long term position trading -primarily etf's-

[sowterdad]

1.19.15
Quick journal note-Put in an unusually long work day- Home 9:30 pm and meetings 7am tomorrow. . Market closed due to the holiday- Set stops on XLE and GLD on the 2 hr- with some room as long as price behaves. I like taking the XLE trade here on this reversal-Close to the POF- Not so much being tardy with GLD- price was extended-already, yet i took a small opening position- I'm not looking to add to this- hoping for a pop over a few days more- Impulse trade there-

Watched Michael Douglas- "Gordon Gekko-" -" Wall Street." this weekend- Insider trading was his edge back then- Despite all that has happened- and guys like Jaime Diamond are complaining about over regulation- scandals still occur in the industry despite a more rigid system- These very smart guys with all of the assets they have at their disposal will continue to win over the long term. Regulations just slow them down a bit.
Should be an interesting week- anxious to hear in the premarket if news from Europe looks ready to push the markets higher- See if the energy trade is a bull trap here- or if a bottom has been found- The energy trade also affects a lot of the companies in the S&P- as they are energy related- And likely some Banks, as they had financed a lot of the exploration - With large energy lay-offs coming in the US market- and Oil prices not likely to jump higher to encourage further expansion- The big energy boom in the US succeeded too well?

If a strong dollar is anegative on our large multi-nationals, and the dollar is pushing higher and higher- what happens to change a negative outcome/ I don't grasp but tidbits here and there that seem to make sense-but the Intl markets perhaps are ratcheting up in their own way? It is certainly a macro world we live and trade in- and invest in- Muddy are the waters-wish I understood this stuff and could apply it to my advantage.....
Where's my rock? Time to crawl back under.........

 

[sowterdad]

1.20.15
fOLLOWING A 3 DAY WEEKEND,
Morgan Stanley disappoints- BAC is upgraded- BAC is considered a better value on Fast. IBM disappoints-
Markets were down earlier, made a marginally slight higher close- Waiting on the ECB- and perhaps tonight's State of the Union- President 's approval rating has increased in the last months- Cheaper gas responsible? Jobs?
What will the Fed's guidance be while the markets wait on the ECB?
OIL declined again today- USO dropped 4.64% after trying to rally for a few days- However, it is still above the recent low- XLE moved higher today- this is worth noticing -
Over the past few months, XLE has tried to rally despite weakness in USO. Today's price action sets up for a possible trade that Oil gets a footing this week, and a resulting bounce in the USO & XLE_ I own a partial XLE position- I would consider - if I had freed cash- a buy-stop entry above today's high, Say $75.40- with a limit of $75.60 .
I would not put in a limit order lower- I would want to see the momentum continue to the upside. Under no circumstances would i use a mkt entry - Using a stop on the daily chart , I would choose $72.50 on the aggressive 2 hour- I would use $73.75 . I just used $73.40 on my present position-
This buy-stop suggestion may be a moot point since i don't think cash will get freed up in this account for another 1-2 days. A note on reversal trades- You have to be suspicious- the predominant trend usually wins most of the time- Reversal trades are likely very short lived- but opportunity for an oversold pop.
IBB moved out to a new high- closed up to $323.00 - My entry was in the 313, and it declined into the $307 area- I continue to have a positive long term Bias for this sector-
I should simply BUY some of this and look at it in 5 years- CURE is not behaving as well- stuck in a mid range. PJP is looking more like IBB_ moving higher-
If the market doesn't find a reason to sell off this week- or even if it does- I think having some exposure to the healthcare/biotech sectors will prove to be another positive for Investors-
XLU is still moving higher- this is cautionary for the market as XLU should be viewed as defensive.
Bond fund AMHIX opened and closed at Friday's price.-
TLT moving higher - defensive.
GLD higher- Defensive- It gapped significantly higher -
VIXY tried to gap open higher, but had a pullback after the market scratched out a gain.

Investment account had some minor bounce in the positions I took last week.

The financial short trade is still a viable chart- SKF- has a pullback through and down into the gap Today's price action filled the prior gap but closed near the high-
If I had some freed cash, a buy-stop higher on an entry partial position $55.00 with a stop at $52.50 on the entry I would add to the position on a positive close higher $56.00.00
The advantage of using Buy-Stops- is they are like an Insurance premium- You can select the entry price to be activated at- at a higher price- (and always include a limit)
This means the trade will at least have to go in your direction- When seeking momentum,
buying at a value price may not be the best strategy- You get left behind and gapped over- or you get filled on a fizzled trade that declines with a lower market limit order.
The XLE trade is "Risky" - so stops and appropriate smaller spec position sizing are a must IMO.
Could be a bust right out of the gate.

