long term position trading -primarily etf's-

WHEN WE ARE HAVING A MARKET SELL-OFF It is difficult to be agnostic. Hell, we've had what- 6-7 weeks of relative upside since that last sell-off- and that was a bit nasty- good buying opportunity though - if one got lucky-
If there is a plan in place to exit, one has to have a plan in place to take the reentry-This is where one gets 'tactical' in the approach- I think this could be analagous to the bow hunter compared to the shotgunner, compared to the rifle marksman. (I prefer bowhunting as having been my greater challenge) The bowhunter has to get in closer to the quarry- take aim and make a good shot- The other hunters also seek a good shot, but perhaps can do it with a much wider distance. All styles bring their own set of challenges- I simply prefer the one-that I consider more tactical.

Taking a moment to visit the weekly charts- Notice that in virtually EVERY past period in this chart- when the weekly bar closes below the ema- The following week's bar- even during the ''sb' -Snap Back reversals- all go lower than the weekly bar's close.
In over 50% of the time, the 1st weekly close leads the way into further weekly declines lower.
So, we don't know where the present weekly bar will finish on Friday- but my guess is that it will close below the ema- It is possible that it will move higher and what is a big red bar under the ema will close only as a spike-line lower.
Anything is possible- we don't know- but I'm betting this will be a MWD- Multi Week Decline- because we are so far extended above the slower ema- Just consider that wider gap perspective- and the concept that price eventually seeks equilibrium- reverts back to the 'mean'. Either the 30 needs to catch UP to where we are, or the slower will come back towards the 30-
It's not so much about the moving averages themselves- they are simply a guage of where price is relative to them- that can give one a wider perspective .
Tonight's exercise is viewing the wider picture- What has actually happened repeatedly
SSO WEEKLY SELL BAR DEC 2014.PNG
in the past and can I use it to my advantage going forward?
 
I started to mention this- UVXY - tracking position- I think I took it out of the earlier post-
The UVXY trade has gained 32% . Too bad it wasn't a decent $$$ entry- Stops are in $21.50
While i don't think I would have the gumption to trade this with any position size- it does point out the opportunity to consider shorter term tactical trades inside of one's 'normal' approach .
UVXY is not where one should start IMO - as it is the black widow trade. She gives you LOVE- but then devours you when it is over! However, it is a good exercise - regardless of how minute a position it is.
 
I got home early today to find the market had sustained an early am rally only to be selling off as it neared the close.
I allowed my normally negative Bias to interpret this price action- as something that potentially could go on further- What prompts the market to Buy at higher prices at this time of year? At the same time, the accounts are up-
What is the Risk : Reward - at this time of year? It is likely that large gains will not occur in the next couple of weeks- We've had our Christmas rally in the past month + . Or at least we've had a substantial rally from the pull back ......
I trimmed in the investment account, and decided that a lower high was reason enough to sell CURE & SPLV. Lock in some gains on todays move back higher compared to yesterday's lower close-
It was the market weakness going into the close that pushed my Sell button- The market had tried to put in a big rally today, but couldn't hold it- Sellers came back in , and price closed back close to where it opened.
This can be seen in the tight open to close and much higher intraday spike- Compared to yesterday's bearish sell bar, it does not appear to be optimistic that this week will finish well.

My decisions to sell were based on profit preservation- and I'm good with that- Market has been given a chance to pullback and then to move back higher-But I recognize that the market can drop a lot faster than it climbs- I'd rather give up a few % of gain, than be optimistic and take a greater drop in a decline-

