2-12-15 – Trading Strategy

2-12-15 – Trading Strategy

Current Holdings


Real time portfolio updates are now available here

– No current holdings

Today’s Updates


 

DGAZ (Inverse Natural Gas) Stopped out @ $7.75 for a 17.65% loss

– Today was a bitter surprise. Only being down 2% yesterday with a conservative stop loss was no match for the enormous 15% moring gap down! I was highlighting the fact UGAZ never had more than 3 up days since November, well it broke that today.

As a trader who holds positions overnight, there is simply no protection against this. It’s a coin flip as it could have easily gapped up and I would have been on the winning side. I’ve certainly been the beneficiary of this in the past. It’s a statistical game, and every now and then we get pinched by an anomaly.

I’m still up for the month and assessing the situation, there isn’t really anything that could have been done differently as the overall trend was down and we just had a bad move against the position. This could mean that UGAZ (Natural Gas) could be reversing and that will provide more than enough movement to make up for today’s loss and then some. Unfortunately, one day doesn’t signal a complete reversal, so I have to wait until the direction becomes more clear.

Brazil gapped lower today and flew far past my buy point in BZQ.

Russia teased our buy point missing by a couple percentage points of a buy as well as Semi conductors.

Stocks on the Watch


Longer Term (30+ day) Trade alert!

UGAZ (Natural Gas) has made a move that has certainly caught my eye (and no.. it wasn’t just the big gut check loss =) but it’s done something I look for in longer term trades, it’s just started what I call an “Extreme PPO Turnover

PPO (Price Percent Oscillator) measures the distances between two major moving averages. In this case, I have it configured to measure the percentage distance between the 20-day and 50-day moving averages. I use the percentage difference because I can easily apply that to all of the markets I watch to find out historically what is actually and “extreme”

Right now, UGAZ is changing direction from a WHOPPING 41.21% difference in moving averages. The only other stock currently matching this extreme is GASL (Natural Gas Companies).

The only other two markets that have reached this extreme have been RUSL (Russia) and JNUG (Junior Gold Miners)

If you look at JNUG and got in when PPO turned and held it, you could have been up as high as 110%!!

JNUG 2-11-15

If the volatility is too much to bear, you could have done the same with GDXJ (Non Leveraged Junior Gold Miners) but that same movement was only 26%

GDXJ 2-11-15

 

Now this is not foolproof. RUSL (Russia) also had an extreme PPO turn over, but instead of trending, it move upward and then into a sideways consolidation. Because PPO is measuring the distance between two moving averages, the averages can flatten out or “appear” to be changing direction when prices move sideways. So you can’t look at the indicator solely, but the actual price action.

RUSL 2-11-15

 

If we look at UGAZ (Natural Gas), PPO is reversing because price is changing direction, and FAST! The possible upside could easily be 100%+ if one has the stomach to hold for any potential volatility. Also, it could just simply move sideways like RUSL (Russia).

If you want to start investing in Natural Gas, but don’t want the exposure the leveraged ETF, UGAZ, provides, look at investing in UNG (Non leveraged Natural Gas) as an alternative.

UGAZ 2-11-15 PPO

Open orders for 2/12/15


 

Buy BZQ (Inverse Brazil) @ $91.15
Sell BZQ (Inverse Brazil) @ $96.15

Brazil is showing a clear breakout to the downside which is why I’ve been trying to get in to BZQ. Pushing up my buy order to where I wanted to sell today.

BRZU 2-11-15

Updated Buy/Sell areas for BZQ (Inverse Brazil)

BZQ 2-11-15

 

Buy RUSS (Inverse Russia) @ $13.35
Sell RUSS (Inverse Russia) @ $14.70

– Keeping the same buy/sell order for Inverse Russia as yesterday. It’s starting to slow down in momentum as it’s flirting with it’s price resistance line.

RUSS 2-11-15

Buy SOXS (Inverse US Semi Conductors) Limit @ $12.15
Sell SOXS (Inverse US Semi Conductors) Limit @ $13.30

SOXL (Semi Conductors) is slowing down quickly as it’s unable to break resistance. I’m increasing my sell order as this could easy drop quickly if resistance holds and increase potential earnings in SOXS (Inverse Semi Conductors).

SOXL 2-11-15

Updated Buy/Sell points for SOXS

SOXS 2-11-15

 

Buy DGLD (Inverse Gold) @ $68.00
Sell DGLD (Inverse Gold) @ $71.75

– I’m still bearish on gold. Trying to find a good position to get in after it gapped away from my original buy point last Friday.

