Monthly Archives: July 2016

ETFs to Watch – 7.29.16

ETFs to Watch – 7.29.16

The US Market continues to make new record highs, but these haven’t been the kind of highs that are going to be making portfolios rich with wealth, but they are high enough to make headlines. Looking at the 12 unique markets across the globe, I’m seeing an increase in the safe havens, Gold and Bonds, which is abnormal if there is strong optimism in the equities markets.

Despite the many sideways days we’ve seen, there has still be money to be made and I make a few call outs specifically for Monday!

Check out this week’s ETFs to Watch for more!

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8-1-16 – Trading Strategy

8-1-16 – Trading Strategy

What I’m In



7/12/16 – 20 SPY (S&P 500) Aug 19 $218/$222 Vertical Call Spread @ $.93 ($1,860 Credit)
7/15/16 – 20 FXI (China) Aug 19 $36/$38 Vertical Call Spread @ $.48 ($960 Credit)

What I’m Buying


Buy UGAZ (Natural Gas) Limit @ $40.00 ($7,500 Position Size)
Sell UGAZ (Natural Gas) Limit @ $55.00 37.50% or ($2,812 Profit)
Sell UGAZ (Natural Gas) Stop Limit @ $32.00 20% or ($1,500 Loss)

(Order Cancels Order)
Buy TMF (20+ Year Treasury Bonds) Stop @ $121.00 ($13,961 Position Size)
Buy TMF (20+ Year Treasury Bonds) Limit @ $118.75 ($16,569 Position Size)

when filled

Sell TMF (20+ Year Treasury Bonds) Limit @ $130.00
Sell TMF (20+ Year Treasury Bonds) Stop Limit @ $108.00

(Order Cancels Order)
Buy DRN (Real Estate) Stop @ $118.00 ($13,615 Position Size)
Buy DRN (Real Estate) Limit @ $115.00 ($17,250 Position Size)

when filled

Sell DRN (Real Estate) Limit @ $125.00 
Sell DRN (Real Estate) Stop Limit @ $105.00 

What I’m Selling


Buy to cover 20 SPY (S&P 500) Aug 19 $218/$222 Vertical Call Spread @ $.45 ($960 Profit)

  • Buy to cover Aug 19 $218 Call
  • Sell Aug 19 $222 Call

Buy to cover 20 FXI (China) Aug 19 $36/$38 Vertical Call Spread @ $.24 ($480 Profit)

  • Buy to cover Aug 19 $36 Call
  • Sell Aug 19 $38 Call

Today’s Updates


Market Snapshot 7-29-16

Strong market correlation continues, but this time it mostly went in my favor. Today was a great opportunity to take profits off the table as I was already in a number of positions and when the markets are moving this close together, I don’t want to be on the opposite site.

Also, the three positions I sold today had already been up for 4 days in a row, so I can easily jump back in on a Monday/Tuesday correction possibly. Unless I’ve just exited right before the big blow up higher. =) Either way, I took $1,500+ off in profits today. Managing as a portfolio instead of individual trades is very important when you see these strong market correlations. The chance one individual stock will run to major highs is rather rare.

Though I don’t want to contradict myself, I had exited DWTI (Inverse Crude Oil) way too early as it ran on for another 5 days higher after my exit.

Only the short term outlook seems to be clear, longer term we’re seeing the US markets struggle to break out, but they are making new highs, just enough to make headlines. Those new highs are being met with a wall of sellers and now Gold is back on the rise which has me thinking Gold is the place to be and not the major equity markets which are rising at a much slower pace.

Now for the sold positions:

SOLD EDC (Emerging Markets) Limit @ $59.80 4.91% or ($380 Profit)

This was the first of my Friday changes to sell off. I bumped up my limit order to $59.80 and it was filled at 11:12am PST. We’ve been riding flat for so long, that this little bump, causing a 4th day higher, was good enough for me to exit and see what next week holds.

EDC 7-29-16

SOLD EWJ (Japan) Limit @ $12.06 .92% or ($184 Profit)

Nice opening gap higher today, but with the strong market correlation I was happy to take a small profit. I’m still bullish on Japan, but I had been sitting on this for weeks in the negative that I’d rather take money off the table and see if there are better places for it. I emailed earlier in the day that my limit order was set for $12.10, but as we started nearing the close I had to take it off at $12.06.

