Market Close May 12th, 2020 APPLE

It seems that none of our prospective trades have triggered this evening. I tend to spring into action like the proverbial panther after the main market has closed.

Just before our Blog took a little twist, a trade had been triggered in Apple.

I thought this might be a good time to show you how I would handle the follow through for that trade. The profits will not be added to the current Blog portfolio since it is from the previous edition.

To the chart, Robin…

Apple

The buy was executed just above the resistance line you can see at $292.00. This was after the price had closed above our moving averages after flirting with the 21 EMA (blue).

As is the case quite often, the price will run after breaking through resistance because that is the spot a number of buy orders will most likely have gathered. This is why support and resistance levels are such important tenets of my book: Basic Trading: ‘A Beginner’s Guide to Trading and Investing…PROFITABLY’.

The price has had a little run and is now looking at the overhead supply warily. This is reinforced by the fact that the latest high in price has not been matched by a new high in the ROC in the panel below. In fact there is no new high in either momentum measure. This divergence is identified by a vertical black line.

I treat this kind of divergence as a warning and begin to batten down the hatches. It is only a warning. The momentum measures could just as easily return to their tracking of the price in their usual fashion.

I have put trend lines under the price – as is my habit – and put a trailing stop at $307.24. This level represents a level at which the price would cross my trend line. I will be out of this trade.

The trade is protected; the minimum profit is $15 per share. If the price happens to take off, we shall be there. If it falls back, we are out.

This trade in Apple is now complete from our theoretical point of view.

Maybe we will have some action to report after tomorrow’s close in the symbols we are following. As always, we will wait for a signal.

If you have any questions or comments, please drop me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles

Stock Market Close May 11th, 2020

We took an exciting turn yesterday when I decided to change the theoretical portfolio we have been trading to carry on with the portfolio in my book: Basic Trading: ‘A Beginner’s Guide to Trading and Investing…PROFITABLY!’

I started in January 2020 and finished in the book April 30th, 2020. There are five instruments involved.

None of the on deck potential trades yesterday triggered, so let’s use this time for bit of a review.

Each instrument is a major component of the market place. And as such they have an ETF (exchange traded fund) as a stock market proxy. We do this because most of you – esp. beginners – don’t have futures accounts or the ability to sell short. Not that you don’t have the ability, it is more the restrictions of retirement accounts and the like. A feature of these symbols is that 8 out of the 10 are double up. In other words, the underlying instrument, say gold, goes up 1%, the symbol UGL goes up 2%. Of course, if you owned the inverse GLL and gold went up, it would go down 2%. It means the use of protective stops is paramount.

S&P 500 = SSO (UP) and SDS (DOWN)

Gold = UGL (UP) GLL (DOWN)

Oil = UCO (UP) SCO (DOWN)

U.S. Dollar Index = UUP (UP) UDN (DOWN)

20 Year Treasuries = UBT (UP) TBT (DOWN)

As trades trigger per our method, a chart and all trade details will appear here. As before, a weekend round up of all charts will appear at some point at the end of each week – trades or not.

You could use the methods and simple tools found in the book and as we go along here, to trade profitably, indefinitely!

If you have any questions or comments, please drop me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles

Your Trading Blog to May 8th, 2020 with a twist!

So, I have had an idea that is so clever you could put a nose and tail on it and call it a weasel!

Here it is: I have just finished editing a ground-breaking opus of a book, “Basic Trading: ‘A Beginner’s Guide to Trading and Investing…PROFITABLY!'” In that magnificent work there is a section that has been cleverly called, ” The Putting It All Together” section. In this bit, I have tracked the fortunes of five market instruments, trading them per the precepts of my almost biblical tome from January 1st, 2020 to April 30th, 2020.

It occurred to me, that with just minor adjustments, my theoretical portfolio could carry on where the book leaves off.

If someone has purchased my book – it could happen – they may find it helpful to watch trades unfold in close to real time. Well. at least in the next day or two.

The instruments are: S&P 500, Gold, Oil, 20 year treasuries, U.S. Dollar Index. We will look to the UP and DOWN ETFs for signals and detail them here.

On deck:

UUP + $27.26

UGL + $64.18

SSO + $114.78

The symbols noted above and their prices are stop-buys. If they trigger, a chart and all the details will appear here.

The portfolio started on January 1st, 2020 at $100,000. As of April 30th, 2020 it had risen to: $ 138,528.90.

I can send you a list of the trades that are responsible for this gain if you like; you don’t need to buy the book.

Just drop me a line at: charlesgoddard2020@gmail.com

That’s it for today. I will add anything that needs to be added due to this slight change as needed.

TTFN,

Charles

May 6th, 2020

There will be a brief interlude in blog posts as I ‘pivot’ a little bit.

