Monthly Archives: October 2016

10-31-16 – Intraday Update

10-31-16 – Intraday Update

SOXL (US Semi Conductors) was my bullish position and I was expecting a possible rebound today. We are seeing a “slight” uptick, but nothing to signify a reversal or a continuance of the bullish move that led me to get into the trade. I’m going to cut my losses short here and put in a sell order for 46.00. If it doesn’t fill then I will exit by market close.

I was looking for a break of yesterday’s high and we’re just not seeing that which again doesn’t look like a bullish sign of strength.

soxl-10-31-16

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ETFs to Watch 10.30.16

ETFs to Watch 10.30.16

Market volatility picks up as the US election nears. Correlation across markets continues to be rather strong so it’s difficult to find diversity amongst markets as well. Many markets are showing more bearish signs, but nothing extremely significant yet. Everyone is waiting for the Nov 8 elections and the charts show a slow sell-off with increased volatility in anticipation.

Get your wallets ready, after Nov 8th I’m expecting many of these consolidations to finally give some strong directional bias to trade from!

 

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10-31-16 – Trading Strategy

10-31-16 – Trading Strategy

What I’m In


10/18/16 – 4 VXX (VIX) Nov 18 $29 CALL @ $5.00 ($2,000 Position Size)

10/25/16 – SOXL (US Semi Conductors) @ $46.97 ($17,613 Position Size)
10/28/16 – TMV (Inverse 20+ Year Treasury Bonds) @ $19.20 ($20,102 Position Size)

What I’m Buying


 

Buy JDST (Inverse Junior Gold Miners) Limit @ $26.00 ($13,000 Position Size)
Sell JDST (Inverse Junior Gold Miners) Limit @ $34.50 32.69% or ($4,250 Profit)
Sell JDST (Inverse Junior Gold Miners) Stop Limit @ $23.00 11.54% or ($1,500 Loss)

What I’m Selling


Sell SOXL (US Semi Conductors) Limit @ $50.00 6.45% or ($1,136 Profit)
Sell SOXL (US Semi Conductors) Stop Limit @ $44.50 5.26% or ($926 Loss)

Sell TMV (Inverse 20+ Year Treasury Bonds) Limit @ $20.00 4.17% or ($837 Profit)
Sell TMV (Inverse 20+ Year Treasury Bonds) Stop Limit @ $17.70 7.81% or ($1,570 Loss)

Sell 4 VXX (VIX) Nov 18 $29 CALL @ $8.00 ($1,200 Profit)

Today’s Update


market-snapshot-10-28-16

It’s hard to see from the static snapshot as we closed out Friday, but volatility picked up intraday with a small little news announcement that the FBI will be doing additional probes on Hilary Clinton’s emails. Personally, I don’t really care what the news event was, but I want to point out that it created additional volatility in the market which helped push VXX (VIX) and the volatility in EWZ (Brazil) higher so I could exit my positions at a profit.

I will continue to play the anticipated volatility events all the way up to the election and most likely hold onto VXX through the election day as long as I’m in any bullish positions. I need to keep this hedge on as direction is still difficult to find in this market.

SOXL (US Semi Conductors) had a 4th day down after it’s gap opening breakout move and I’ll be pushing up my stop in this one since 4 down days in a row isn’t indicative of a breakout move.

Sold 6 EWZ (Brazil) Nov 18 $40 PUTs Limit @ $3.00 ($300 Profit)

My original break-even was $37.50, but because volatility also picked up, the price of the option also increased. I benefitted from an increase in volatility and a drop in price. It’s not a knockout trade, but these markets aren’t offering many high percentage returns just yet, so I’ll keep taking advantage of low volatility to buy options and high volatility to sell.