 

[sowterdad]

1.20.15
fOLLOWING A 3 DAY WEEKEND,
Morgan Stanley disappoints- BAC is upgraded- BAC is considered a better value on Fast. IBM disappoints-
Markets were down earlier, made a marginally slight higher close- Waiting on the ECB- and perhaps tonight's State of the Union- President 's approval rating has increased in the last months- Cheaper gas responsible? Jobs?
What will the Fed's guidance be while the markets wait on the ECB?
OIL declined again today- USO dropped 4.64% after trying to rally for a few days- However, it is still above the recent low- XLE moved higher today- this is worth noticing -
Over the past few months, XLE has tried to rally despite weakness in USO. Today's price action sets up for a possible trade that Oil gets a footing this week, and a resulting bounce in the USO & XLE_ I own a partial XLE position- I would consider - if I had freed cash- a buy-stop entry above today's high, Say $75.40- with a limit of $75.60 .
I would not put in a limit order lower- I would want to see the momentum continue to the upside. Under no circumstances would i use a mkt entry - Using a stop on the daily chart , I would choose $72.50 on the aggressive 2 hour- I would use $73.75 . I just used $73.40 on my present position-
This buy-stop suggestion may be a moot point since i don't think cash will get freed up in this account for another 1-2 days. A note on reversal trades- You have to be suspicious- the predominant trend usually wins most of the time- Reversal trades are likely very short lived- but opportunity for an oversold pop.
IBB moved out to a new high- closed up to $323.00 - My entry was in the 313, and it declined into the $307 area- I continue to have a positive long term Bias for this sector-
I should simply BUY some of this and look at it in 5 years- CURE is not behaving as well- stuck in a mid range. PJP is looking more like IBB_ moving higher-
If the market doesn't find a reason to sell off this week- or even if it does- I think having some exposure to the healthcare/biotech sectors will prove to be another positive for Investors-
XLU is still moving higher- this is cautionary for the market as XLU should be viewed as defensive.


Bond fund AMHIX opened and closed at Friday's price.-
TLT moving higher - defensive.
GLD higher- Defensive- It gapped significantly higher -
VIXY tried to gap open higher, but had a pullback after the market scratched out a gain.

Investment account had some minor bounce in the positions I took last week.

The financial short trade is still a viable chart- SKF- has a pullback through and down into the gap Today's price action filled the prior gap but closed near the high-
If I had some freed cash, a buy-stop higher on an entry partial position $55.00 with a stop at $52.50 on the entry I would add to the position on a positive close higher $56.00.00
The advantage of using Buy-Stops- is they are like an Insurance premium- You can select the entry price to be activated at- at a higher price- (and always include a limit)
This means the trade will at least have to go in your direction- When seeking momentum,
buying at a value price may not be the best strategy- You get left behind and gapped over- or you get filled on a fizzled trade that declines with a lower market limit order.
The XLE trade is "Risky" - so stops and appropriate smaller spec position sizing are a must IMO.
Could be a bust right out of the gate.

View attachment 148469 View attachment 148470

XLE moved higher today as anticipated-I took larger positions in it and IBB in a separate account from the IB trading account. I'm not going to try to track combined gains/loss across these separate accounts- I will use the IB account/approach to track what occurs in that account specifically. Cash did not clear yet in IB allowing me to place the orders there-
A Wedge is developing in USO- no way to determine which way it will go-but Saudis
are willing to stay the course, oil may go lower, but USO is 2% higher at this moment -lunch time. If I was actively trading and it hits an $18.00 buy-stop, it will likely go higher today would be my thoughts-for a spec trade -small position. If I was day trading, I'd see if it doesn't move higher from the 11 am swing low $17.72- and take a possible -P.O.F. lower risk entry if it moved up again from that level. $17.80 bUY-sTOP (NOT AN ACTUAL TRADE)

 

[sowterdad]

1.20.15
fOLLOWING A 3 DAY WEEKEND,
Morgan Stanley disappoints- BAC is upgraded- BAC is considered a better value on Fast. IBM disappoints-
Markets were down earlier, made a marginally slight higher close- Waiting on the ECB- and perhaps tonight's State of the Union- President 's approval rating has increased in the last months- Cheaper gas responsible? Jobs?
What will the Fed's guidance be while the markets wait on the ECB?
OIL declined again today- USO dropped 4.64% after trying to rally for a few days- However, it is still above the recent low- XLE moved higher today- this is worth noticing -
Over the past few months, XLE has tried to rally despite weakness in USO. Today's price action sets up for a possible trade that Oil gets a footing this week, and a resulting bounce in the USO & XLE_ I own a partial XLE position- I would consider - if I had freed cash- a buy-stop entry above today's high, Say $75.40- with a limit of $75.60 .
I would not put in a limit order lower- I would want to see the momentum continue to the upside. Under no circumstances would i use a mkt entry - Using a stop on the daily chart , I would choose $72.50 on the aggressive 2 hour- I would use $73.75 . I just used $73.40 on my present position-
This buy-stop suggestion may be a moot point since i don't think cash will get freed up in this account for another 1-2 days. A note on reversal trades- You have to be suspicious- the predominant trend usually wins most of the time- Reversal trades are likely very short lived- but opportunity for an oversold pop.
IBB moved out to a new high- closed up to $323.00 - My entry was in the 313, and it declined into the $307 area- I continue to have a positive long term Bias for this sector-
I should simply BUY some of this and look at it in 5 years- CURE is not behaving as well- stuck in a mid range. PJP is looking more like IBB_ moving higher-
If the market doesn't find a reason to sell off this week- or even if it does- I think having some exposure to the healthcare/biotech sectors will prove to be another positive for Investors-
XLU is still moving higher- this is cautionary for the market as XLU should be viewed as defensive.
Bond fund AMHIX opened and closed at Friday's price.-
TLT moving higher - defensive.
GLD higher- Defensive- It gapped significantly higher -
VIXY tried to gap open higher, but had a pullback after the market scratched out a gain.

