long term position trading -primarily etf's-

[sowterdad]

Thurs 4.2.15
Markets put in a tepid 1/3% rise today-minor moves higher.
The UVXY position went lower as the market's climbed-
I had considered - placing a tight stop-loss after being filled-
But it's intentionally just a small position/experiment. Now, with 3 days of the market being closed- a lot can possibly occur that will make the market respond this coming monday. Reportedly a good jobs number helped the market today, but it wasn't a huge 1% gain/rebound.
While the SPY managed to put in a higher close than open, it matched the prior sell-day open- and is still below both the fast4 ema and 10 ema on the daily- and on the 1 HR , it shows price moving up off the open to the high of the day, and then going sideways.
If you don't have follow thru after the open hour's bar, it suggests that traders are simply cautious and not willing to step up to the plate- They need better clarity- Fed, Dollar, Earnings....to hang their hat on to hold a long position. Maybe they will get that over the long weekend. And, after a choppy start to this year- investors are more cautious-
They recognize that there has been a possible change in the market's temperment - A 5-6% decline was a recent BUY- BUY-
I'll use PJP - a personal favorite- that did not follow the SPY today.
That's possibly just sector rotation - but it needs to be duly noted- I think I have a limit to Buy 50 PJP @ $71.00 as a wait and see if i can catch a harsh market decline.
I should try to illustrate this through charts- but not enough time this pm.
SPY - while a rolling up and down over the past 3 months- Put up a daily chart of SPY for 4 months- and then alternate with PJP- What is troubling is that SPY has at least tried to rally from a higher low- while PJP just put in a lower low.
Both could Rally from here- but this makes me more cautious on PJP the investment -go-to- vehicle for safer trading the market momentum.

It's also been said that Traders will often sell what has made them the most money- locking in those higher gains- when the market gets dicey.

I wish I had more time to explore what is occurring elsewhere's -
Emerging (EEM) is on an uptrend, HEDJ looks like it is basing- after a nice run higher-
Europe in general may be on a higher move on a lower valuation.
EWJ up nicely these past months- Brazil -EWZ- possible upside move-
I do not have any sense of the larger picture in the ETF world- other to note that it is easier to lock in gains when a position is in an uptrend- and take a long position on a pullback- Rather than fight a choppy market that is flat or on the verge of deciding whether to go higher or decline lower.
While the US markets are in a period of decision- Life and trading occur elsewheres. Not always tied to the US market's movements- One has to be cautious when stepping off the beaten path- but it is also a larger universe- and offers greater diversification.

If the US markets do disappoint after an extended 6 year run, the market reaction could be we see a sell-off more than 5-7%- a 'do-over'- or a market correction.

Investors may also seek to widen their investments- and seek some protection in areas that appear to be worth the valuations and growth potential.
I think it becomes a 'stock picker's market' because the Tide will eventually Fail to Rise all Boats.
Diversification - on a global scale- may offer pockets of growth unaffected by a US Market's issues- Part of a diversified portfolio should contain exposure to the global picture- and not just be US centered.
The diversification model is particularly appropriate for Investors with a long term horizon in a retirement account-
Spring fever is here in NC! I'll try to get a chart or two posted over the weekend- but a lot of outstanding chores to be attended to outside- Kitchen table is covered with seeds sprouted ready for the garden! There is some need for balance in this endeavor.

 

[sowterdad]

4.3.15
Friday's jobs report came in below expectations.
Also, the prior months reports were revised lower-
CNBC MARKET GURUS - seem to have different interpretations of the same Data, and ultimately how it will affect the FED's decision on whether to actually put in a small rate raise at the next meeting-
They also cited concerns about possible wage inflation- workers demanding higher wages-'Living Wages" I assume this is based on activity to get lower rate workers a better wage- ? Cited as a concern for business's bottom line growth- HMMM, I wonder if a low wage worker who actually sees an increase in his wage- would not add that back into the economy by becoming part of the consumer driven economy we supposedly thrive on. Maybe they actually get to spend a little on something more than the basic marginal amount needed on survival for Housing & food?
That was one of CNBC,s Guru's take this am- The wage growth is starting to occur, and our economy will not see a benefit yet in this quarter, but it would be a psoitive gain in the 2nd quarter. Spending is what drives our economy.

This market reacts to how different data inputs are interpreted.
Earnings- if they disappoint on lowered projected earnings- Not good at all- There will be excuses- the cold winter weather, The higher Dollar, But, if the price multiple is considered too far out of 'normal' valuations and future growth projections are also cautious, Investors likely will look look to lock in profits and sell - looking to Buy a lower price bargain.

