ETF Trading Research 7/11/2018

Sentiment matters. Below you are seeing where we are with many sectors and notice single digits in some. Gold and silver not singled digits but got hit today and Dollar up over 80 again. These will reverse. Bonds a little frothy and same with oil. Soft commodities hammered with copper and Lean Hogs both at 7.  Crazy. All that said and done, our green weekly’s aren’t giving us much to go on so have to see if the Fed starts selling or not and what USD/JPY  does. After hours, USD/JPY up to 112.10 as the BoJ keeps up pumping and /ES to 2778.75.  Looking a little bullish. If we hit 2800 overnight, and then tomorrow morning gap up, we have the setup for the big fall into next week and options expiration. Might be a little pain before the gain. Or we get a Tweet and maybe take what market gives us. Either way, as I said, I am relying on the bigger than last 2 months Fed unwinding to put a cap on this market. It’s a fight literally between that and the BoJ ramping USD/JPY. Last 2 months the Fed capped the market (/ES) after it higher highs.

RUSS looks like a good bet for tomorrow. 3 days in cold corner and down again today. Due for a bounce. Could have went 1/2 shares today.

I said yesterday that DRIP and DWT should be on our radar to buy today and we took a shot on DRIP early where I said I wish I could just keep a wider stop, but didn’t and we stopped out. Then for DWT I left on a trade to buy and it did trigger, on a report where it fell like it should have, but it rebounded quickly. I got out an alert to just keep it at 6.29 and the buy was 6.20 with a .10 trailing stop and it never triggered most of the day as oil fell. We got out and it fell from there. Neutral right now. But UWT did turn red on the weekly so we have to lean DWT. GUSH has not turned red on weekly.

The move up in nat gas has not got us out of the DGAZ green weekly yet but it might tomorrow. We should buy the dip in UGAZ as we are in a trend change on a micro basis. However, will be cautious with this as I want to concentrate on the market calls.

Pathetic performance for metals and miners. They are unwanted and waiting for a catalyst to get them going. We could have further to go south and bottom and then a fast move up. Will hedge if gold breaks 1240. So far, JNUG has moved up to 13.60 again after hours.

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.