The Weekly Round – Up is upon us yet again. Those of you new to this most exciting time of the week need to strap in for the roller-coaster you are about to ride.
We have a legend of sorts at the top to give you some idea what is going on here.
We will start with our open position and the trade that closed at the tail end of the week.
The open position is TBT which represents the 20 year treasuries declining. The most recent high is $16.98. The trailing stop was placed $1.13 under the purchase price when we entered this trade. This means the the most recent high has anchored our stop-out price at $15.85. Should the price decline and touch that level we will be stopped out per our process.
In the meantime we will close our eyes, hold our breath and hope that that doesn’t happen – it is how all the best traders do it.
To our closed out position. This was a trade we opened per our process in SSO. This symbol mimics the rise in the S&P 500.
We purchased at $77.41 with a stop at $5.70 under that price. As we may recall, were triggered in by the finest of margins. The high that occurred after that was $81.97. If we subtract $5.70 from that level we get a stop out price of $76.27 or a loss of (-$205.20).
or: $77.41 – $76.27 = $1.14 X 180 shares = $205.20 loss
Our updated portfolio after registering the loss: $142.419.90
This represents a gain of a little over 42% since January 1, 2020. We will continue this exercise of 5 symbols, one simple method until this year mercifully expires. At that time I will keep going, adding patterns and trading with indicators per my course which will launch soon.
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Let’s get to our charts…
S&P 500: SSO = UP, SDS = DOWN
SSO is the ETF that mimics the rise in the S&P 500. We use ETFs as proxies because sometimes we wish to profit from the underlying instrument declining. The problem doing that is that many account types esp. retirement accounts, do not permit it.
As described at the outset we were stopped out of SSO late in the week for a loss. If we get a buy signal again, we shall get back in.
If a trade is triggered by way of a pattern described in my book and new course, I will detail it here – just for fun. It won’t count – good or bad – towards the portfolio. Just as a demonstration.
We will watch for the moment, our hands under our behinds.
Gold: UGL = UP, GLL = DOWN
UGL as with its inverse, GLL has been running sideways for awhile now. You can see that the EMAs (exponential moving averages) have gathered together totally abandoning social distancing.
As time passes the resistance level to the left is losing significance. We are waiting here as well. Patience is a key component of trading. You don’t need to trade every day. One of the silly things that traders do is to place a trade due to the frustration of waiting.
As they say in the U.K., “Wait for it….”
Oil: UCO = UP, SCO = DOWN
The markings for a previous trade are still shown, but there has not been much happening here for quite a while. It is worth mentioning that the lion’s share of the gain this year was the “big one” given to us by the huge decline in the price of oil.
We are sitting on our hands here as well – I am running out of hands!
Dollar Index: UUP = UP, UDN = DOWN
While the Dollar Index and the next combatant, the 20 year treasuries are not going to quicken anyone’s pulse, it is important to note why they are here.
The selection of the symbols to follow was based on all elements of the market place.
Stocks – market cycle
Oil and Gold – inflation cycle
Dollar Index and 20 year treasuries – interest rate cycle
In other words the symbols chosen all react to different economic stimuli. We usually have something going on somewhere within this group.
UDN, which represents the decline of the Dollar Index, or the weakening of the U.S. dollar versus a basket of global currencies is showing the makings of a trade.
We have the blue EMA (21) above the green EMA (55) which indicates an uptrend in this exercise. Since we only trade with the trend, we are looking for a trigger to buy this symbol. We have the price and the red EMA (8) above the blue EMA. Our only impediment at this point is the level of resistance represented by the horizontal black line.
We need another close above that to take action per our process. Should that occur we would place a stop-buy just above the high of the candle that did the CLOSING. Note the capitals to indicate the importance of closing as opposed to crossing and sneaking back over when we are not looking.
20 year Treasuries: UBT = UP, TBT = DOWN
This is our only open trade at this time, as described at the top of this post.
The high on October 23rd has anchored a stop-out at $15.85.
Until we are stopped out by our trailing stop, we can only wish our little trade god-speed.
That is about it for me. If you have any questions, please drop me a line at: firstname.lastname@example.org. Or if you would like to chat on the phone at any time about your trading. I would be most happy to do so – no charge.