My quick 30 minute assessment late this pm - combined with my desire to sell long positions, had me then take a rash decision to short the market. MY trading screen showed UVXY position climbing, and i jumped on board with a 2/3 position size- Conversely , I also went short with SDS- If this had been at the market's open, that would be one thing- But I am exposed with what was a rash decision in the closing moments of the market - to be in a trade- It was a decision made on the spur of the moment-
It was not a planned trade (s)
It was not entered appropriately-
It was made more on emotions than on planned execution.
So, if i manage to get out of this trade with part of my skin intact- or even if i make a profit- It is at a far greater RISK than is ever warranted- I could buy a bus ticket to Atlantic City and take the wife for the weekend! We'd remember that- but this trade will simply not be one that I can be proud of- JUst maybe I will get 'Lucky" . If that should occur- it could reinforce bad trading decisions that ultimately lead to greater losses.
My initial tracking Buy of UVXY was $18.59. Todays close $27.18 - a net 46% gain-
How long should it take to get a 46% gain? Fast come, Faster go. Very dangerous product to mess with IMO. The large potential gain clouds one's judgement.
In an unplanned decision- I bought 50 additional shares - combined new avg cost $26.73 going into the close.
Just a rash decision chasing a momentum bus that left the station 4 hours earlier- I could have had a buy-stop waiting for a much lower fill earlier in the day- I could have set that buy-stop yesterday pm if i was interested.
It's one thing to 'speculate' with a smaller Risk exposure- Maybe a 5%- even up to 10% of the portfolio- as long as the Risk is worth the reward-
I also took a short position with SDS- but a much smaller position- This position qty should have
been reversed with UVXY- 25 shares. Much lower Risk. Very quick impulse trades made with cash waiting to be deployed-.....
In after hours trading, my position is up 18%- but no telling what tomorrow's open brings-
I will hope the position opens up and gaps higher- instead of down. I will have a sell order at mkt for 1/2
and the remainder with a $27.00 stop loss.
 
sowterdad said:
I got home early today to find the market had sustained an early am rally only to be selling off as it neared the close.
I allowed my normally negative Bias to interpret this price action- as something that potentially could go on further- What prompts the market to Buy at higher prices at this time of year? At the same time, the accounts are up-
What is the Risk : Reward - at this time of year? It is likely that large gains will not occur in the next couple of weeks- We've had our Christmas rally in the past month + . Or at least we've had a substantial rally from the pull back ......
I trimmed in the investment account, and decided that a lower high was reason enough to sell CURE & SPLV. Lock in some gains on todays move back higher compared to yesterday's lower close-
It was the market weakness going into the close that pushed my Sell button- The market had tried to put in a big rally today, but couldn't hold it- Sellers came back in , and price closed back close to where it opened.
This can be seen in the tight open to close and much higher intraday spike- Compared to yesterday's bearish sell bar, it does not appear to be optimistic that this week will finish well.

My decisions to sell were based on profit preservation- and I'm good with that- Market has been given a chance to pullback and then to move back higher-But I recognize that the market can drop a lot faster than it climbs- I'd rather give up a few % of gain, than be optimistic and take a greater drop in a decline-