EWJ 7-29-16

SOLD JNUG (Junior Gold Miners) Limit @ $320.00 or 21.84% or ($1,616 Profit)

On my intraday email today I modified my sell price to $299.00, but we got as high as $298. I waited until the market close watching, hoping we’d get a last minute rush higher, but instead I saw it selling off so I took a market order which filled at $292.41. A very nice profit for such a short term trade.

Now PPO did turn higher today and with prices already in an existing uptrend, a confirmed bounce recovery and prices above all 3 major moving averages, this is certainly a buy. The only thing is, after 4 days up, JNUG usually won’t have a 5th, so I am going to wait for one down day and then I’m getting right back in!

I’ve been hearing from other subscribers who also made money in this trade with me, which is fantastic! What I want to point out though, is I was watching this for a couple days ahead of time, explaining under what scenario I would buy. But I wasn’t 100% rule driven, because the intraday spike after the FOMC meeting was a major clue that allowed me to get in early. So once something starts to look like it’s setting up, check in on it every now and again when you know there are expected volatility events (such as an FOMC meeting) that may give you an earlier entry.

JNUG 7-29-16

What I’m Watching


XIV (Inverse VIX) is hitting a clear $34.00 resistance level for the 3rd time now. This basically means volatility in the markets is near all time lows again. This means I am going to be looking very closely at a potential trade in UVXY (Ultra VIX) next week if we get a bounce off resistance.

XIV 7-29-16

What I’m Buying


(Order Cancels Order)
Buy TMF (20+ Year Treasury Bonds) Stop @ $121.00 ($13,961 Position Size)
Buy TMF (20+ Year Treasury Bonds) Limit @ $118.75 ($16,569 Position Size)

when filled

Sell TMF (20+ Year Treasury Bonds) Limit @ $130.00
Sell TMF (20+ Year Treasury Bonds) Stop Limit @ $108.00

My position size is based on a $1,500 stop loss, so you will see different dollar amounts depending on my fill size. As for the trade, the chart may be a bit messy, so let me detail why I’m getting in.

As you can see from previous newsletters, this was on my watch list because we had a bounce off the 50-day EMA in yellow (It’s just above the $108 stop). Prices fell back into an existing “short term” upper trend channel, in yellow. Prices are now above all 3 moving averages and today’s move caused PPO to turn positive, (the yellow dot is now at the top of the screen, indicating the PPO histogram below now has a higher day than yesterday).

The reward is greater than the risk in this trade so I’m going to do an OCO (Order Cancels Order) so I get in at a better price, or I take whatever the price is above $121. Either way, this ensures a fill with a chance for a better fill if it goes below $118.75.

All of these strategies are discussed in great detail in my Educational Series, but the purpose of this newsletter is to show how I apply what I teach, in today’s markets.

TMF 7-29-16

(Order Cancels Order)
Buy DRN (Real Estate) Stop @ $118.00 ($13,615 Position Size)
Buy DRN (Real Estate) Limit @ $115.00 ($17,250 Position Size)

when filled

Sell DRN (Real Estate) Limit @ $125.00 
Sell DRN (Real Estate) Stop Limit @ $105.00 

As I’ve been saying in earlier newsletters this week, I wanted to trade DRN again if we get a PPO turning higher. Prices have already been in an existing uptrend, we had a corrective move (albeit minor) off the 20-day EMA in purple and now PPO turned higher. I’m putting in an OCO (Order Cancels Order) order to ensure I get a fill. My stop order is based off the 20-day EMA correction with some room to move. My limit order is a 2x ATR from today’s closing price. That is easily achievable over a 5-day trading period next week especially with the existing momentum and another 3 months at least until interest rate hikes are under consideration again.

If all of these terms I’m using are foreign, you may want to consider my Educational Series in which I go step by step building all of these trade concepts and terminology. I’ve yet to have a single unsatisfied customer with the quality of training I provide.

DRN 7-29-16

Buy UGAZ (Natural Gas) Limit @ $40.00 ($7,500 Position Size)
Sell UGAZ (Natural Gas) Limit @ $55.00 37.50% or ($2,812 Profit)
Sell UGAZ (Natural Gas) Stop Limit @ $32.00 20% or ($1,500 Loss)

No pull back today in Natural Gas, but today’s close was the low for the day. I still see a nice breakout move here, but I’d like to cushion it with a discounted entry vs an OCO order since Thursday’s massive move higher feels like it needs a correction before going much higher.