Remember, this trade started as a Keltner Top reversal, but I strategically used a put option due to the low volatility. Read more about this trade here. This was an after market/after work order that I put in which shows you don’t have to trade during the day to make successful trades.

ewz-10-28-16

Sold 2 VXX (VIX) Nov 18 $29 CALL @ $4.00 ($120 Profit)

With VXX moving above $33.15 I was able to take a little money off the table. I’ve reduced my dollar risk level again and I still have lots of time for the upcoming election and last minute news alerts to create more uncertainty in the markets to play off of.

vxx-10-28-16

Performance Update


performance-10-28-16

Performance is looking good for the month, but as long as I have open trades, anything could happen. My strategy is still to straddle the market mixing bullish and bearish trades with a slight bearish bias since new highs have been quickly reversed and direction really isn’t solid in either direction. TMV (Inverse 20+ Year Treasury Bonds) and SOXL (US Semi Conductors) should be inversely correlated so hopefully I won’t get hit all at once if the markets change direction. Holding onto 4 contracts of the VXX Nov $29 CALL because I still don’t think we’ve seen the full potential of a volatility increase that is possible with the upcoming US election Nov 8th. With the possibility of a big volatility increase if SOXL (US Semi Conductors) falls, I should have something hedge against further loss.

I’m also pushing up my stop limit order on SOXL (US Semi Conductors) because 4 down days in a row is not indicative of a bullish breakout which started the move in the first place.

If I’m not stopped out, then any increase in SOXL will actually be profits towards the portfolio even if I sell the trade at a loss.

What I’m Buying


Buy JDST (Inverse Junior Gold Miners) Limit @ $26.00 ($13,000 Position Size)
Sell JDST (Inverse Junior Gold Miners) Limit @ $34.50 32.69% or ($4,250 Profit)
Sell JDST (Inverse Junior Gold Miners) Stop Limit @ $23.00 11.54% or ($1,500 Loss)

JNUG (Junior Gold Miners) continues in its down trend on increasing volume after bouncing off the 20-day EMA in purple. I was close to getting filled on Friday, but with 3 down days, perhaps we’ll see continued intraday volatility pick up so I can get filled and ride whatever is left of this downtrend.

jnug-10-28-16

Chart of JDST (Inverse Junior Gold Miners) showing the large intraday drop that almost filled my order. I’m expecting these intraday moves to grow as volatility picks up. Because this is historically a very wild ETF, I’m not going to chase this, but I’m demanding a cheaper price to build in protection.

jdst-10-28-16

What I’m Selling


Sell SOXL (US Semi Conductors) Limit @ $50.00 6.45% or ($1,136 Profit)
Sell SOXL (US Semi Conductors) Stop Limit @ $44.50 5.26% or ($926 Loss)

4 down days in a row after entry isn’t what you like to see in what is supposed to be a breakout move. Price closed right on the 20-day EMA in purple which could provide support, but it’s also retraced the entire gap open breakout move that started this so I’m concluding this is a fake-out. I’m pushing my stop up to limit the losses, but there is always the “lucky” chance that we’ll see some recovery on Monday.

If the move isn’t very large, but it closes green, I may still close out early. Unless there is a big reversal move, then I’ll just take out whatever I can as my portfolio is profitable for the month and I see no reason in holding onto a breakout move that didn’t continue to develop.

soxl-10-28-16

Sell TMV (Inverse 20+ Year Treasury Bonds) Limit @ $20.00 4.17% or ($837 Profit)
Sell TMV (Inverse 20+ Year Treasury Bonds) Stop Limit @ $17.70 7.81% or ($1,570 Loss)

Price is accelerating to the downside, but very little movement on Friday doesn’t leave much  for interpretation. My sell orders were determined on entry and with the gap lower I paid a higher price. Now to see if we continue the move lower on Monday.

tmf-10-28-16

Orders and chart of TMV (Inverse 20+ Year Treasury Bonds) for Monday

tmv-10-28-16

Sell 4 VXX (VIX) Nov 18 $29 CALL @ $8.00 ($1,200 Profit)

More surprise news events bodes very well for more volatility in the US markets. The more press the FBI investigation gets this week the better this could be for VXX. This is also a good hedge against SOXL (US Semi Conductors) if it continues to go down, VXX most likely will rise as well.

vxx-10-28-16

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