Investment account had some minor bounce in the positions I took last week.

The financial short trade is still a viable chart- SKF- has a pullback through and down into the gap Today's price action filled the prior gap but closed near the high-
If I had some freed cash, a buy-stop higher on an entry partial position $55.00 with a stop at $52.50 on the entry I would add to the position on a positive close higher $56.00.00
The advantage of using Buy-Stops- is they are like an Insurance premium- You can select the entry price to be activated at- at a higher price- (and always include a limit)
This means the trade will at least have to go in your direction- When seeking momentum,
buying at a value price may not be the best strategy- You get left behind and gapped over- or you get filled on a fizzled trade that declines with a lower market limit order.
The XLE trade is "Risky" - so stops and appropriate smaller spec position sizing are a must IMO.
Could be a bust right out of the gate.

View attachment 148469 View attachment 148470

XLE behaved as outlined towards the positive move higher-
I added to this position in a separate account-

 

[sowterdad]

XLE moved higher today as anticipated-I took larger positions in it and IBB in a separate account from the IB trading account. I'm not going to try to track combined gains/loss across these separate accounts- I will use the IB account/approach to track what occurs in that account specifically. Cash did not clear yet in IB allowing me to place the orders there-
A Wedge is developing in USO- no way to determine which way it will go-but Saudis
are willing to stay the course, oil may go lower, but USO is 2% higher at this moment -lunch time. If I was actively trading and it hits an $18.00 buy-stop, it will likely go higher today would be my thoughts-for a spec trade -small position. If I was day trading, I'd see if it doesn't move higher from the 11 am swing low $17.72- and take a possible -P.O.F. lower risk entry if it moved up again from that level. $17.80 bUY-sTOP (NOT AN ACTUAL TRADE)View attachment 148493

DID SOME CHART HOMEWORK ON USO TONIGHT
While there will be a pop in this at some point- and I have become an advocate of looking for an oversold trade- looking at the monthly chart of USO - I can only ask what is wrong with this product? I expect it is something that is hedged, or trades on rebalanced derivitive products- This monthly chart going back prior to the 2009 market collapse shows a much higher USO price pre 2009, the collapse with the market- and a very subdued rebound and sideways range ever since- despite the much higher increases in gas and oil prices in past years.
While the USO will move higher-it's likely similar to the UNG- a product that I do not understand it's inner workings. USO would therefore be something considered as a short term trade- but not to build an investment account with - if the past chart is any indication.

 

[sowterdad]

dRAGHI SPOKE, ECB Will buy debt-
Markets rallied today, and you have to be a short term bull- financials higher also!
In the investment account, took a chance and put in orders to fill Friday to buy Euro pacific,
emerging mkts, us mkts. Had a very large cash position in those accounts, put some dollars back to work/risk/. With today's orders, will be up to 50% invested in that account.
I think this is a good time for being a more short term oriented trader- vs an investor/trader with a larger horizon- Suck up those trailing stops tighter.
Gold is in rally mode- this is an underlying 'fear' trade on the value/ exchange of the stability of the world's currencies- It certainly looks overextended on this rally still- I have raised my stop tonight on GLD to $123.82. This nets a profit on the trrade, but is below the pullback low intraday. Not trying to hit home runs at this time- bunt hits & singles are fine.