Presently, on the WEEKLY chart going back into 2011- We had a market reset in 2011 that dropped price 20% or so- Since then, the market has made those higher highs and higher lows- we are still within the channel trend line - with some room to the downside still possible and not 'break' the trend line- Penetrations are one thing, closes below are more significant- look to the left on the chart for prior price support levels- and iof the next lower level is penetrated and closed below- say $ 196.00 that would be a real attention getter in the Investment community. Notice that last occurred 8 weeks ago in Feb.

Will get to my PJP position- later this weekend if possible- Rain day expected tomorrow-
healthcare- & PJP have been a very good market segment - but Investors are ringing the register and locking in some gains here.

 

[sowterdad]

4.3.15
Friday's jobs report came in below expectations.
Also, the prior months reports were revised lower-
CNBC MARKET GURUS - seem to have different interpretations of the same Data, and ultimately how it will affect the FED's decision on whether to actually put in a small rate raise at the next meeting-
They also cited concerns about possible wage inflation- workers demanding higher wages-'Living Wages" I assume this is based on activity to get lower rate workers a better wage- ? Cited as a concern for business's bottom line growth- HMMM, I wonder if a low wage worker who actually sees an increase in his wage- would not add that back into the economy by becoming part of the consumer driven economy we supposedly thrive on. Maybe they actually get to spend a little on something more than the basic marginal amount needed on survival for Housing & food?
That was one of CNBC,s Guru's take this am- The wage growth is starting to occur, and our economy will not see a benefit yet in this quarter, but it would be a psoitive gain in the 2nd quarter. Spending is what drives our economy.

This market reacts to how different data inputs are interpreted.
Earnings- if they disappoint on lowered projected earnings- Not good at all- There will be excuses- the cold winter weather, The higher Dollar, But, if the price multiple is considered too far out of 'normal' valuations and future growth projections are also cautious, Investors likely will look look to lock in profits and sell - looking to Buy a lower price bargain.

Presently, on the WEEKLY chart going back into 2011- We had a market reset in 2011 that dropped price 20% or so- Since then, the market has made those higher highs and higher lows- we are still within the channel trend line - with some room to the downside still possible and not 'break' the trend line- Penetrations are one thing, closes below are more significant- look to the left on the chart for prior price support levels- and iof the next lower level is penetrated and closed below- say $ 196.00 that would be a real attention getter in the Investment community. Notice that last occurred 8 weeks ago in Feb.

Will get to my PJP position- later this weekend if possible- Rain day expected tomorrow-
healthcare- & PJP have been a very good market segment - but Investors are ringing the register and locking in some gains here. View attachment 150930

nEXT CHART IS PJP- Monthly.
I eliminated the actual price bars-in this chart- because - for this purpose- one needs to capture an overview of price momentum. This is similar to establishing trend lines to bracket the high and low range of price movements.
While price making a new momentum high always -eventually- has a pullback- it is not possible to predict when that momentum ends- and how far it pulls back- Sometimes the pullback returns to the average (mean)- generally- perhaps the mid point of most trend channel lines.
In the PJP chart- there were 2 early pullbacks that saw the average decline well below the mean- In the following years, typically the mean has held the average. Price action- will not necessarily respect the mean as any kind of averaged support- and will penetrate it with intraweek price action.
So, WHY bother taking this step in looking at the "bigger" picture.?
I learn something when I do this- Since price average has typically come back to the 'mean' center line-This should be an expected- perhaps a targeted event.
It all seems somewhat too simplistic- and it is- until one introduces PRICE action.

 

[sowterdad]

nEXT CHART IS PJP- Monthly.
I eliminated the actual price bars-in this chart- because - for this purpose- one needs to capture an overview of price momentum. This is similar to establishing trend lines to bracket the high and low range of price movements.
While price making a new momentum high always -eventually- has a pullback- it is not possible to predict when that momentum ends- and how far it pulls back- Sometimes the pullback returns to the average (mean)- generally- perhaps the mid point of most trend channel lines.
In the PJP chart- there were 2 early pullbacks that saw the average decline well below the mean- In the following years, typically the mean has held the average. Price action- will not necessarily respect the mean as any kind of averaged support- and will penetrate it with intraweek price action.
So, WHY bother taking this step in looking at the "bigger" picture.?
I learn something when I do this- Since price average has typically come back to the 'mean' center line-This should be an expected- perhaps a targeted event.
It all seems somewhat too simplistic- and it is- until one introduces PRICE action.
View attachment 150967 View attachment 150968

