ETF Trading Research 5/09/2018

Posted May 9, 2018

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

Today was a decent day in BRZU, DGAZ and started out good in USLV and JNUG, but metals and miners fell back to about even for the day and a late TVIX trade breaking the rules didn’t pan out. Believe me, at some point it will in a BIG way. I’m not only calling a double in TVIX, but a triple possibly by October, off the lows when they come. We are NOT at the lows now. I will more than likely avoid all other trades at that point and concentrate on TVIX. This again, is NOT the time to go all in, HOWEVER, we are due for a nice bounce soon that I think can get us 10% easy. I am willing to try a few stabs at it. I thought 6.30 would be spot as 2700 was topping area for /ES but it just didn’t pan out. /ES and TVIX are not correlated right now. We have to look at TVIX on its own merits now. But a bounce is coming.

Look at our green weekly’s and we see that FAS and TQQQ should have been where we concentrated. Why I don’t call a long in them is beyond me. My automated service corrects this shortcoming in me and I get my second look at it this Friday. Personally, I can’t wait, but it has been a lot longer to wait on it than I wanted.

UWT and GUSH started the day off well with oil and DWT and DRIP started to rise when the market topped at /ES 2700.

I do see a lower price in the market coming. From where is to be determined. And when. Have to keep an open mind.

Nat gas data tomorrow and might help the DGAZ cause and maybe we get a dip to speculate a long in the AM. Know your risk.

Economic Data For Tomorrow

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

Stock Market

We topped out at 2700 in /ES so now want to see where we can go and see if we can get the top to be put in and load up on a few shorts. Then I want to get long like metals and miners for the duration and play some hedges against those longs from time to time. Little more patience with TVIX. Should break 6 now and we’ll see what we can do to get long. Like to see 2700 broken overnight and then a bigger move down after more bulls are trapped with /ES. FAS was a good one today too.

Foreign Markets

Watch YANG tomorrow on any market weakness. 2 days in a row on cold corner. BRZU I will keep nibbling away at.

Interest Rates

TMV once again higher as 10 year crosses 3% again.

Energy

Let’s keep a close eye on DRIP tomorrow. Two days on cold corner.

Nat gas we’ll look to buy any dip in DGAZ pre-report tomorrow at 10:30. Especially pre-market. Watch out for market maker games though.

Precious Metals and Mining Stocks

Dollar tried to go more red today but failed. Could have been a scalp. Holding out for more and will hedge with JDST and DSLV if necessary. More confident here on both sides of the aisle right now. We may get one more bounce in the dollar to the 95 area and definitely will need a hedge there, but right now I think metals and miners still rise with a dollar decline and Euro bounce.

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.

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.

Doug Eberhardt