1/5/15 – Trading Strategy
12/22/14 – BZQ (Inverse Brazil) @ $81.50
No new fills today.
– BRZU (Leveraged Brazil) dropped 9.42% causing my position in BZQ (Leveraged Inverse Brazil) to rise 6.89% today, almost 2x it’s average daily trading percentage. Looking at the chart of BZQ, we could easily test the previous high of $103.55 it hit on Dec 16th. Also, BZQ has a history of riding the top of a Keltner Band, so I can use more items on the B12 Trade Confidence Scale to determine my exit. I think shooting for a 25% profit target on this one could be prudent.
Remember, stocks fall much faster than they go up, since BZQ is an inverse ETF, the faster BRZU falls, the faster BZQ will rise.
– EPV (Inverse Europe) didn’t fill at $62.55 as the low for the day was only $62.99. I’m afraid it is starting to get away from me, but I’m not going any higher than $62.55 as we are already about 6.5% away from the pivot point on Dec 26.
– GOLD Still waiting on gold to show some direction. It made a good attempt to drop further, but ended up higher on the day. This is where people lose money. Waiting for some clear direction before I make another move.
Current Holdings with Open Orders for 1/5/15
Sell BZQ (Inverse Brazil) Limit @ $95.60
Sell BZQ (Inverse Brazil) Stop @ $84.30
– BRZU made a very large move downward which is now showing life in BZQ. I’ve upped my stop loss to 1x the 7-DAY ATR. If we are in a new uptrend, there is no reason it should drop this low, if it does, we’re still going to lock in profits. At this point, it’s time to hang on and see how far we can take this. We are a 4 out of 4 on the B12 Trade Confidence scale on this trade. My sell target daily is going to be 2.5x the daily ATR until we near a 20-25% profit in the position. I’ve missed some very large movements in Brazil, and I’m wanting to stretch this one a bit higher than before.
Also, with Brazil’s Central Bank announcing as of 2015 they are cutting their currency intervention in half (http://www.bloomberg.com/news/2015-01-02/brazil-s-real-leads-major-currency-drops-as-intervention-eased.html) and their self admitted acknowledgement that it will have short term repercussions, means we should expect Brazil to take some big drops next week and push BZQ to possibly new highs.
Open Orders for 1/5/15
BUY DRN (Leveraged Real Estate) @ $80.80
– After being stopped out for a small profit on Real Estate this week, it’s back up in it’s upward trend. Trying to get in again at a 50% discount to it’s daily 7-DAY ATR of $3.00.
BUY EDZ (Leveraged Inverse Emerging Growth Markets) @ $38.30
– EDC (Leveraged Emerging Growth Markets) turned down sharp today much like Brazil. It’s only a 2 out of 4 on the B12 Trade Confidence Scale. I normally like 3, but because of it’s strong movement, it should switch very soon. However, because of that, I’m bidding at 50% it’s 7-day ATR of $1.10 so I can get a better price and protect against any downward movement against me.
Here is the chart of EDC and it’s apparent continued downward movement
Here is the chart of EDZ (Leveraged Inverse Emerging Growth Markets) and where I want to get in.
BUY JDST (Leveraged Inverse Junior Gold Miners) @ $10.50
SELL JDST (Leveraged Inverse Junior Gold Miners) @ $12.15
– This could be a good bounce play. We are testing the upper boundary of our sideways channel in JNUG. If we break through, it’s going to move up high and fast most likely. If it does, it’s going to cause JDST (Inverse Junior Gold Miners) to drop. However, the long term trend for JNUG has been down, so unless it’s a major reversal, I would expect JNUG would correct and getting into JDST at $10.50 will pay off handsomely. If it doesn’t, we will get in very cheap to protect us against any further movement in JNUG.
Here is where JNUG is testing now
Here is where I want in on JDST (Leveraged Inverse Junior Gold Miners), just below the 1 DAY 7-DAY ATR which is sitting at $3.00.
BUY RUSS (Leveraged Inverse Russia) @ $23.40
– RUSL (Leveraged Russia) appears to be consolidating in a triangle, which doesn’t usually happen when a move is over. It’s usually the last consolidation before the move continues in it’s previous direction.
With that in mind, I’m putting in a far away bid for RUSS to take advantage of this move. You’ll notice that RUSS is heavily support by the 50-day moving average in Yellow, so anything sharply below that and we’ll get out of the trade, but I’m going to try and get in cheap to keep my potential loss low.
Here is the triangle in RUSL.
Here is where I want in on RUSS