ETF Trading Research 7/1/2018

There is a definite weakness overhang in this market and I want to at least scalp it before we get long again. And the jury is still out if we get weaker than most think or if we just shoot up after we buy in. We may have one stop out if we do have a reason to go lower, but will buy back at that stop out price and ride it back up. We must keep stops for the reason one can always get a black swan event or something that messes things up. I want to be on the right side of such and try and presuppose such a black swan type of an event, but I don’t see it coming until October. For now, We are up on our current trades but /ES (S&P futures) are up 2.25% to 2723.75 after breaking down to 2718.03 earlier. The 2730/2740 area is resistance. Support first comes in at 2700 and that’s our goal to sell 1/2. If there is any momentum lower, we’ll see during live trading if we want to get a little greedy. Also, watch USD/JPY. It needs to break 110.60. 110.75 as I type. Up 2 cents.

Trump even had talks of tax cuts again for October. Wonder why then? (Midterm elections of course).

I shouldn’t have given up so easily on YINN. But YANG is still green on the weekly and monthly. YINN had a nice day with RUSL and BRZU. BZQ did turn red on the weekly. Want to see if they have any momentum carryover on Monday or if we just fall with the U.S. market, assuming the U.S. market falls of course. Definitely intrigued here.

UWT and GUSH green on the weekly but Trump is at it again trying to get the Saudi’s to produce more and get prices lower.

Nat gas has hopefully a bounce on Monday and we can sell and begin to look for DGAZ entry. Nat gas opened down a penny so far which would put us about flat on the trade to down a hair. See what Monday brings, but I do know it was 95 at Wrigley Field yesterday.

Dollar lower again today. Perhaps we have topped. Like to see dollar continue lower and metals especially higher and it looks like miners are leading metals at this point. Like to see it. Now let’s finally get to making some money into end of July and August. Metals and miners are still a springboard waiting to jump.

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.