ETF Trading Research 5/21/2019
On FOMC week, the smart thing to do when there is no real direction is to go home flat. I didn’t do that last night and again tonight on the bigger move up in /ES on “news” from the Trump administration that the U.S. will delay anything related to Huawei by 90 days. Google then reversed what they said yesterday and are going to do business still with Huawei.
Markets the entire day were in a tight range and while we did attempt a long with success in SOXL, there was no follow through to higher highs. We then concentrated on a few shorts but no luck. End of day you could see the struggle I was having and chose a side to where I hope we can add to a winning position tomorrow morning on more negative news overnight as that seems to dominate the last couple of weeks. We are only in half shares and only 4 ETFs again so reducing the risk to the downside. With the VIX under 15 again, it is normally a buying area and should be with all that is going on in the world. Any moves up from here are limited unless we get more buying signals. We didn’t even get a sell signal in SOXS today. We did however get sell signals in BZQ and TMF, painting a more positive move potential developing. If I get more signals to sell tomorrow, then I will.
/ES is down -1.25 points after hours to 2865.75 as I type. We don’t know what the market brings to the table tomorrow but expect volatility as I have been saying all week FOMC brings.
JNUG did move up off the lows and I expect to be volatile as well. I would like to see one more move down to begin getting long if we can get it. We will then have to sit through some volatility possibly if we do get long as I also see miners getting hit with the overall market downturn that eventually will take us below 2800. We just don’t know from what high on this current run that will come.
We have to rely on my nightly report and will adjust accordingly. I may be taking a little more risk in active trading than normal, with the nice returns we got from Monday, but I also have to believe that we can get going south rather easily if we can break 2855. The jury is out on that. We break 2870.75 though and the bulls take over. If we were flat, we wouldn’t care. I said to hold off if conservative and go short if we break 2855. Still say that.
Let’s see what news drives this market before FOMC and if we take some profit before FOMC or hold on for a wild ride during if positive on our trades, or take a small loss in the morning if we are breaking higher. I won’t add to these positions if we are breaking higher, but will keep a stop and readjust. Will then be flat into FOMC except for possibly a gold miners trade. I will be adding SILJ to my watch list to trade now that silver has got hit even more. Silver should lead gold on the next move up.
As I was typing this nightly report, I decided to sell and reduce risk. It to me is the right thing to do. /ES had a slight move up and I just don’t feel the necessity to take on the extra risk right now.
Easier to adjust after we break some target prices.
UGAZ did go to a sell today, giving us permission to buy DGAZ here or on any dip.