a SIMILAR VIEW-
A couple of channel lines based off the fast ema pullback lows, and then the upper penetration highs-
What i noticed when trying to draw channel lines is that you cannot always fit all of price action inside 2 lines- So, I think it's appropriate to recognize what price does the majority of the time- and what it does when it exceeds the "normal" average-
Also, price does not always move at the same rate of change- so momentum moves within the channel lines can also be noticed.
When price breaks out on higher momentum, PJP shows several such occurrences- Notably March 2014 a large move- and also a snappy pullback.
Lines are drawn after the fact- Connecting 2 dots and extending a line only becomes relevant if a 3rd point exists- and the further away, the better. The more points that one can find a long a line, the more relevant it may be.
Putting price inside lines is similar to putting up lines on the ballfield- It gives us a sense of whether something is "In " or "Out" - In this chart, the red line below the blue dashed line is the 50 ema- It runs fairly straight on an uphill slope telling me the trend is
higher-
When I plug in a 30 ema line, I get similar information, but closer to the pullback swing lows.

NOTE- I have now made an ASSumption- That once price exceeded the top channel line, that it will now likely decline- and that decline should not bring it below the lower line projection. This will offer a better value to add to the position.
What if price does exactly what it did Jan 2014- made a trend channel penetration as momentum slope was up inside the channel, made a minor pullback, and rocketed up out of the channel higher for that larger upside move?
Conversely, since I went back into the trade on a drop in price and a limit order to BUY- I made the ASSumption it will not have too large of a further decline-

 

[sowterdad]

SIMILAR CHART BUT DROPPING INTO THE DAILY AVERAGES.

 

[sowterdad]

introducing daily price bars back into the chart:and keeping the channel lines-
There is nothing that requires price to respect the upper or lower channel lines-
They are useful as a reference. A slower moving average line could likely be found that similarly appears to capture the swing lows.

 

[sowterdad]

GOING BACK: Trades in PJP - in 2015-
I had made some prior trades in PJP in 2014-
We all prefer to focus on winning trades-
But it's worth taking note when you do something that works-
and when you do something that does not work as well.
Initially in 2015, I started off in PJP with a delayed entry of 20 shares.
I say delayed, because it could have been 1-2 weeks earlier when price initially cleared the prior highs.
The same is true of the 2nd entry, It could have occurred a week+ earlier.
Despite the delayed entries, the upside momentum carried the trade higher-
Credit where credit is due- Following the momentum gap up higher March 4, price then sold off, and i exited the trades 3.06 selling the combined shares- 35 @ $ 75.91.
Nice trade- well executed- captured the majority of the peak of the move despite the delayed entries.
Following a couple of days of decline, price appeared to want to move higher, above the ema and i made a very timely entry. Price moved higher, and made a momentum gap up- and i felt this was time to lock in gains- as price failed to move higher on the momentum move.
I raised a stop-loss which was taken out $79.86 . Nice EXIT in hindsight-

I felt fairly confident when I captured and locked in the gain as price pulled back.
Trades were all profitable- nice gains. I felt that i could put in a limit buy order several % below my exit, and capture the start of another move higher-
I think I was starting to think CaChing! I've got this nailed-
SO, I got my lower limit order filled - and I was going to go with a lower price- but was concerned it would not drop that low!!! So, I raised the limit- order and was filled-
Since my initial entry this year also declined, but then went on to be a nice momentum move higher- I felt some security in assuming this trade would make a higher move-
After reviewing the trend line charts-I see that the recent pullback was not significantly below the top channel line. There is potential for a more substantial decline- that would still keep the up trend intact.
I have a limit order to add to this trade if price drops to $71.00 -I will buy 50 shares. and I have a stop-loss for the present position $74.50 for the present 30 shares.