  • Price is below all 3 major moving averages
  • Price has broken out of our intermediate term uptrend
  • Price remains solid within our long term down trend lines
  • PPO has been negative over over a week now

All indications gold will continue to go down. Depending on your trade personality, you may already be in, you may just put in a market order and ride out the volatility, or you can try like me and get the cheaper buy points.

UGLD 2-11-15

My Buy/Sell points for DGLD (Inverse Gold)

DGLD 2-11-15

 

2-11-15 – Trading Strategy

2-11-15 – Trading Strategy

Current Holdings


Real time portfolio updates are now available here

2/10/15 – DGAZ (Inverse Natural Gas) @ $8.16

Today’s Updates


 

GASL (Natural Gas Companies) filled @ $3.60 and sold @ $3.80 for a 5.56% gain.

– Some more desirable market action today. A nice unattended day trade for GASL and a good end of day recovery for my position in DGAZ.

US Markets saw a very nice boost today, but are near potential resistance levels so another day or so on that before I play in those markets. The strategy for this week is to play for the short 5-10% gains if I can get them.

Stocks on the Watch


 

DRN (Real Estate)

– Possible rebound in DRN (Real Estate) as it’s hit it’s bottom upward trend line. Dropped low with an end of day recovery which is a bullish sign. It’s also a bullish Doji if you follow candle stick patterns, I prefer OHLC because it reads easier from left to right.

I’m waiting to see if we get a bounce of the 50-day in yellow.

DRN 2-10-15

 

EDC (Emerging Markets)

– Which will prevail? The short term downward correction or the more intermediate upward price movement? Many traders like to try and pick a bottom at this point, but I don’t want to trade against the upward trend in this case. Sure there is a lot of news coming out of Europe especially with the uncertainty of Greece jumping from the Euro (in which Italy and some others may follow). Going to play patient on this, because anything could happen.

Why bet on if it’s going to rain, when you can bet that it will continue raining after it starts? That’s what a couple of days can do for you if you are patient with your trades.

EDC 2-10-15

EURL (Europe)

– Europe has a similar chart as EDC but holds exclusively European stocks vs EDC which includes some Asia and other smaller countries in it’s portfolio. Waiting here for a break above the 100-day EMA in Orange, or a strong break out of it’s short term uptrend. Long trend is down, and I’m just waiting for it to resume it’s downward direction. I’ll jump into EPV if Europe falls out of line.

EURL 2-10-15

TMF (20+ Year Treasury Bonds)

– TMF is finally making a healthy correction and is a sharp downfall. It’s testing the 50-day EMA right now, so it may bounce or move further down. It’s also near it’s long term upward trend lines. A few more days to see if it penetrates and finds support is necessary before I can play this back to the upside.

TMF 2-10-15

US Markets (SOXL – US Semi Conductors & SPXL – S&P 500)

SOXL is flirting with the top of it’s trend line today, and the SPXL broke out of it’s triangle, but as I’ve mentioned frequently, triangles turn into sideways trading ranges and today it reached the top level resistance line for the last few weeks.

SPXL 2-10-15

SOXL 2-10-15

Current Holdings with Open Orders for 2/11/15


Sell DGAZ (Inverse Natural Gas) Limit @ $9.05
Sell DGAZ (Inverse Natural Gas) Stop @ $7.75

– The last time DGAZ was down for 3 days in a row was back in Nov of 2014. We are on day two with a strong end of day finish. I’m putting my stop in to limit me to a max of 5% stop loss. If you are willing to take on more risk for upside potential, a reasonable stop based on the daily trading range would be at $7.10.

DGAZ 2-10-15

Open orders for 2/11/15


Buy BZQ (Inverse Brazil) @ $86.80
Sell BZQ (Inverse Brazil) @ $91.15

– Brazil broke through another short term support level and continues it’s choppy, but downward price movement. I’m putting in a bid for a quick rebound tomorrow and further downside movement by playing BZQ.

BRZU 2-10-15

My buy and sell points on BZQ.

