Interesting times in the olde corral this week…
A number of the symbols we follow were not updated this week for some reason, a glitch somewhere in the system.
I kept an eye on them on other charting systems. Let’s update them now.
There were four open positions. Three closed out, two at a profit, one at a loss.
The portfolio balance before we start ciphering was: $138,066.90
20 Year Treasuries: TBT=DOWN, UBT = UP
We bought into TBT per our process just above resistance at $17.09.
It hit a high of $18.30 before taking a dive and stopped us out. The trailing stop anchored the stop at $16.29 which is where we were closed out. The result:
$17.09 – $16.09 = .80 X 700 shares = ($560) Loss
S&P 500: SSO = UP, SDS = DOWN
As you are aware we use symbols that are readily available on the stock market so that the average person can use them in their retirement accounts that might have restrictions for shorting or other crazy rules.
The SSO is a ETF (exchange traded fund) that mimics the rise in the S&P 500. But like most of our symbols it does so at twice the rate i.e. if the S&P rises by 2%, the ETF rises by 4%. It also does so the other way, this is why protective stops are even more important.
The interesting aspect to this chart is the price reached a new high, but the ROC at the top did not. This a divergence, a warning, if you will, that all is not well. My usual process is to put a trend line on the chart and if the price crosses that trend line, I bring my protective stop to just under the candle that did the crossing. I don’t get out right away because the ROC can recover and return to its rightful place.
In this case we were stopped out at $131.20. The result:
$131.20 – $114.74 (original purchase price) = $16.46 X 120 shares = $1,975.2 gain
Dollar Index: UDN = U.S. dollar falling against a weighted basket of global currencies, UUP = U.S. dollar rising.
We bought UDN per our process. You can see at position one that for some reason the price zoomed up and then fell back. We could probably find the reason for the weird spike if we gave a poopie, but we don’t.
The trailing stop was set .37 below the purchase price and then followed the price skyward. It reached a high of $20.96. The price then fell back by more than the .37 and consequently stopped us out at $20.59. The result:
$20.59 – $20.09 (original purchase price) = .50 per share X 600 shares = $300 gain.
Gold: GLL = DOWN, UGL = UP
We bought GLL per our process after it had closed above the middle line which was resistance at the time. The stop was set just under support at $4.23 below the purchase price of $40.47.
Even though it has fallen in price we have not yet been stopped out.
Oil: UCO = UP, SCO = DOWN
UCO is the ETF which mimics the rise of oil. Oil as you are aware has taken an awful beating. Our process is starting to put together a case for taking the long side of oil. Our last barrier is a zone of resistance. It is a zone because there is a “falling window” as the rice traders termed it.
We need a close above that zone. We would then put a stop-buy just above the candle that does that closing. In the meantime, we shall wait for all our rules to be adhered to before we act.
After all the ciphering the portfolio now sits at: $139,782.10
If you have any questions or comments. please drop me a line at: email@example.com