ETF Trading Research 2/20/2018

Posted February 20, 2018

For those of you new here, I most of the time have the ETF Trading Research report out by 8PM PDT, and it comes by an RSS feed, but you can look at the report here sometimes before you get it in your mailbox; https://illusionsofwealth.com/category/etf-blogs/ This is also the same link if there are any technical difficulties.

Today’s Trades and Current Positions (highlighted in yellow):

The day started off slow and many times the last few weeks I have just taken the profit and gone home flat. But I think the dollar moves higher and we can get more out of DWT and JDST and wanted to take that chance. DGAZ wasn’t quite ready yet so we got out of it and TVIX got us some profit end of day. We also got out of it in a timely fashion. For a professionals day, we’ll take it. TMF is ready to go (I know I have said that a few times, and we are in a range and just needs to bust out). A 10% move is coming I think.

Sentiment as you can see below is falling for all the currencies that make up the U.S. dollar. I don’t know how anyone can be a dollar bear right now. It won’t shoot straight up and we hit that first resistance level from last night’s report about perfectly. Let’s get on to over 90 now and the next resistance level and bigger profits in DWT and JDST.

I will be including price of gold and everything else summarized below from now on.

Economic Data For Tomorrow

Big one tomorrow is FOMC meeting minutes in the afternoon. We have to make some decisions possibly before hand on things, but I don’t see much stopping the dollar bounce. Most everything may already be priced in. That said, I have learned to be conservative on Fed weeks of interest rate announcements as well as minutes release.

http://www.investing.com/economic-calendar/

Stock Market

Yesterday I said; “Any bounces may be short lived and I think TVIX is still a trade long or SQQQ might pop too. I would buy either if the market is negative.” Seemed to be the case today. Should be a little crazy tomorrow.

Foreign Markets

Still somewhat ignoring these for now.

Interest Rates

We got the red weekly yesterday in TMV so TMF should have moved higher. Perhaps just delayed by a day. That’s why I am not giving up on it. I expect a very nice bounce.

Energy

Move under 60 is coming for oil and DRIP may be the trade now too. Remind me in case I forget. It did try to shake us out and the rest of the day moved up.

Nat gas is a tough one and I got us out flat as we wait for conviction one way or the other. We get a minor move off the bottom but pulled back quickly.

Precious Metals and Mining Stocks

I’ll repeat what I wrote yesterday; “Still about the dollar here. Gave us a good trade in JDST on Friday. I expect the dollar to move higher. So far I have been right with bullion banks pushing gold lower as the Chinese are on vacation. Dollar is presently 89.21 and over 90 should be up next. Look above for the gold support levels. 1309 is next and that’s a long way from present price of 1346.”

We cut that move quite a bit today from 1346. I think we can get to 1309 but the FOMC minutes might cause a little uncertainty on its way. Dollar to over 90 is what we need.

Please note the new green weekly’s for DSLV and DGLD. But also we may have to be a little cautious with 2 days in a row of JDST, DSLV and DUST being in the hot corner. We can get 3 days but hardly ever 4. So we might have to take a day off and take some profit. A good time to do that if we are up nicely might be before the Fed. I will more than likely call us out 1/2 shares but only if up nicely. If we get a pullback in JDST before the FOMC minutes are release, I will more than likely hold through the minutes.

Green Weekly’s

These are the ETFs that have turned green on the weekly and show a trend has developed. Your best way to profit with the service is stick with the green weekly trend each day and take profit while using a trailing stops. Also, if these green ETFs are up for the day at the open, they offer the best scalping opportunities. I am always fine tuning this section so if there is confusion at all, email me and be specific and I’ll be happy address.

I know I have said this many times but it is worth repeating; If you stick with the green weekly trades your odds of profit increase as there is more risk with the day trades. I call the day trades with the intent of catching some runners, so will get a few 1% stop outs but eventually catch the 5% to 10% or more runners. The important part of the list below is that the longer the ETF stays on the list the more likely it is to turn red on the weekly and the opposite ETF comes into play as a long. This will be tracked more when we automate the service.

Sell half shares on a spike up on any ETF you are long, even if goal is higher. Spikes higher are almost always followed by moves in the opposite direction. Try and get out with a market order quickly before the quick move back lower. Lock in that profit!

Wait for the sign of a positive day to go long anything beaten down, I think the odds swing to your favor.

New way to trade beaten down ETFs; The way that trade would work, and I really think it should be a rule from now on NOT to trade anything trending down until it reverses, is we would buy at the open if it is POSITIVE or GOES POSITIVE during the day. Then we would look to profit on 1/2 shares over and over, day after day until we get the red weekly signal on the opposite trade that could turn into bigger profits. The stop would be if it goes negative for the day. The rule of keeping a stop if it goes negative for the day is a must. Lastly for this type of trading we need to not be afraid to get back in if it goes positive once again. Sometimes market makers will take an ETF negative and then reverse it right higher again because they know if it goes negative many exit. So we have to be willing to risk a few in and outs when it does this up and down move around that potential stop out area so we don’t miss the ride back up. That’s just part of trading and not a big deal. But no matter what, if it breaks to yet another lower low because you didn’t get out after giving it a little more wiggle room, you are more than likely further from the original stop out when it went negative and you are out, waiting for it to go positive again before you get back in. You are simply buying into strength.

Doug Eberhardt