BZQ 2-10-15

 

Buy RUSS (Inverse Russia) @ $13.35
Sell RUSS (Inverse Russia) @ $14.70

RUSL (Russia) is flirting with the top of it’s point of resistance and is on it’s fourth up day in a row. This is a nice swing setup to the downside. I’m expecting it to spike higher in the morning and then drop lower, ideally. However, because my order didn’t fill today for RUSS, I have to lower my buy point. RUSS has a daily ATR of 15.74%, so I have to get in after a 10-12% drop in order to protect myself.

RUSL could easily break out of this sideways consolidation and take off in a final reversal pattern to it’s almost 2 year downtrend. It’s unlikely, but I don’t want to be on the wrong end if it does.

Here is the chart of Russia and it’s resistance levels.

RUSL 2-10-15

Here are my buy and sell points for RUSS (Inverse Russia)

RUSS 2-10-15

Buy SOXS (Inverse US Semi Conductors) Limit @ $12.15
Sell SOXS (Inverse US Semi Conductors) Limit @ $12.75

– US Semi Conductors, along with the US Market has shown some very choppy and volatile days. During these kinds of markets, what I look for is a price movement that far exceeds it’s daily trading range and when prices near fixed support levels. We are seeing that in SOXL (US Semi Conductors). It’s daily trading range is 5.21% and it closed up twice that at 10.13%. This is the kind of move that attracts buyers and the sellers who already own it, will be more than happy to feed it to them tomorrow and walk off with a health return in a short period of time.

To take advantage of this possible scenario tomorrow, I am going to play SOXL to the downside by purchasing SOXS (Inverse US Semi Conductors). It’s daily trading range is .82 cents, so I am buying just shy above that from today’s close of $12.93.

Because it’s daily trading range is 6.33%, I’m going for a 5% profit on this trade like I did with GASL (Natural Gas Companies).

SOXL 2-10-15

My Buy and Sell points on SOXS (Inverse US Semi Conductors)

SOXS 2-10-15

2-10-15 – Trading Strategy

2-10-15 – Trading Strategy

Current Holdings


Real time portfolio updates are now available here

(No Current Holdings)

Today’s Updates


 

DGAZ (Inverse Natural Gas) stopped out today @ $8.78 for a 14.77% gain
INDL (India) stopped out today @ 93.41 for a 8.33% loss

– Both DGAZ and INDL gapped lower on the open causing my stops to be triggered. Looks like it was for the better as both closed even lower for the day. I’d like to highlight the importance of profit targets, I was up 22% on DGAZ on Friday, which was almost $1,400 additional profit given up this morning. Holding out for the bigger gains means you take a chance at a loss of profit like the one suffered this morning.

However, we’re still showing solid profits for this month with only one losing trade so far.

Overall the markets were rather shallow in their movements reflecting more sideways activity and uncertainty. This is still a market more ripe for volatility trades than trend breakouts.

 

** For Buy and Sell areas on the chart, I’m going to use the colored lines. I hope everyone finds this a bit more legible than the random “circles” which aren’t as specific.

RED Line = Stop Limit
YELLOW Line = Buy Limit
GREEN Line = Sell Limit

market snapshot 2-9-15

Current Holdings with Open Orders for 2/10/15


– No current holdings, so no open orders on existing positions.

Open orders for 2/10/15


Buy GASL (Natural Gas Companies) @ $3.60
Sell GASL (Natural Gas Companies) @ $3.80

– Very little movement in GASL today. I will resubmit today’s order again for tomorrow. It tried to go higher during the day but fell by market close. We could still see that bounce lower for continued upward momentum. I have to get into this cheap so I can put in a very tight stop loss.

GASL 2-9-15

Buy DGLD (Inverse Gold) @ $63.75
Sell DGLD (Inverse Gold) @ $67.55

– More sideways movement in Gold, short term is still down so I’m going to trade for it to go down. Same order for tomorrow as for today.

Buy UVXY (VIX Short-Term Futures) @ $25.00
Sell UVXY (VIX Short-Term Future) @ $26.50

– Same order again from today for tomorrow. Only a 1.26% change today when it’s daily trading range is 12%.

Buy RUSS (Inverse Russia) @ $14.30
Sell RUSS (Inverse Russia) @ $16.45

– Going for the same trade setup again. RUSS fell 3% today, but not low enough to hit my buy point.

Buy DGAZ (Inverse Natural Gas) @ $8.20
Sell DGAZ (Inverse Natural Gas) @ $9.05

– Trying to get back in on another dip in DGAZ. Bidding 75% of the daily trading range which is .74 cents.

DGAZ 2-9-15

 

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