UGAZ 7-29-16

What I’m Selling


Buy to cover 20 SPY (S&P 500) Aug 19 $218/$222 Vertical Call Spread @ $.45 ($960 Profit)

  • Buy to cover Aug 19 $218 Call
  • Sell Aug 19 $222 Call

The S&P hit another record high intraday, and I’m sure if I look, there will be headlines touting “S&P hits another record breaking high to close out July” if only because it rhymes.

Regardless, this is not the behavior of a massive breakout. Google and Amazon announced earnings yesterday which both did well (Disclaimer, I work for Google, and I’m quite happy to see that news) which I was suspecting might push the S&P 500 higher. I’m still going to hold on. I’ve sold enough profitable positions this past week that even if I sell this one at a loss (which it’s down over $800) I’m still going to close out July with a great profit.

This is again why I’m advocating trading your portfolio and not individual trades. It’s extremely difficult and risky to rely on one trade to make up for all the losses you could take with this market correlation. Anything this specific trade makes back is gravy and only adds to the overall profits for the month AND it’s still a losing trade! Pretty cool eh?

SPY 7-29-16

Buy to cover 20 FXI (China) Aug 19 $36/$38 Vertical Call Spread @ $.24 ($480 Profit)

  • Buy to cover Aug 19 $36 Call
  • Sell Aug 19 $38 Call

Another favorable move for me today. The position is sitting at $.31 and I’m trying to buy it back at $.24. With time decay working even more in my favor, starting off august with 19 days left my position should pick up steam unless there is a big price reversal.

FXI 7-29-16

 

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7-29-16 – Trading Strategy

7-29-16 – Trading Strategy

What I’m In



7/12/16 – EWJ (Japan) @ $11.95 ($20,070 Position Size)
7/12/16 – 20 SPY (S&P 500) Aug 19 $218/$222 Vertical Call Spread @ $.93 ($1,860 Credit)
7/15/16 – 20 FXI (China) Aug 19 $36/$38 Vertical Call Spread @ $.48 ($960 Credit)
7/19/16 – EDC (Emerging Markets) @ $57.00 ($7,752 Position Size)
7/27/16 – JNUG (Junior Gold Miners) @ $239.99 ($7,400 Position Size)

What I’m Buying


Buy UGAZ (Natural Gas) Limit @ $40.00 ($7,500 Position Size)
Sell UGAZ (Natural Gas) Limit @ $55.00 37.50% or ($2,812 Profit)
Sell UGAZ (Natural Gas) Stop Limit @ $32.00 20% or ($1,500 Loss)

What I’m Selling



Sell EWJ (Japan) Limit @ $12.15 1.67% or ($334 Profit)
Sell EWJ (Japan) Stop Limit @ $11.30 5.44% or ($1,087 Loss)

Sell EDC (Emerging Markets) Limit @ $62.50 9.65% or ($748 Profit)
Sell EDC (Emerging Markets) Stop Limit @ $46.00 19.30% or ($1,496 Loss)

Sell JNUG (Junior Gold Miners) Limit @ $320.00 or 33.33% or ($2,479 Profit)
Sell JNUG (Junior Gold Miners) Stop Limit @ $190.00 20.17% or ($1,500 Loss)

Buy to cover 20 SPY (S&P 500) Aug 19 $218/$222 Vertical Call Spread @ $.45 ($960 Profit)

  • Buy to cover Aug 19 $218 Call
  • Sell Aug 19 $222 Call

Buy to cover 20 FXI (China) Aug 19 $36/$38 Vertical Call Spread @ $.24 ($480 Profit)

  • Buy to cover Aug 19 $36 Call
  • Sell Aug 19 $38 Call

Today’s Updates


Market Snapshot 7-28-16

Rather flat day again across the markets. Good earnings in FB (Facebook) which immediately fell. GOOG (Google) announced earnings after market which caused a nice bump after hours as well as AMZN (Amazon)

Bought to cover 20 SPY (S&P 500) Aug 19 $221/$225 Vertical Call Spread @ $.30 ($740 Profit)

  • Buy to cover Aug 19 $221 Call
  • Sell Aug 19 $225 Call

This vertical spread filled today on a small intraday dip lower allowing me to make a nice $740 profit. I’m still in my $218/$222 spread which is still in the negative, but taking this off the table helps to offset it. With the positive news in GOOG and AMZN after hours, we’re sure to see an opening gap higher in the SPY (S&P 500) which may put us close to the $218 mark I’m trying to stay away from.