 

[sowterdad]

Premarket thoughts Friday-
USO- Saudi King dies- OIL is up 3%- Will be good for the XLE position- USO may go higher-
I think USO would only be good as a short term momentum trade- for a few days- and XLE
is the safer way to go USO as a riskier . I haven't decided.
I'm Looking to buy SSO- better volume than UPRO
Also buying the Inverse $vix XIV vs the leveraged inverse- going to try to learn this one.
PJP is moving higher- Pharma- fundamental reasons the longer term trend stays intack- great multi year performer- will also add in the investment port.
Investment -HACK makes sense in this day and age to get exposure to this sector and not just bet on 1 stock
http://finance.yahoo.com/news/inside-hack-sought-cyber-security-180006948.html

 

[sowterdad]

1.24.15
CAUTION and Fear
I made a number of trades on Friday, despite the uncertainity the markets were showing.
Overall, there are a lot of reasons to think that things could be bearish-going forward- and now is a good time to be cautious- But, there are always good reasons to be cautious-
For me personally, I have historically "fit" the model of the stereo-typical average retail trader- Trading psychologists tell us we have 2x the aversion to losing as we have the desire to lose out on gains.
That has certainly been true in my trading over the years.
I have been overly cautious when I should have been aggressively bullish, and - gone bullish and gotten slck on stops- all trading my Bias-
This year, I will be taking on some greater Risks in positions, instead of taking on larger "safer" positions- I will still look to protect the trade with stops on a losing position, and will seek to allow a winning trade to run higher- Have to watch my normal Bias to think negatively about where the market is: and trade the chart.

There are concerns the market is well extended (it is). Bull run is long in the tooth historically. Concerns that the market is priced above it's historical average ( I think that is the case- but it is not overly HIGH PE.), Concerns about slowing earnings here...
Concerns about the Europe situation, and how the Euro countries will work through the currency exchange/valuation, and QE for Europe- It's a complex subject- and no one knows
what the outcome will be (GLD reversed and stopped out Friday -Small gain);
There is deflation in the rest of the world markets? US dollar is increasing in value- that will affect the large industrials selling into a cheaper foreign market for lower value. (DOW).
Energy is seeing Oil still in decline, and there's concerns about the US consumer- despite the lower gas prices being a bonus- not stepping up to the plate and driving the economy higher with spending those surplas dollars that used to go into the gas tank- or heating their homes.
In the past, One of the 'expressions' heard is "The Market Climbs a Wall of Worry".
and the "Market can Remain Irrational Longer than a trader can remain solvent" regarding taking contrarian positions based on one's BIAS. Or 'Value' buying despite the trend indicating that the market sees value elsewheres.
How about the political landscape ? Fed meeting, GDP report- Earnings-

I don't know where we are headed. More Volatility I'm sure. I hope we will 'work through' and that those that are overall bullish that the US Of A holds the best (but not strong) economy, the 'Best' place for foreign investors- are indeed correct.
Tech rallied some this Friday , while Dow & S&P sold off a small amount Friday-

In terms of trades and Investments:
I put more Investment dollars back into the market- Including some exposure to Europe & emerging mkts.and US -AEPGX, AWSHX,AGTHX Mutual funds in a separate account- not a recommendation to BUY- There are plenty of low cost ETF's one can get exposure to other markets with no=load, No large Ex Ratio-
I think healthcare & biotech are sectors that continue to see upside- and perhaps can be somewhat defensive plays compared to other parts of the market.
I added IBB as well as PJP in both the trading account and as Investment positions.
and, a much smaller position in the leveraged CURE.
I added an entry investment in HACK- Cyber security ETF- I don't think this industry is going away , demand should only increase- We'll see if this is already priced in to the ETF.
I was going to go long the leveraged SSO, but as a proxy, I selected $vix as a way to
track the market volatility- I'm using XIV as the inverse and will see if I can actively manage to tade this and stand the swings.
I also am short the concerns about the Euro currency with the EUO 2x ultra short ETF.
Quite a vertical climb already, but I think has more legs higher as Europe has concerns with Greek debt, and all the other elements in play that look to destabilize a smooth currency there- It's a trade- trailing stops -
and I took a 'value' bet- BRKB- with about a 2-3% Risk if it breaks down from this level.
More on that trade in a separate post.

 

[eurusdzn]

Nice one regarding EUO.
UUPT is a Powershares 3x USD ETN. It is a weighted basket of 6 currencies.
Volume has doubled recently . Relatively unknown at this time.

 

[sowterdad]

Nice one regarding EUO.
UUPT is a Powershares 3x USD ETN. It is a weighted basket of 6 currencies.
Volume has doubled recently . Relatively unknown at this time.

Thank you Eurusdzn for pointing this out- I traded EUO in the past year-but looking 'outside the box' I have somewhat limited myself to what is common within a narrowed trading universe. Such limitation also lowers one's opportunities to find momentum going in the positive direction. I will admit I do not grasp the relationship that others can find as to what forces are at work causing a currency or bond to rect the way it will- nor how it relates to the $ USD. Noticing in the attached chart the underperformance of $spx relative to the TLT, UUP, EUO, UUPT.
My EUO entry was quite late, but I believe it has merit to go higher- -I will protect the trade with a stop-loss, but try to allow it some run room.
Thanks for posting!