ETFs to Watch 1.3.16

ETF’s to Watch 1.3.16

3D render illustration - Year 2015 changes to 2016

Welcome to 2016! The S&P Closed lower for the year along with many other global markets.  We’ve had many prosperous years, but will this be the year of the correction? There will be many long term forecasters, but here is what I’m looking at for next week.

BRZU (Brazil) – Bearish

Long term and intermediate downward trends in Brazil. We are now at a short term support level of $11.50. If we gap below $11.50 on Monday then I would suspect this will continue much lower.

BRZU 12-31-15

DRN (Real Estate) – Bullish

$65.50 is a good support level and we are still holding nicely in a short term uptrend. We need to hold above $75.00 (the previous high) in my opinion for this bullish trend to continue though.

DRN 12-31-15

EDC (Emerging Markets) – Bearish

EDC has been trending down for almost 3 months now. We are in a small consolidation which could fall apart easily next week. A gap open below $11.50 will be the continuation of the existing down trend. A bounce off $11.50 could easily move into a sideways consolidation.

EDC 12-31-15

EWJ (Japan) – Consolidation

EWJ was in a downtrend, but now it’s chopping around wildly. The best I can see on the charts now is a triangle consolidation. Watching for a strong break out in one direction or the other at this point. Volatility is just wild as you can see the daily price fluctuations are wider than they have been in a long while. I will be sitting on the sidelines when it comes to this market.

EWJ 12-31-15

GASL (Natural Gas Companies) – Bearish

After a small recovery from $5.00 we could now be moving into a small consolidation before continued downward movement. Confirmation will come only when this can break the $5.00 support level.

GASL 12-31-15

JNUG (Junior Gold Miners) – Sideways

I’ve opened up the price channel range to $35 – $29 now. There is not much going on in this market so I’m just waiting until we see a breakout to one side or the other. When it does break out, it could be big considering the length of time this sideways movement has gone.

JNUG 12-31-15

RUSL (Russia) – Consolidation

The expanding triangle is breaking down in Russia and we’re not seeing a strong rebound off the lower trend line. Price volatility is increasing but it’s doing so in a sideways trading range. Nothing much to do here but wait and watch.

RUSL 12-31-15

SOXL (US Semi Conductors) – Sideways

Heading into 2016 continuing the 3 month sideways movement. Waiting for a bullish break above $30 or a bearish break below $25.

SOXL 12-31-15

SPXL (S&P 500) – Bearish

Lower highs and lower lows. This is a clear downward trend channel. Finishing off 2015 doesn’t bode well for the S&P going forward. It’s a big psychological factor that I think will easily creep into 2016.

SPXL 12-31-15

TMF (20+ Year Treasury Bonds) – Sideways

Recent price action in bonds has just gone wild. Very large intraday swings and little solid direction. There was a slight upward bias, but I’m putting more weight in the sideways channel of $82 – $70. It’s a wide range, but I’ll be looking for a tradable trend outside of these price ranges before diving into this mess.

TMF 12-31-15

UGAZ (Natural Gas) – Undecided

We’ve seen some very strong price action off of a $1.30 price level to close out 2015. The volume has been substantial and we’ve broken out of our intermediate downward trend channel. This may be the sign of a new bullish trend and many will stake their claim on it, but I still think we need a couple more days before we can confirm. This is very enticing for bottom feeders who can get crushed by a single day of bad news. I’m going to stay put personally.

UGAZ 12-31-15


UGLD (Gold) – Bearish Consolidation

Usually Gold is the safe bet when equity markets fall. We saw the first down year in the S&P for the first time in many years, so what’s going to happen with gold? Well, I’ll tell you, speculation and volatility. Look at how wide the price bars in Gold are getting but no real direction is taking place. There is going to be a battle over gold and when the market declares a winner I’ll be jumping in. Right now I have to look at a bias to the downside since that is the multi-year trend. A break below $7.00 would be the bearish confirmation. I won’t touch this to the upside until it can fill the gap that started all this at $8.00.

UGLD 12-31-15

UWTI (Crude Oil) – Bearish

The downward trend is still holding nicely, albeit it’s a rather sharp downtrend. We’re in a tiny consolidation so I’ll watch for a break below $3.50 as the confirmation the downtrend will continue. Otherwise I would suspect at best we will see a sideways channel develop between $4.50 and $3.50.

UWTI 12-31-15

VGK (Europe) – Bearish

Defined downtrend is still holding and prices remain below all 3 major moving averages (20-50-100). It makes it hard to play this effectively to the downside unless you can get in early on a move from the upper trend line. These moves downward are very choppy and only last a couple of days before pullbacks. With the increasing volatility messier patterns could develop or sideways movements in the upcoming weeks.

VGK 12-31-15

XIV (Inverse VIX) – Bearish Consolidation

XIV was in a down trend channel, but with the increasing volatility and price swings, I’m looking more at a bearish consolidation. I think it’s going to be difficult to call these trends in the next few weeks but more wild price swings in one direction or the other. I’ll be looking for a gap open below $25.00 for confirmation of continued downward movement.

XIV 12-31-15

YINN (China) – Bearish

After a small correction to the most recent downward trend channel we are almost right back in it. Once we are below $17.00 I think we’ll have another decent run downward. Just waiting for re-entry at $17.00 to go lower.

YINN 12-31-15

1-4-15 – Trading Strategy

1-4-15 – 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

Sell Short VGK (Non Leveraged Europe) Limit @ $50.00
Buy to Cover VGK (Non Leveraged Europe) Stop Limit @ $49.10 (1.80% Loss)
Buy to Cover VGK (Non Leveraged Europe) Stop Limit @ $51.10 (2.20% Profit)

Today’s Updates

Market Snapshot 12-31-15

Here was the final snapshot of 2015. The S&P closed lower for the year along with many other US based markets. If you were watching the intraday action there were very big sell-offs in the final minutes of the year most likely by sellers getting out of their negative positions so they could file for a yearly loss on their taxes.

My position in DRN (Real Estate) didn’t fare well at the end, however I’m not too concerned since a majority of the movement was in the final minutes of the day.

We start 2016 with a new slate. I don’t think it looks good for the uS based markets, the trends will be found elsewhere. Commodities such as Natural Gas, Oil and Gold will most likely be the most fruitful.

I closed out 2016 profitable, but far from my profit goals. I made some big mistakes through out the year which I’m determined not to repeat. I am working on new techniques for better order entry during these volatile markets and I’m also looking at replacing some of the leveraged ETF’s I track permanently with the non leveraged Equivalents.

I will make a separate blog post on the ETF’s I am replacing in the B12 Trader portfolio.

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)

DRN 12-31-15

What I’m Buying

Sell Short VGK (Non Leveraged Europe) Limit @ $50.00
Buy to Cover VGK (Non Leveraged Europe) Stop Limit @ $49.10 (1.80% Loss)
Buy to Cover VGK (Non Leveraged Europe) Stop Limit @ $51.10 (2.20% Profit)

VGK? I know you haven’t seen VGK (Non Leveraged Europe) in a while or at all, but I’ve been watching EURL (Leveraged Europe) for years now and I’ve seen the volume in that ETF practically dry up. I like the larger moves that leveraged ETF’s give me, but it doesn’t make sense to trade EURL because there simply isn’t enough volume at an average of 10k shares per day. A lack of volume means the spreads are too high and getting in or out are difficult and usually costly. VGK is the non leveraged ETF for Europe and has millions of shares. It doesn’t move as much, but it still gives me exposure to Europe.

VGK 12-31-15