My quick 30 minute assessment late this pm - combined with my desire to sell long positions, had me then take a rash decision to short the market. MY trading screen showed UVXY position climbing, and i jumped on board with a 2/3 position size- Conversely , I also went short with SDS- If this had been at the market's open, that would be one thing- But I am exposed with what was a rash decision in the closing moments of the market - to be in a trade- It was a decision made on the spur of the moment-
It was not a planned trade (s)
It was not entered appropriately-
It was made more on emotions than on planned execution.
So, if i manage to get out of this trade with part of my skin intact- or even if i make a profit- It is at a far greater RISK than is ever warranted- I could buy a bus ticket to Atlantic City and take the wife for the weekend! We'd remember that- but this trade will simply not be one that I can be proud of- JUst maybe I will get 'Lucky" . If that should occur- it could reinforce bad trading decisions that ultimately lead to greater losses.
My initial tracking Buy of UVXY was $18.59. Todays close $27.18 - a net 46% gain-
How long should it take to get a 46% gain? Fast come, Faster go. Very dangerous product to mess with IMO. The large potential gain clouds one's judgement.
In an unplanned decision- I bought 50 additional shares - combined new avg cost $26.73 going into the close.
Just a rash decision chasing a momentum bus that left the station 4 hours earlier- I could have had a buy-stop waiting for a much lower fill earlier in the day- I could have set that buy-stop yesterday pm if i was interested.
It's one thing to 'speculate' with a smaller Risk exposure- Maybe a 5%- even up to 10% of the portfolio- as long as the Risk is worth the reward-
I also took a short position with SDS- but a much smaller position- This position qty should have
been reversed with UVXY- 25 shares. Much lower Risk. Very quick impulse trades made with cash waiting to be deployed-.....
In after hours trading, my position is up 18%- but no telling what tomorrow's open brings-
I will hope the position opens up and gaps higher- instead of down. I will have a sell order at mkt for 1/2
and the remainder with a $27.00 stop loss.
More...
I was indeed LUCKY with the way the UVXY trade worked out-
It certainly felt going into the close that the attempted large gains early in the day gave way to additional weakness- I had closed my other positions, had freed up cash , and the "thrill" of the chase- A very bad mix for someone forgetting discipline and going for pure momentum.
Greed reinforces bad behaviors- I guess Fear does too. Having a "method" and not trading on just intuition should help with those issues.
I considered Selling the entire position at the open- But, common sense prevailed-I was already stuck with the position. I didn't know where the position would open- I hoped for a gap open higher (got it) to sell 1/2, and then - just in case it had more momentum- and didn't open lower- I set a stop slightly above my entry.
Net gain of +6% and i'm glad i am out of the position-unscathed.
I still have SDS open and in profitable territory. I may add slightly to the position- 30 minutes remain...
I'll still track UVXY- but perhaps I will consider TVIX instead next time.
Something else to consider- I expect the 2x will not degrade as much as the 3x?
uvxy stops out 12.12.14 lucky me.PNG
 
added to SDS, & took a position in SKF 3:54 $53.36
Financials look weak - very strong upmove on the daily-
 
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sowterdad said:
added to SDS, & took a position in SKF 3:54 $53.36
Financials look weak - very strong upmove on the daily-
More...
What a Week! CNBC is saying both the Dow & S&P gave back everything gained over the past 5 weeks!
Sometimes we get it right- quick stops - take profits- small losses- tactical trading is likely what we are going to head into- It feels like this decline may not have a quick snap back trend resumption- It is certainly an opportunity to regroup, consider what I may choose to target as long trades- but i'm going to be cautious- I don't think there is a need to make snap reentry decisions-
In the trading account, the decision to make the quicker sells proved timely, as virtually everything has since moved lower- Wider stops would only have provided wider losses. In the investment account, the same is true- Opportunities will present better buys at better valuations lower. Have to have a plan to make the reentry- but I wonder if it will not be done in bits and choppy pieces, vs the last upturn that occurred with great momentum. This last trending period was exceptional.
 
Taking a moment this Sunday 12-14-14 - Market Timing - John Bogle (Vanguard Funds) would point out that timing the market is generally a losing proposition for the vast majority of market participants- including most professionals. Both he-and the company that houses my Investments/401k reminds me that most of us retail investors Sell at the bottom of a pullback, and only get back in once things have stabilized.
A lot of us with some investments indeed felt the pain in 2008. 2009 was a big market rally- going from near to $60 to $100+ - up 67% + from the lows- . The company that houses my company's 401k accounts is quick to remind me that in order to get those gains- one needs to be- and stay- in the market-
They also like to focus my attention on how large a gain the market has returned since that time-
They want me to stay the course- as it is also in their Best Interest- as they get to charge their expense ratio on their professionally managed funds. John Bogle also tells us that we should review the costs of the professionally managed funds and compare the costs and the performance against the passive Index approach with it's low cost structure, low turnover, and getting the market return.
Market corrections are considered "Normal" and opportunities to "BUY" with more investment dollars-
2010, 15% correction, 2011 a 27% correction, 2012- perhaps 9% - Well, unless you have hoarded cash, most investing plans automatically put your investment dollars to work - something to be said for the merits of dollar cost averaging in every month.
The recent correction in October happened to work out in my favor- Looking at the chart, It was a minor blip- on the Monthly- But an Opportunity on the daily.

