The most exciting time of the week: The Weekly Round UP. Maybe not that exciting as the main markets skived off at the tail end. Ah, well, we will still take a look at all the charts, regardless.
As you are aware this THEORETICAL trading exercise continues one started in my barn burner of a book: Basic Trading: ‘A Beginner’s Guide to Trading and Investing …PROFITABLY!’
We use 5 symbols derived from the futures representing: The S&P 500, Gold, Oil, 20 year treasuries and the Dollar index.
We use UP and DOWN stock market symbols so that all may participate if they so choose, no matter the make up or restrictions their accounts may have.
We use a very basic system to demonstrate a point. It will be explained as we go, either today or when we have a trade. You can also look at other day’s entries if your OCD is too much for you.
The portfolio started in the book at $100,000 January 1st, 2020. It currently stands at $138,720.10.
This is thanks to one great trade. I want to reinforce the idea that the market does not move in nice averages, it spurts. You need to take all trades per your process and make sure you protect yourself with stops.
The S&P 500 for example took 13 years to exceed the level it attained in 2000. Many would say, “but look at is since, it has doubled”. It has but how many lost patience especially after having their heads handed to them in 2007/8.
I cannot emphasize enough the importance of consistency of action and following a process.
This mission we are on will continue until the year 2020 expires. For most of us, none too soon! We shall see how we do. All is revealed. If you have any questions, objections or concerns, please drop me a line at: firstname.lastname@example.org.
To the charts, Robin…
S&P 500: SSO = UP, SDS = DOWN
The SSO is the ETF that mimics the rise of the S&P 500. You can see that the blue EMA (21 Exponential Moving Average) is above the green EMA (55). This denotes uptrend in our process. We will trade if we get the go ahead from our triggers: price and/or red EMA (8).
We have it. Our problem is a resistance level just above. We need a close above that level before we act.
Gold: UP = UGL, DOWN = GLL
The UGL mimics the rise in gold. You can see we have all systems go in our chart. We needed a close above another pesky resistance level to go ahead. You can see we got that. We have a stop-buy in just above the close of the candle that closed across the resistance level. It is at $ 65.37. A rise by UGL above that price will see us triggered in.
Oil: UP = UCO, DOWN = SCO
UCO is the ETF that mimics the rise in oil. Oil has been an interesting story. First of all it collapsed like no one’s business. It has based or consolidated for a while and may now be attempting a comeback. As with all matters in this exercise we don’t really care. We wait for all conditions of our process to be met to act. In this case we have a zone of resistance that needs to be closed above before we act.
Patience is a big part of trading.
Dollar Index: UP = UUP, DOWN = UDN
UDN represents the down of the Dollar Index. This one is a bit different in that the Dollar Index is a struggle between the U.S. Dollar and a basket of global currencies. If the price rises the dollar is increasing relative to the basket. If the price declines, the basket is rising in value against the U.S. dollar.
UDN is hovering betwixt and between. We need all our conditions to be met including a breaking of resistance to place a trade.
Remember that as with all our symbols we are looking at the inverse as well for trade signals. It makes sense that if one side looks like it might be a sell signal, that its inverse just might be a buy, At the very least, warrants a look.
20 Year Treasuries: UBT = UP, TBT = DOWN
This is the one symbol that is actually an open position. At position one you can see that the price rose above the close above the resistance level, we were triggered in. We have a trailing stop placed at $16.94 under the trade price, which was also just below support. Below support is usually a spot where we are wrong in our trade for the simple reason it means our trend maybe violated.
That is all for today.