SPY 7-28-16-2

Sold SOXS (Inverse US Semi Conductors) Limit @ $19.73 3.84% or ($768 Profit)

The Keltner Channel held and we did get a reversal. I was hoping for more, but you can’t get greedy with the markets. 1-2 day tops is all you can expect consistently on these reversal.

SOXL 7-28-16

Chart of my final order for SOXS (Inverse US Semi Conductors). I was able to squeeze out two days down, but I don’t want to get greedy and try to hold on any longer with profits on the table. The Keltner Channel reversal is fairly reliable, but you only get 1-2 days usually. Sometimes it goes longer, but I’m not into taking big risks when profits are available now.

SOXS 7-28-16

What I’m Watching


TMF (20+ Year Treasury Bonds) didn’t have a move up today to turn PPO positive, so I’m going to keep waiting for that final confirmation before entering.

TMF 7-28-16

UWTI (Crude Oil) continues it’s downfall, still remaining a 4/4 on the B12 Trade Confidence Scale. If you followed me into this trade (into DWTI specifically) good for you! I hope you are still reaping the rewards. We’re getting to the point in which it may be time to take off some profits, as this number of days down gets to be a rare statistical event as an FYI.

UWTI 7-28-16

What I’m Buying


Buy UGAZ (Natural Gas) Limit @ $40.00 ($7,500 Position Size)
Sell UGAZ (Natural Gas) Limit @ $55.00 37.50% or ($2,812 Profit)
Sell UGAZ (Natural Gas) Stop Limit @ $32.00 20% or ($1,500 Loss)

Hard to ignore the massive upside move in UGAZ today. Price is back in it’s existing upper trend channel. PPO turned higher and price is above all it’s 3 major moving averages. However, most of the moving averages have consolidated, so for me it’s more about the resumption of the existing trend higher. I am only getting in on a pullback which is why I’ve put in a limit order for $40.00.

UGAZ 7-28-16

What I’m Selling


Sell EWJ (Japan) Limit @ $12.15 1.67% or ($334 Profit)
Sell EWJ (Japan) Stop Limit @ $11.30 5.44% or ($1,087 Loss)

Even though it shows 3 green days in a row, you can see each day we’re putting in lower lows. I’m about to simply pull out of this position to free up the funds elsewhere. I don’t have a good feeling on where this is going. Especially since now I’m in all bullish positions, so if the markets go bearish, only my options trades will benefit.

EWJ 7-28-16

Sell EDC (Emerging Markets) Limit @ $62.50 9.65% or ($748 Profit)
Sell EDC (Emerging Markets) Stop Limit @ $46.00 19.30% or ($1,496 Loss)

EDC 7-28-16

Sell JNUG (Junior Gold Miners) Limit @ $320.00 or 33.33% or ($2,479 Profit)
Sell JNUG (Junior Gold Miners) Stop Limit @ $190.00 20.17% or ($1,500 Loss)

This is my biggest potential trade right now. If I’m more patient with this trade I may be able to pull off a big win. But as usual, I’m trying to manage to my portfolio offsetting losses if they occur, but I’m liking the continued momentum here.

JNUG 7-28-16

Buy to cover 20 SPY (S&P 500) Aug 19 $218/$222 Vertical Call Spread @ $.45 ($960 Profit)

  • Buy to cover Aug 19 $218 Call
  • Sell Aug 19 $222 Call

The up/down/up/down continues still. The intraday movements are increasing though, but I’m okay as long as we stay under $218.

SPY 7-28-16-1

Buy to cover 20 FXI (China) Aug 19 $36/$38 Vertical Call Spread @ $.24 ($480 Profit)

  • Buy to cover Aug 19 $36 Call
  • Sell Aug 19 $38 Call

Finally, two down days in a row. Keeping my same profit target as I’m up currently $180 in this trade, so another $300 profit tomorrow and I’d certainly take it. The markets aren’t giving much movement to profit from.

FXI 7-28-16

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