I am just about finished editing Basic Trading: ‘A Beginner’s Guide to Trading and Investing…PROFITABLY!’. In that roller-coaster of a book I have demonstrated trading using basic tools and methods. I started January 1st, 2020 and ended April 30th, 2020.

There are five market instruments only being traded: S&P 500, Gold, Oil, U.S. Dollar Index and 20 year Treasury Bonds. We actually use ETFs (Exchange Traded Funds) that mimic the movement of the underlying instrument: UP or DOWN.

Starting Monday, May 11th 2020 I will carry forward with that portfolio.

Stop by and take a look.

TTFN,

Charles

charlesgoddard2020@gmail.com

Close of Market May 4th, 2020

Here we are at Monday once more. Except this one has the Fourth with it!

To review the most recent charts, please scroll down. There will be none today, nothing exciting happened.

In fact we won’t comment on anything other than to say something about Apple. We have an open long trade in Apple that is still in place at writing.

Even though I am not going through all the symbols tonight (not much difference from the weekend round up) there is something exciting to discuss. We are refining our process just a little. Recently we added Resistance and Support considerations to our decision making. Today we are going a step further.

Normally our rule for entering a trade is the trend must be with us (yeah, yeah, like the force, if you must). So the price or 8 EMA (red) must close above the 21 EMA (blue) while the 21 is above the 55 (brown or green). This is because moving averages do have a bit of a lag to them. We have offset some of this by using exponential moving averages.

What the heck, let’s look at a chart.

GLL

We are looking at the chart of GLL. This is an ETF that we use if ever Gold gives us a shorting signal. Since shorting something is not always convenient, we use GLL. This is also a double up symbol: whatever the underlying (in this case gold) does, GLL does twice as much.

You will note, around position 1, that the candle has closed above the blue EMA while the green EMA is still above it. Normally this would give us pause. Actually, more than pause it would stop us in our tracks. With our new refinement, we will enter the trade once the ROC (rate of change) is above 0.

You can see that there is one candle already closed above the 21 EMA (blue), but the blue is below the green and the ROC has not crossed above the 0 line. The next day, the ROC obliges, all of our conditions are in place. The trade is placed and a trailing stop is placed at position 2. The high of the chart anchors the trailing stop and as the price falls back, we are stopped out at a loss at position 3.

A couple of things. I don’t wait more than three days for all the closings, etc that I am looking for to happen. It is a sign of the strength of the move if everything doesn’t come together in a reasonable amount of time.

The other thing is the ROC doesn’t have to stay above the 0 line. As long as the blue has been closed above and the ROC has closed above the 0 line.

Sadly, this trade was stopped out at a loss. The take away here is that we take every trade no matter what is on the TV, in the newspaper or yapped at us by our friend, Murray. If you do not take every trade and follow the process, you have taken control of the vehicle and that is not good for anyone.

Any questions or comments, please direct them to: charlesgoddard2020@gmail.com.

TTFN,

Charles

Weekly Roundup to May 1st, 2020

Well, it is the weekend and I can’t feel my face. Hilarious, right? I know! You are most welcome!

It is that time of the week that we show all charts regardless of action or not. Our trade in Apple continues; the trade in EUO has been stopped out at a small loss and our portfolio balance adjusted accordingly. Let’s get started.

S&P 500:

S &P 500

The S&P has wandered a bit the last few days, neither here nor there. From our definition of trend, you can see the blue EMA is below the brown. This is a downtrend for us. Our triggers: the price or the red EMA need to close below the blue for us to spring panther-like into action.

Oil:

Oil

Oil continues in a determined downtrend per our moving averages. The blue is below the brown; the red is below the blue and the price is below all of them. Oil’s commitment to weakness remains strong. Reasons? We don’t care. If oil turns and gives us a buy signal, we will be in without any more thought than when we went short on a trade signal. We are traders: ours is not to reason why.

Gold:

Gold

We did have hopes for gold. Fortunately we don’t act on hopes. Even if UBS says gold is going to $3,000. If that is true, we will get actionable signals along the way. In the meantime, that is the kind of headline you need to ignore.

We can see from the chart that we are in an uptrend. We did have a buy signal and had a stop-buy in on UGL – our stock market proxy for gold – just above resistance. Gold just would not go through. Maybe it will get there, we shall wait.

Bitcoin:

Bitcoin

Bitcoin is my attempt to give you in our list just a few symbols to follow that cover a lot of the market place. Crypto currency and blockchain technology is really just starting. The status quo will be putting up an even greater fight as their ability to line their nests with unreasonable profits is being threatened.

