ETF Trading Research 5/21/2018

Before we could get out of the shorts from Friday, over the weekend we got news of a breakdown in the tariff wars with China, and the market responded positively to it. We are stuck in a range of 2700 and 2740 and I am still in the camp of higher into the summer, but today LABU gave a false signal moving down -5.82% and TQQQ up +1.75% with SOXL up +3.12%.

I will look to TVIX only if positive. The range for it though is a buy over 4.95 but at this point scalping would be the call down to 2700 /ES. There it becomes murky as to profit potential. If /ES is positive tomorrow, LABU would also be a good candidate, especially if /ES moves over 2740.

BRZU also gave a false signal but I think I should have called it once the dollar went red and it went positive after the fall to negative. It is up just under 1% with a 24.99 ask and I am thinking tomorrow can be a buy if lower and dollar is negative some more. Same with RUSL and YINN, both of which were positive today. There could be more profit here now and I said today we should concentrate on these again.

This overbought situation with DRIP and DWT is hitting extremes now. This is one of those trades where it may pay to buy the hedge in UWT and GUSH until we get the bigger turnaround.

2.71 is still the target for nat gas still as it ignored the fresh green weekly signal.

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!

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.