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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Zero Hedge

Allies Resist US Call For Anti-Iran Naval Force, Fearing It Would Worsen Tensions

Courtesy of ZeroHedge. View original post here.

Authored by Jason Ditz via AntiWar.com,

As tensions have continued to rise between the US and Iran, American officials continue to try to court allies to join a naval force to safeguard key shipping lanes off the coast of Iran. ...



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Phil's Favorites

Mauldin: The Problem With Keynesian Economics

Courtesy of John Mauldin via RealInvestmentAdvice.com

In The General Theory of Employment, Interest and Money, John Maynard Keynes wrote:

“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.”

I think Lord Keynes himself would appreciate the irony that he has become the defunct economist under whose influence the academic and bureaucratic classes now toil, slaves to what has become as much a religious belief system as an economic theory.

...



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Kimble Charting Solutions

Doc Copper Is Pushing Higher Off 18-Year Rising Support, Says Joe Friday

Courtesy of Chris Kimble.

Gold & Silver have been hot of late! Is Doc Copper about to do the same? Possible says Joe Friday.

This chart looks at Copper Futures over the past 27-years. Copper has spent the majority of that time inside of rising channel (1).

The decline over the past year has Doc Copper testing 18-year rising support and lows of the past 8-months at (2).

Joe Friday Just The Facts Ma’am- Copper is attempting to rally off of long-term support at (3). As Copper is testing the bottom of this support channel, smart money hedgers are making a bi...



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Insider Scoop

Benzinga's Top Upgrades, Downgrades For July 19, 2019

Courtesy of Benzinga.

Upgrades
  • For American International Group Inc (NYSE: AIG), William Blair upgraded the previous rating of Market Perform to the current rating Outperform. American International Gr earned $1.58 in the first quarter, compared to $1.04 in the year-ago quarter. American International Gr's market-cap stands at $48,358,299,270. At the moment, the stock has a 52-week-high of $56.49 and a 52-week-low of $36.16. American International Gr c...


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Chart School

RTT Plus Chart Book (Sneak Peak)

Courtesy of Read the Ticker.

The magic of support and resistance channel lines and how they direct price. Here are some chart disclosed to members via the RTT Plus service. All charts are a few weeks old. 


XAU bound by parallel channel lines.


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Newmont Mining support from Gann Angles.



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US Dollar index (DXY) dominate cycle ...

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Digital Currencies

Cryptos Suddenly Panic-Bid, Bitcoin Back Above $10k

Courtesy of ZeroHedge. View original post here.

Following further selling pressure overnight, someone (or more than one) has decided to buy-the-dip in cryptos this morning, sending Bitcoin (and most of the altcoins) soaring...

A sea of green...

Source: Coin360

Bitcoin surged back above $10,000...

Ethereum bounced off suppo...



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Biotech

DNA testing companies offer telomere testing - but what does it tell you about aging and disease risk?

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

 

DNA testing companies offer telomere testing – but what does it tell you about aging and disease risk?

A telomere age test kit from Telomere Diagnostics Inc. and saliva. collection kit from 23andMe. Anna Hoychuk/Shutterstock.com

Courtesy of Patricia Opresko, University of Pittsburgh and Elise Fouquerel, ...



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ValueWalk

Professor Shubha Ghosh On The Current State Of Gene Editing

 

Professor Shubha Ghosh On The Current State Of Gene Editing

Courtesy of Jacob Wolinsky, ValueWalk

ValueWalk’s Q&A session with Professor Shubha Ghosh, a professor of law and the director of the Syracuse Intellectual Property Law Institute. In this interview, Professor Ghosh discusses his background, the Human Genome Project, the current state of gene editing, 3D printing for organ operations, and gene editing regulation.

...

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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

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

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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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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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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