The chart is telling us downtrend, but we can see that the three moving averages and the price are beginning to fuse together. This can result in a lovely, actionable signal for us. More as it unfolds.

USD/EUR:

USD/EUR

A currency pair. As the price rises, it means the base currency (the first one in the pair) is stronger. If the price goes down, the second currency has the upper hand.

We did have a trade in EUO, our stock market proxy. We were stopped out as EUO hit a low on Friday (1st) of $27.86.

In summary: a high of $29.12 anchored our trailing stop at $27.86. We had purchased 350 shares at $28.51. Consequently our loss is: $28.51 – $27.86 X 350 shares = ($227.50)

Our revised portfolio balance $118,901.3

Apple:

Apple

We were triggered into a trade at $292. Our trailing stop was placed just under support at $264. The high in Apple at $299 dragged our stop up to $271. My concern was the various levels of resistance to the left of our trade. The falling window (gap) is one of those levels.

At the moment we remain in this trade.

Any questions or comments, please drop me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles

Market Close April 30th, 2020

Look at us getting the date right today for a change. Sorry about that. I shall endeavour to not let that happen again.

According to my charting software the U.S, markets have just had the best month since 1987. If you have been following what we are doing here with our simple trading system, you can see how useless that information is to us. And why you should not be paying attention to it. All it does is affect your decision making. If I said to you we have a signal that says we should short the market, could you do it? Many of you could not.

Let’s start there…

S&P 500:

This index is showing in a downtrend by our definition. The 21 EMA (blue) is below the 55 EMA (brown). The price has shown some strength today, but not enough to give us a trade.

Bitcoin:

Still in a downtrend as the 21 EMA (blue) is below the 55 EMA (brown). Like the S&P, Bitcoin has shown some strength today.

Gold:

Continues to display uptrend, but just refuses to take a run at resistance. Today the price of gold dropped about $40. So our UGL trade remains ready, vaulting pole in hand for the rise that will put it over the top. UGL, of course, is our stock market proxy. We will keep the trade on the books for now.

Oil:

What is there to say about oil. The downtrend is still strong with this one. The price however has decided it likes the $8 dollar level and has taken up residence there for several days.

As an aside, I do have a bullish set up in a different technical tool, but it is a long way from a trigger. We won’t be using it on this portfolio.

USD/EUR:

This currency pair took a beating today. The price crossed below the 55 EMA. The trend, however, is still showing up – the question is for how long. I did fear for our stock market proxy, EUO, but you will be relieved to hear that our trade is hanging on by the skin of its teeth.

Apple:

As mentioned yesterday, a pending trade was in order and all we needed was a move to trigger it. To the chart, Robin…

APPLE

The price closed today at $293.80. Our stop-buy was set at $292, which was just above the most recent resistance.

Based on our rules, the trade looks like this:

120,000 portfolio (roughly) X 10% = $12,000 / $292 = 41.09 shares rounded to 40.

The trailing stop would be placed at $264 (just under recent support) which is $28 of risk per share X 40 = $1120 of total risk which is under the 2% risk level we allow ourselves ($120, 000 X 2% = $2400).

As mentioned, if Apple moves up, so will the stop. Details as they unfold.

If you have any questions or comments, please drop me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles

Market Close April 29th, 2020

We start today as always by looking at the Futures. This is not one of the contracts, I use the cash price.

Scroll down if you wish to see the charts. My weekly round up shows all the charts whether there are recent trades or not.

S&P 500:

Not much to report here yet again. It is in a downtrend based on our definition: The 21 EMA is below the 55 EMA. The price has shown some strength today. Maybe we will see a change of trend in the coming days.

Bitcoin:

This is still in a downtrend, 21 EMA below the 55 EMA. The price, like the S&P, has had a good day.

Gold:

Gold continues to display uptrend: the 21 EMA is above the 55 EMA. All we need to enter a trade is a push through the resistance that has formed at roughly 1735. Our stock market proxy, UGL, stands ready to spring into action should the onslaught take place.

Oil:

What is there to say about this sad sack. The trend continues to show down. The price has been stalled at around the $8 mark for awhile.

USD/EUR:

This currency pair is still in an uptrend. The only open trade we have at the moment is our stock market proxy, EUO. We have a trailing stop standing guard. It is looking as if the resistance level is too strong for bullish forces.

Apple:

Apple had a strong day. To the point that the chart is giving us a buy signal.

Apple

Let’s go through our check list:

The 21 EMA (blue) has just crossed above the 55 EMA (green) and the price and the 8 EMA are above both of them. We will put in a stop-buy just above the black horizontal line at $292.

The protective stop will be just under recent support at $264.

As soon as this trade triggers, I will detail the amounts etc. per our rules.