Step back, and get a sense of the Big Picture-
As I bring up SPY since 2007 - monthly view- What stands out is how smooth sailing our markets have had for the past 2-3 years- That sell-off in October - was a minor blip intrabar dip - on the chart anyways-
I think the historical market average return -going back pre depression- is 7-8% per year-
since the highs of 2007 ($135.00) to today $200.00 we have had a gain of 65% over 7 years or 9.2%/ year- better than the historical average-
Consider when one normally sells- It is usually not near the HIGHS- it is only after the pain of losing that one throws in the towel. And how far from the highs is that pain threshold ? And when do we reenter? When it feels safer- Often this can be at a higher cost than we sold. Retail investors -including myself- historically greatly underperform the market averages over time. We get a very narrow focus on day to day price action- without comparing to the Weekly. This is something I am working on in my own trading-How can I trade more tactically-use that faster view to take advantage of higher and lower moves, while not putting myself in the wrong direction with the market-? It is a balancing act of course- combined with not having intraday access to get a sense of what is moving the mkts-That Might be an advantage though-
It feels like my faster time frame approach is presently the correct approach for this market-I think I had a 2- 3 % net decline in port value from the high, The Cure position had lost approx $100 in port value overnight- sold Cure- took the UVXY trade-
If we Sell- what is plan B? Can we take advantage of the decline we think is occurring with short positions or put Options/ As the Monthly chart show- Declines have been generally short lived -except for 2008.
( My present short positions respect the power of the prevailing market trend- I don't think this is the beginning of a large multi week decline-I will take these positions as very tenative - looking for them to move with some momentum- and look to reenter some Long positions- at lower prices than I sold.)
Chart is the Monthly- This month's active bar is presently RED- but it is an Active bar still forming- It certain looks bearish- and is pushing the moving average lower- It may not end this way-
The weekly bar closed solidly under the ema- It is normal for the next week's bar to go lower- initially- even if it reverses higher . I think the greater depth of the October decline sets the stage now for a lot of profit protection - and perhaps tax-loss selling?
The 'FEAR' that lower OIL consumption might be a decline in the world economies is one thing I've heard that has shaken the market- It's great for the consumer- though- and perhaps this postpones a Fed action on a potential rate Hike? Mixed cause and effects might make for a choppy market- Market participants have to process all of this varied information- and will come to a consensus as to what it really portends.
A larger sell-off this week would benefit my short positions, and give me an opportunity to go back long at lower prices.
SPY MONTHLY 2007 RETURNS.PNG
 
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ON SKF-
I was not really focused on having a selection of short trades to take- and it only makes sense to have a list of etf's that I would consider worth acting on - long and to the short side- I need to work on that list-
For example- OIL has been going down for an extended period of time- It would be prudent to have a narrowed list that gave a wider market exposure both long and short- perhaps TVIX vs UVXY?
Something to work on- I don't expect to hold too many positions-at one time-And- I have to evaluate if there is a rational reason to have both 'conservative' positions offset with leveraged? I don't mind being overweight in a conservative position-
Working 6 days a week lately and going into the Holidays-
For Christmas, I have requested several books- Trading In The Zone -Douglas-
and Mastering the Trade - by Carter- Hopefully Santa delivers and I get the time to read them.....
SKF shorts the financials. On the attached Daily chart, price made a strong bullish close Friday , after several days of consolidating off a downtrend- I took an entry at the end of the market day as I was home earlier than normal (goal every Friday)-
If there is decent follow through higher Monday, I feel I can then raise the stop to the low of the entry bar, but don't want to crowd this entry - unless it weakens.
SKF ENTRY 12-14-14 DAILY.PNG
SKF ENTRY 12-14-14 DAILY.PNG
 
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To be clear, nothing wrong with either book you mentioned. I've read both and am happy I did. Look upon my suggestion as something I believe will appeal to you.
 
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