 

[sowterdad]

UVXY- it is as much a discretionary trade as one can make- and dangerous as it is leveraged.
I entered with a small experimental position risking about $75 on the trade- I purchased 15 shares using a buy-stop entry while viewing UVXY pulling back in real-time.
My thinking at the time was that the market would assess the information - and the higher buy-stop would catch the 2nd move higher- after the optimists failed to Buy .
Well, the chart shows that the optimists showed up the next day, and UVXY declined.
The markets found reason to put in a small , tepid rally move on Thursday.
With the markets closed on Friday 4.03.15 - the Jobs report was issued, and the initial news was not a positive.
This is not a matter of being right or wrong on a single trade-, This becomes a matter of how the market decides to react to the negative input- Will it suffer a bit initially - and then shrug it off- or will there be some carry through- for the day- or days- or the week?
We have no way to know- except in hindsight- what will occur-
Even as I write this late Easter Sunday, trading positions will be evaluated affecting the open on Monday am. It will be interesting to see if the market finds reason to be optimistic - and rallies after a sell-off- Or if the market finds reason to find further disappointment- and a rationale to finally sell-off-.
The UVXY trade does not matter one way or another-
What does matter- is the truly larger picture- because it paints the market direction for weeks and months ahead.

 

[sowterdad]

4.06.15.
UVXY declined and likely was stopped out today-I hadn't checked that specific trade/account yet- But- Boy- I am glad i took such a small position.
It was 'experimental'
A lot of trading involves one's psychology- one's bias and approach- Actually- allow me to correct that assertion- Most of one's trading is constructed around one's belief structure- where we are most comfortable. Myself included.
The UVXY trade perhaps filled the Greed side -seeking that large momentum move higher.
I really thought that this was the time for the markets to turn and show some teeth-
OK- my crystal ball got it wrong-again.
I am unimpressed with PJP - markets rallied some-and I think the weak price action in PJP
- or BRKB for that matter- is worrysome.
i think PJP better correct higher from here- or there is alot of distance lower to a next support level. I hope we don't go there- but technically- from a trading standpoint- I have to allow my stop-loss here to remain- with the goal to reenter at a lower price.

I was asked if i should not give the PJP a wider stop-loss? It's not so much about PJP as a possible investment-and staying with the entry. it is about executing on the faster time frame. As an Investor- I certainly believe that PJP has years of upside unless the gov't meddles with new regulations. Acting as a shorter term trader, I want PJP to be leading the market, not lagging. It's present lack of momentum is disconcerting- it suggests further weakness rather than a market rally.
As a short term trader, I do not want to allow my positive long term bias interfere with a shorter term approach- so the present stop $74.50 stands- I will take the loss because technically, it is the right thing to do. This is making a distinction between an investment and a trading approach. Sometimes, it is difficult to separate the two .........
Also, I have a standing order to repurchase at $71.00- 50 shares.
This is similar to dollar cost averaging- with the exception that I will have sold my 30 shares at a higher price and a loss- and hope to purchase more shares for less closer to a bottom.
This could be a dangerous approach in a normal market- and foolhardy if we enter into a panic market- but that does not sound likely near term.

lET'S HOPE THAT IS THE CASE ANYWAYS.

 

[sowterdad]

PJP made the upturn today on the fast 2 hr chart- but- like the market- sold off going into the End of Day.However, it held above the fast ema, and technically is in a position for a buy-stop entry higher-
This will be the 2nd time price has attempted to reverse higher in this decline-
The 1st attempt higher, barely got a nose above the ema, and it gave way on weakness to this second attempt higher.

Some report disappointed- Tactical traders sold their gains today -selling into the upmove.

With this recent swing lower in PJP- coming close to my generous stop-loss- That is indeed the bottom line- This is 2 drops along with market weakness-
i will add 15 shares to the existing with a buy-stop entry 77.25- 77.40 stop $76 on that order.
Oddly enough, XBI has held up and is at the prior swing high-
Buy-stop- 226.50 stop 219.50
USO - the right entry would have been today on the 2nd up move- above the high.
$19.20 is the entry , with a 5% trail stop on the order.
TLT is moving higher- No trade for me there- but worth noting-
It's worth opening one's horizons- to see where growth may be occurring elsewheres-
EWJ - at a recent high- potentially a buy-stop type order would catch the move above resistance? EEM- it has broken out higher this past month-
Ultimately, I think these are examples of why a trader should not be all US focused and trying to make some profits in the CHOP. Look for the alternate trends in other markets-
As one looks outside the uS- one needs to consider - as a friend pointed out to me- that
low volume ETF's should be traded cautiously. They are not all created equal.

I had an interesting phone call from the broker that manages the company IRA-
He was concerned - was i aware that the Money market Account I was mostly allocated- parked in would not give me any net return?
I responded that I thought the markets were fully valued, perhaps overpriced, and good candidates for a correction. That I was sleeping soundly at night not concerned that i would missout on a 5% possible market move higher compared to the possible downside.
Our conversation ended as I informed him that I had been learning more about passive investing with ETF's. He had to go.......