Any comments or questions, please drop me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles

Stock Market Close April 28th, 2020

S&P 500: Has not advanced our cause since yesterday. The 8 EMA is now fused with the 55 EMA and the price is above it all. If the 21 EMA crosses above the 55 EMA, we shall be looking squarely into the eyes of a long trade.

Gold: has bounced off of resistance while displaying an uptrend and is having a little think about what to do next. Our stop-buy in the stock market proxy, UGL, is still in place. It is holding at support at $60. Our buy is for $64.75.

Oil: still in its downtrend. it has held at support around $8 or more precisely, $7.80. There has been much wringing of hands regarding oil, but it warned us that it was in poor health as early as January, 2020. Let’s take a look at the weekly chart.

Oil

As I tell my students, a divergence will not always conveniently appear, but when one does, one must pay attention. The dates have been cut off my clip, but the last high from the right is not matched by a high in momentum (Jan 10th, 2020). (Black arrows). This is a set up. We only take action on the trigger which can be the crossing of a trend line, or one of the horizontal lines at $50 or more conservatively at $40. It turned into a lovely short trade.

USD/EUR: this pair is still in a clear uptrend and we remain in a trade in the stock market proxy, EUO. It continues to flirt with resistance. I prefer to watch from the sidelines. It is why we added support and resistance considerations to our decision making. I like to place stop-buys (or sells) just above resistance (or below support). We shall suffer for now.

Bitcoin: the 21 EMA, 8 EMA and price have fused together under the 55 EMD. As mentioned yesterday, we cancelled our stop-sell on the stock market proxy, GBTC.

Apple: This is a symbol that I think we will allow ourselves to explore other aspects of technical analysis, but only place trades from the moving averages.

Apple

Look at this beautiful Point and Figure chart. To the right hand side there is a buy trigger shaping up. If another x were to appear to the right of the other two columns we would be buyers. In fact, the pattern here is telling me that if the price could close above $305, it would most likely make it to $360.

On our regular chart, however, there are a couple of resistance levels that would give me pause. Our lesson for today is simple; that if you are using a couple of methods to determine your trades, the one you use is the first one to trigger. You then follow your process that goes with that action.

We, however, while mooning over the Point and Figure chart, will only use the rules of this blog to enter trades.

Any questions or comments, please drop me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles

Stock Market Close April 27th, 2020

Example Only

It is Monday again, but the days feel as though they are blending. If I didn’t have to put the date at the top of the page, I am not sure I would know what it was.

We will whip through our symbols and then have a deeper chat about Apple than we normally would.

S&P 500: This index is still in a downtrend. The price and the 8 EMA are moving above the 55 EMA.

Bitcoin: We have a short trade in on the stock market proxy GBTC which we shall cancel. This reinforces the concept that we place our trades above resistance and below support. The price has started to move up.

Oil: The price of oil still shows a downtrend. It has stalled at support around the $8 level.

USD/EUR: This currency pair is still in an uptrend. The stock market proxy, EUO, has been rebuffed by resistance, but not enough to stop us out.

Gold: Still in an uptrend. We have a long trade ready to go in the proxy UGL. We need a little more upside to trigger us in. Should that happen a chart and details will appear.

Apple: Let’s take a look at some other aspects to analyse the Apple chart.

Apple

First of all, I have placed a Fibonacci retracement on the price movement. The down leg can been seen to have rebounded to pretty much exactly .618% which is what we would expect it to do. The question now is can we figure out what it is doing next? Using our moving average crossover system as with others, the bigger picture doesn’t affect us that much. I thought it would be an interesting exercise to take a look at a couple of technical analysis techniques.

So, from typically following a rebound of about 62% of the down leg, we can normally expect a zig zag pattern to be completed by another down leg of the same severity as the first one. In the Elliot Wave parlance an ABC correction of the uptrend. My alarm bells go off if the price continues to rise and exceeds 70% of the down leg.

We now look to the RSI for confirmation. Most people use the RSI as an overbought oversold indicator which I don’t find particularly helpful. This is because there can be an overbought or oversold condition for a very long time before anything changes with respect to the direction of the price.

I look at the RSI as an indicator that tells me if we are in a bull or a bear market. I learned this method from Constance Brown. I see Apple in a bear market if the RSI reading remains between 20 and 60; a bull market if it is between 40 and 80.

If you look at the chart above you will note that the recent rise in Apple has not caused the RSI to rise above 60. If you look to the left you will see that while Apple was in a bullish rise the RSI bounced between 40 and 80. Now we have 20 to 60. So if we were to put some shekels on this, I would expect Apple to decline in price.

I will go short if the moving averages instruct us to do so per the MO of this blog.

Any questions or comments, please drop me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles