ETF Trading Research 5/15/2017

For those who missed the alert, I wrote this after the market closed on 5/15.

I have one issue with this Trading Service, and I had it the last time I did a mutual fund. I addressed a little bit of it in an alert today and I am still in conflict with it.

When we trade moving markets we have to be leery of reversals and for that matter complete turnaround reversals. This is where we get long an ETF, then instead of taking profit we hold on because of our conviction, only to lose our momentum. I have decided to make a rule for the mutual fund because of this. If it means starting over, then that’s fine as overall we are up on most all our trades and have already locked in profit on UWT. But what happened today was a total meltdown in miners and even though we are still up 6.35% on JNUG and 5.01% on NUGT I don’t like what I saw price action at all. I almost always take a 10% gain on half shares no matter what and today didn’t do that and saw the melt down take our profit all the way down before an end of the day rebound. So to not get whipsawed anymore on a mutual fund, I am only calling the mutual fund for more conviction if we are green on the weekly.

If you recall, JDST turned green on the weekly and still went up 50%+. But gold simply is not joining in on this run. Miners jumped out too far ahead and today was payback I think. If you can trade after hours I wold consider lightening up on the mining stocks. If we gap up tomorrow, no matter what the price I will more than likely call us out in the morning, especially if we see any weakness in metals or strength in the dollar. I am just not comfortable with what occurred today. Not sure if I have seen that kind of move before with gold up, silver up, dollar down all 3 together and have miners just capitulate like that. I know I called a sell in UWT for 1/2 shares and a tight stop on remaining shares as I didn’t see oil moving higher on words out of OPEC. Still might but decided to lock in the quick 7% plus profit and eventually almost 6% on the remaining shares.

I know most of you won’t complain about taking 5% or 6% profit but those of you who subscribe wanting more swing trades were happy I called a mutual fund again. I have said that any new green weekly is a swing trade, with or without me calling a mutual fund, and the last few weeks outside of TQQQ, it has been tougher to see the green weekly’s stick, but I have to be true to the scalping side of me and take the 10% profits too. So you can see the dilemma.

At this point I am calling us out of JNUG here at 18.74 after hours and out of NUGT 34.98. But the official recording price will be the price at open tomorrow, higher or lower.

JNUG is 18.72 bid and NUGT is 34.97 bid. Even for a mutual fund hold, 5% or 6% in one trading day isn’t bad, but even a trailing stop today of 4% would have got you similar returns, so I will take the trade off the table.

Keeping USLV and UGLD for now. USLV is up 4.12% but the spread is too big to exit. UGLD is flat. Will address in the morning.

TMF will keep till morning view as well.

This isn’t me being wishy washy but I can how some may view this. I run this Service so you can profit and if something changes my mind I reserve the right to lock in some good profit and readjust.

Current Positions and Today’s Trades

Didn’t really have the best day with the small trades we made in LABU and DGAZ early on and SVXY our new trade to go long at the open did pan out ok for us. The last 3 trades of the day were small losses and from it comes a new rule (see below) to stop the end of day trading that can get us in trouble, especially with overnight trades. I will still make a call end of day on green ETFs and possibly miners, green or not.   I will be happy if we gap up tomorrow in metals and miners and we can get out of shares with more profit. I simply want to readjust after what happened today. I will still call them for scalps but will possibly throw in some JDST if we reverse course. I will look for profit on USLV and whatever we can get out of UGLD and TMF. I have to take the consequences of such calls and I am locking in a 3.13% average overall if you get the prices below.

 

I have added the following to the Trading Rules; Buying non-green ETFs one hour and a half before close can get you in trouble. First it will more than likely be a losing trade. Second it may force you to hold overnight and making the trade even worse than what it should be. I have seen it happen over and over and have decided to make it a rule to not trade non-green ETFs the last hour and a half of the trading day.

Economic Data For Tomorrow

The data wasn’t great today for the Empire Manufacturing report, but the market didn’t care. This market doesn’t trade on anything today but price action and I hate to admit that price action is all that matters. Up is down and down is up when it comes to data and price will be what we follow.

Tomorrow’s important data is Building Permits and Housing Starts along with Industrial production. Second day in a row of no Fed members speaking.

 

 

Stock Market
If you read yesterday’s comments on the Stock Market you at least know I can see both sides of the table here. I am giving up on the short the market ETFs though like SQQQ in thinking TQQQ would reverse, even though I know AAPL, and the rest are overvalued. I will pay attention to the greens more and let my bias sit on the sidelines. We have 3 new green ETFs tomorrow, including SVXY. We’ll ride them all we can in what the market has left to give us. Just hard to fathom much to me.
I’m personally getting tired of this fall and rise again in the stock market. The whipsaw doesn’t make for good trading or scalping.
 Foreign Markets

Still neutral at present except for YINN which triggered green on the weekly and is a buy at the open.

Interest Rates

TMF still struggling to break free. More neutral right now overall. If we go higher then TMV once again becomes a trade.

Energy

Yesterday I said we would attempt along whatever was up for the day in nat gas, meaning DGAZ and UGAZ. DGAZ was up but it stalled on us. Will look for what is up again tomorrow and see if DGAZ gives us a trend to follow.

Yesterday I said UWT is poised to move higher and we locked in the good profit for the day. Will be neutral at present until I see an opportunity for us.

Precious Metals and Mining Stocks

What would really be bad right now for us gold bulls is gold to fall under 1230 and the dollar to shoot higher. We spend all this time waiting for the right setup and are in good profit today and the rug was pulled from us. Many of you sent me an email and said you still profited and we did get back in near the low of the day on last purchase and rode a V shape reversal back up, but as you read above, I want to play conservative and lock in the profit right now. I just didn’t like what I saw. If for some reason we do have a leg down in miners and metals right now, then I will call JDST and then look forward to another trade in JNUG/NUGT to profit again. Perhaps that one will take us to the promised land. After what they did to us today I am in neutral at present and will wait and see with profit in hand. Hope you don’t mind me calling it as I see it. And glad we got the bounce back up to decent profit.

 

Hot Corner (the biggest movers – 3% or more – or new ETFs that are green on the weekly – those in bold are consecutive days in the Hot Corner):

UWT, RUSL, YINN, SOXL, DGAZ, USLV (3 new green weekly’s; YINN, UDOW, SVXY)

Cold Corner (the biggest moved lower 3% or more that are green on the weekly and or weekly/monthly or turned red on the weekly – those in bold are consecutive days in the Cold Corner):

RUSS, DWT, UVXY, UGAZ, YANG, SOXS, DSLV

Green Weekly’s

These are the ETFs that have turned green on the weekly and the dates they turned green. This is used for tracking your percentage gains so you know when to take profit for each ETF per the Trading Rules profit taking guidelines. It is also used for tracking the percentage from high to keep a stop on remaining shares. These green weekly’s work as you can see from the %Gain/Loss tables. You won’t get the exact high with your trade but you will also be out before typically well before they start to fall again. Your best way to profit with the service is stick with the green weekly trend and take profit while using a trailing stop on remaining shares. 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 one’s at the top of the list by Entry Date) the more likely it is to turn red on the weekly and the opposite ETF comes into play as a long. You’ll notice in the last column on the right it says “Current percentage from high.” This is your normal stop out for any ETF where I don’t specifically call it per the Trading Rules which lists the trailing stops for each ETF. It is a Trailing Stop percentage from the high and I have noticed the pattern that the closer it gets to 5% the sooner the ETF turns red on the weekly.

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