Posts Tagged ‘Trading Strategies’

TGIF – Can We Stop The Week Before Our Indexes Fail?

Look at the Russell!  

Look at the Nasdaq!  Are you seriously still holding onto your Dow, S&P and NYSE stocks?  That's exactly what people did in 2008, when they were so used to the markets being saved whenever they dipped, that they ignored all the warning signs – until it was too late.  

I know that I've been sounding like a broken record and you can call me Chicken Little but cut me a little slack as we are protecting profits here.  

We have 5 virtual porfolios we track for our Members and the $100,000 Butterfly Portfolio is up 19.4% ($19,000), the $500,000 Long-Term Portfolio is up 9.6% ($48,000), the $100,000 Portfolio is down 5.8% ($5,800), the $500,000 Income Portfolio is up 6.4% ($32,000) and our $25,000 Portfolio is up 15.4% ($3,850).  Overall, that's a gain of 8.8% on $1.225M deployed in 4 months.  

SPY 5 MINUTEThe Short-Term Portfolio is a hedge to the Long-Term Portfolio, so we haven't cashed those in but the Income Portfolio doesn't have an external hedge, so we moved to cash on that one last month (BEFORE the Nas and Rut started crashing off decade highs) and the Butterfly Portfolio is self-hedging while the $25KP has just one position left.  

Perhaps I'm wrong and the Nasdaq and the Russell will recover and the other indexes will all move up to new highs.  Even if they do, our worst case is we miss a bit of a rally.  If we're breaking out to new all-time highs from here – there will be plenty of money to be made.  BUT – if I'm right and the market drops 5-10%, then our taking 110% off the table at the top means that when we buy stocks again at 90%, we are buying 120% of what we could have bought had we not wisely cashed out in the rally.  

NDX WEEKLYThe REWARD for being cautious is owning 20% more shares if we're right, owning maybe 2.5% less shares if we're wrong or owning the same amount if the market stays flat.  It doesn't take a degree in statistical analysis to see why I
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Sector Detector: InfoTech Holds Lock on Top Ranking

Sector Detector: InfoTech Holds Lock on Top Ranking

By Scott Martindale, Senior Managing Director, Sabrient

Norway, Hallingdal,  Aal, Kulufossen, waterfall, long exposure

The stock market is searching for direction, testing support and resistance levels each week. After threatening a waterfall decline last week, it instead found support and has rallied strongly. Today, the S&P 500 and Dow Jones Industrials joined the Nasdaq 100 and Russell 2000 by rising above the important 200-day moving average. However, they all remain below their 50-day moving averages.

I like to define trends in simple terms. So, when a stock or index is above both its 50-day and 200-day moving averages, I consider it to be in a bullish trend. Likewise, when below both its 50 and 200-day, I consider it to be in a bearish trend. When it is between the two, the market is searching for direction. Recapturing the 200-day was important for fighting off what appeared to be the start of a new bear trend. It shows that there is some buyer support for this market.

Market volatility represented by the VIX has settled back to around 25, which is right at its 50-day moving average and still well above its 200-day moving average. Keep in mind that the VIX tends to move opposite the market, so finding support is typically bearish for the market. We should know soon how this is going to play out.

The SectorCast-ETF model employs a fundamentals-based multi-factor approach including forward valuation, earnings growth prospects, recent analyst consensus sentiment, and various return ratios. Like the technical picture, current quant rankings reflect an uncertain outlook.

Latest rankings: Information Technology (IYW) continues its lock on the top ranking with a score of 71, but this Financials (XLF) has taken back the second spot after falling into a tie last week with Healthcare (XLV). Overall, sector scores are quite similar to last week despite the big market rally from the edge of the abyss.

Notably, Consumer Discretionary (XLY) and Materials (XLB) have both weakened somewhat this week. Also worth mentioning is that Energy (XLE) and Materials (XLB) were the only sectors to get hit with more analysts reducing earnings estimates rather than increasing.

IYW fares the best in the percentage of analysts increasing earnings estimates, and it ranks high in return on…
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Trend Following Tutorial

Trend Following Tutorial

Courtesy of Allan 

In its simplest incarnation, this is Trend Following:

 
 

The SHORT on this SPX Weekly chart was generated at the end of the week of Jun 16, 2008 @ 1317.  It was in force until the end of March, 2009 @ 843.  That trade gained 474 SPX points, or about 36%.  It could have been implemented using an unleveraged index, SPY, for about a 36% gain.  It could also have been implemented using a leveraged ETF for approximately double, or triple that return.  The key focus for this tutorial is that the methodology was SHORT during a severe and prolonged market decline.  

The next signal was a LONG signal, as shown on the chart below:

 
 

This LONG signal was generated at the end of March, 2009 @ 843.  It was EXITED at the end of January, 2010 @ 1074.  The gain on this LONG was 231 SPX points, or about 27%.  

These two signal totaled over 700 SPX points over the course of about two years.  Such are the market times we are in and unless and until these volatile swings come to an end, this is a simple, mechanical, tradable way to participate successfully in these trends.

The trend line you see on the above charts is based on what is called an Average True Range algorithm.  It was written up in the June, 2009 issue of Technical Analysis of Stocks & Commodities.  The algorithm I use for these trends is slightly different then the algorithm written up in the article, not that mine is better, but I think it is more tradable.  

Daily Charts

The same algorithm works on Daily charts.  Below are some examples using the same trend model on the SPX Daily chart:

 

Notice how the Daily Trend Model works in the exact same way as the Weekly Trend Model.  In this case, a LONG signal in early November lasted through late January and gained about 30 SPX points.  Below, the ensuing SHORT signal in late January:

Following the late November, 2009 BUY, the daily trend reversed SHORT in late January, 2009.  Below, the late February LONG signal:

By now this looks the proverbial greatest thing since sliced bread.

Not so fast……looks what happens next: 

The SHORT_EXIT(LONG)_SHORT series of signals in late April is


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Fat Finger Friday – Business as Usual, Really

Wow, we are sinking to new levels of idiocy now.

The MSM would have you believe that the tremendous sell-off in the markets was just a trading error.  If it was a trading error, then these markets SUCK!  Are you telling me we put TRILLIONS of dollars, including our retirement savings into a system that can be completely thrown into chaos because a single guy hits the wrong button on a single transaction?  It's a good thing Faisal Shahzad isn't still working on Wall Street anymore, or he could have just pushed a button and caused a lot more damage that way than he did with a faulty car bomb

This is financial terrorism folks, retail traders were stopped out and margined out while the pros made Billions picking up the pieces.  Don't worry though, if you are rich enough and connected enough, the Nasdaq will reverse your losses but if they really wanted to make ammend, they would cancel the day's trading for ALL traders.  My Members don't care, we were, of course, in cash and generally short on our fun plays so we made out like bandits or, should I say, like banksters!  Heck we even used our cash to do some bottom fishing in that ridiculous sell-off.   

This market didn't just sell off because of a trading mistake.  Whatever really happened, it happened because there were no real buyers when the selling came – something I have been warning would happen during the last 3 months of low-volume run-ups.  I keep using the house of cards/Jenga metaphore and that's exactly what we have so be very careful when the same idiots who have been telling you BUYBUYBUY are now telling you to "come back in – the water's fine."   We all know how that advice worked out in Jaws

I'm certainly NOT saying not to buy now.  We dumped our short yesterday as I told member Members during Chat to take the ridiculous money we were getting for the day and run:

  • 2:17: Well you can assume today is a very nice move down and get out now.  Tomorrow, even if jobs are bad and we head lower, then you can still flip to a June spread.  Don’t foget that VIX keeps climbing as we head lower.   Also, don’t forget how nice it is to be in cash and


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Phil's Favorites

Powell Spews Baby Poop In Attempt To Reassure Investors

 

Powell Spews Baby Poop In Attempt To Reassure Investors

Courtesy of  

Let’s look at a few of Chairman Pow’s words at yesterday’s press conference. Please read them and tell me whether this sounds to you like a man who doesn’t understand what he’s doing. Or if you think he’s deliberately pulling words out of his ass, stringing them together, and spewing them from his mouth in an effort to gaslight the investing public.

I’ll take the latter. The Fed is in the propaganda business. It knows what it is doing. Double talk, lies, and utter bullshit are its stock-...



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Lee's Free Thinking

Powell Spews Baby Poop In Attempt To Reassure Investors

 

Powell Spews Baby Poop In Attempt To Reassure Investors

Courtesy of  

Let’s look at a few of Chairman Pow’s words at yesterday’s press conference. Please read them and tell me whether this sounds to you like a man who doesn’t understand what he’s doing. Or if you think he’s deliberately pulling words out of his ass, stringing them together, and spewing them from his mouth in an effort to gaslight the investing public.

I’ll take the latter. The Fed is in the propaganda business. It knows what it is doing. Double talk, lies, and utter bullshit are its stock-...



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Zero Hedge

Visualizing The World's Stock Market's Performance For The Past 30 Years

Courtesy of Jeff Desjardins, Visual Capitalist

Charting the World’s Major Stock Markets

Most investors around the world are familiar with the S&P 500 index.

Not only is it the most widely accepted barometer of U.S. stock market performance, but it’s also been on a 10-year bull run, now sitting at all-time highs near 3,170.

This week, we chart those historical returns, and then use the U.S. benchmark as a backdrop to compare other major stock markets around the world, such as those in Europe, Asia, and Canada.

Putting Them All at Scale

One challenge in comparing global markets directly is that all indices are on arbitrary scales. ...



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Chart School

Funds are getting ready to move out of USA

Courtesy of Read the Ticker

Just before the hang over in the US equity markets, money will move and take their well earned gains else where. Here is why.

More from RTT Tv







Charts in video.

US is in the late cycle boom.

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US stock market with the US dollar, they have risen together from 2012. A change of this will force money to move.


Cli...



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Kimble Charting Solutions

Euro Breakout In Play? Gold Bulls Sure Hope So!

Courtesy of Chris Kimble

The Euro has spent much of the past 2 years trading in a down-trend.

Though precious metals like Gold have fared well, this has been a bit of a headwind because it means that the US Dollar has remained firm.

Big Test In Play for the Euro

The Euro is testing a confluence of important support just as the downtrend is narrowing and ready for a “break”. That support includes lower falling wedge support and the Euro’s long term up-trend support line (see points 1 and 2).

If the Euro can succeed in breaking out at (3), it would be bullis...



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Insider Scoop

8 Healthcare Stocks Moving In Friday's Pre-Market Session

Courtesy of Benzinga

Gainers
  • Sarepta Therapeutics, Inc. (NASDAQ: SRPT) stock surged 36.4% to $137.00 during Friday's pre-market session. The market value of their outstanding shares is at $6.1 billion. The most recent rating by Janney Capital, on December 13, is at Buy, with a price target of $175.00.
  • GlaxoSmithKline, Inc. (NYSE: GSK) shares surged 1.1% to $46.44. The market value of their outstanding shares is at $112.9 billion. According to the most recent rating by UBS, on November 21, the current rating is at Buy.
  • AstraZeneca, Inc. (NYSE: ...


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Digital Currencies

Three Men Arrested In NJ For Running Alleged $722 Million Crypto Ponzi Scheme

Courtesy of ZeroHedge View original post here.

Authored by Kollen Post via CoinTelegraph.com,

United States authorities in New Jersey have announced the arrest of three men who are accused of defrauding investors of over $722 million as part of alleged crypto ponzie scheme BitClub Network, per a Dec. 10 announcement from the Dep...



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Members' Corner

Tobin Smith: Foxocracy, the 2020 Election, and the Stock Market

 

For decades, Fox News has been spreading false information and hooking its audience into an angry, xenophobic and paranoid worldview. It's no mystery that Fox was instrumental in the 2016 election -- but how did it do it? How did it gain so much influence? Tobin Smith, CEO of Transformity Research, Inc. and former Fox News contributor and talk show host, explores this phenomenon and discusses Fox News’ emotionally predatory and partisan propaganda media strategies and tactics in his new book, ...



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The Technical Traders

VIX Warns Of Imminent Market Correction

Courtesy of Technical Traders

The VIX is warning that a market peak may be setting up in the global markets and that investors should be cautious of the extremely low price in the VIX. These extremely low prices in the VIX are typically followed by some type of increased volatility in the markets.

The US Federal Reserve continues to push an easy money policy and has recently begun acquiring more dept allowing a deeper move towards a Quantitative Easing stance. This move, along with investor confidence in the US markets, has prompted early warning signs that the market has reached near extreme levels/peaks. 

Vix Value Drops Before Monthly Expiration

When the VIX falls to levels below 12~13, this typically v...



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Biotech

Why telling people with diabetes to use Walmart insulin can be dangerous advice

Reminder: We are available to chat with Members, comments are found below each post.

 

Why telling people with diabetes to use Walmart insulin can be dangerous advice

A vial of insulin. Prices for the drug, crucial for those with diabetes, have soared in recent years. Oleksandr Nagaiets/Shutterstock.com

Courtesy of Jeffrey Bennett, Vanderbilt University

About 7.4 million people ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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