
Sell Position 2 XIV (Inverse VIX) stop limit @ $22.00 (4.89% Loss)

Current Buy List


Buy SPXU (Inverse S&P 500) Limit @ $32.60
Sell SPXU (Inverse S&P 500) Limit @ $34.00 (4.29% Profit)

Current Holdings


 Real time portfolio updates are now available here

12/11/15 – XIV (Inverse VIX) @ $24.00
12/11/15 – XIV (Inverse VIX) @ $23.13

Today’s Updates


Market Snapshot 12-11-15

Friday concluded with another major bearish day for a week that is accelerating a decline across the globe. Only the conservative investments, Gold, Bonds and Junior Gold miners turned out positive news while many other markets are on multi day declines.

I’ll be looking forward to some slight pull backs next week to take advantage of these downward moves.

As for Friday’s trading, it went a little something like this…

XIV (Inverse VIX) Limit order filled @ $25.00
XIV (Inverse VIX) stop limit order filled @ $24.00 for a 4.00% Loss

This position was stopped out within an hour or so of entry. However, the reason for this was an anticipated rebound in VXX (VIX) because it was hitting a Keltner top.

XIV 12-11-15

As I watched the intraday movement I saw VXX (VIX) was going to break it’s Keltner Top (in blue) which historically has shown strong reversals. I sent out an email notification I was going to buy back in at $24.00

With 30 seconds left in the trading day I decided to double my position in XIV (VIX) and I now have two positions.

XIV (Inverse VIX) limit order filled @ $24.00
XIV (Inverse VIX) market order on market close filled @ $23.13

XIV 12-11-15

I now have a $40,000 position in XIV (Inverse VIX) because of what I saw in VXX (VIX) below. You will see we have closed just below the Keltner Band after an intraday break and I’ve marked historically that every time this occurs there is a good move down the next day.

VXX 12-11-15

Current Holdings with Open Orders for 12/14/15



Sell Position 1 XIV (Inverse VIX) limit @ $25.00 (4.17% Profit)
Sell Position 1 XIV (Inverse VIX) stop limit @ $22.00 (8.33% Loss)

Sell Position 2 XIV (Inverse VIX) limit @ $25.00 (8.08% Profit)
Sell Position 2 XIV (Inverse VIX) stop limit @ $22.00 (4.89% Loss)

XIV 12-11-15

New Open Orders for 12/14/15


Buy SPXU (Inverse S&P 500) Limit @ $32.60
Sell SPXU (Inverse S&P 500) Limit @ $34.00 (4.29% Profit)

SPXL (S&P 500) had a beautiful opening gap down on heavy volume breaking out of it’s triangle consolidation and also breaking it’s previous low of $80.40 where the triangle started. Volatility is picking up enormously so I’m asking for a discount instead of a stop entry order for Monday.

Chart of SPXL (S&P 500) on Friday

SPXL 12-11-15

My order for Monday in SPXU (Inverse S&P 500)

SPXU 12-11-15