Here we are once again at the weekly round up. This is the time of the week that we take a look at all the charts whether there is trading activity of not.
I know you are anxious so let’s get started.
S&P 500: SSO = UP, SDS = DOWN
It just so happens that we have an open trade for this symbol. The horizontal lines show you that we entered the trade at $77.41. Our trailing stop was set at $71.71. This was $5.70 under the trade price.
As you may recall a trailing stop is one of those wonderful tools that protect us in the markets. I would usually use static stops, but this year has been so volatile and unpredicable, I use the trailing version. I will probably do so until the end of the year.
If I were a new trader or one that is struggling, I would employ a trailing stop at all times.
The trailing-stop like the faithful sherpa has followed the price up to $81.97 where it camped. This meant that our stop was anchored at $76.27 . Now we wait, all atingle, to see if we are stopped out or if the price is going for the next level.
Should we be stopped out, I shall report here in full detail, as always.
As an aside, the value of the trailing stop is on full view here. We started this trade with $5.70 per share of risk. The stop moved up and at its anchor point has reduced our risk to $1.14 per share (High of $81.97 – stop value $5.70 = $76.27)
Gold: UGL = UP, GLL = DOWN
GLL is the proxy in the stock market for gold declining: GLL rises like the Dark Knight as gold declines. As you will recall we use this type of symbol so that you can benefit from the underlying instrument declining without going short. Many accouts do not allow such evil.
Not much happening here. The moving averages have gathered. We can discern that the trend is down because the green EMA (55) is the highest.
We can also see that there is a low to no probability that there is any point in looking at the inverse symbol: UGL. It will probably have that flat look also.
Oil: UCO = UP, SCO = DOWN
UCO is our proxy for oil rising. Oil continues to base, consolidate, waffle, whatever you want to call what oil is doing. It isn’t anything we can sink our trader’s teeth into.
In this type of situation we just sit on our hands and wait for a signal that agrees with our process.
Dollar Index: UUP = UP, UDN = DOWN
You will recall from our mini lesson regarding the ROC and its predictive powers that can happen from time to time when it decides to favour us with a signal.
If you do, you will also remember that as a leading indicator, the ROC, gave us a shout that maybe the UUP was thinking of rising. The verical black line is at a low point in the price, but not the lowest point in the ROC.
The price began to show life.
Unfortunately it was not enough for us. We can be annoyingly demanding. Even though the red EMA (8) and the price rose above the blue EMA (21), the green EMA (55) was still above the blue indicating a downtrend. And one of our rules is not to struggle against the current. We will wait for our engine to fire on all cylinders.
It is interesting to note that the ROC trading method I teach would have triggered us into a trade. All conditions having been met on that front.
This would cause a question in my trading workshops, “which method should we use?” The answer is the one that triggers first and then you follow the rules for that system.
We are sticking to one method only for this exercise as I attempt to prove a point. It shall continue until this year expires.
20 Year Treasuries: UBT = UP, TBT = DOWN
I know, your hearts are all aflutter as we deal with treasuries. The reason we include treasuries and the Dollar index in our stable of trading horses is diversification. If you review the underlying instruments we cover you will find it is a broad swathe of the market place.
You can use these symbols exclusively. Because of their negative correlation (good thing), there will almost always be something going on because they react to different economic stimuli.
TBT is the other open trade we have.
The trailing stop was $1.13 under the purchase price of $16.47. The price has fallen back since we were triggered in. Which, by the way, was literally by a hair. Our stop out is $15.44.
We shall keep our fingers and toes crossed (even though we have to walk funny – it is a sacrifice traders make). that the price recovers.
That is it for me. Watch for an announcement that there will soon be a complete trading course available to you, courtesy of me – you are most welcome.
Click here if you want a course outline. A popout box will politely ask for your email address. I shall make sure you get one and details to a webinar that will make it irresistable to you.
Drop me a line if you have any questions about the above, or, indeed, from your investing world.