ETF Trading Research 7/16/2018

Last night I said about /ES Futures; “Need to see them drop under 2800 and we should see the bigger move down develop.” That said, today was not the bigger move down as we didn’t even break 2790 yet. This means we still might have one last move up over 2800 that could break 2820 before a bigger move down towards 2700 with the Fed reduction of its balance sheet the rest of this month. That pattern is in play and I am banking on it overall. Just wanted to reduce some risk in case we get that last move up. Plenty of profit on the downside of the market to come either way. Perhaps even tonight TVIX makes a run over 40 again. They did allow USD/JPY to close negative, but only by 3 cents. Still a hair cautious but we are positioned for some profit if we do fall and can add to those trades on any intraday bounces if necessary. This does not negate my call to 3,000 later this summer in one last hurrah for the market before a bigger meltdown surfaces.

A few reports ago I mentioned something about bad earnings coming in. I mentioned last week how UBS downgraded NFLX (Netflix) and today we see their earnings results and subsequent stock smack down. We should continue to see earnings disappoint with the stronger dollar hurting a good 50% to 60% of U.S. stocks. We’ll see what Powell might let slip out tomorrow too to get dollar down and gold pumped higher. It’s coming.

Yesterday I said; “RUSL and BRZU are green on the weekly but think we might go down in all markets and their opposites be better trades.” BZQ and YANG did well but RUSL was up perhaps because of Trump’s comments on Russia.

Last night I said; “Liking DWT and DRIP for a bigger move even if we get out with profit on Monday.” We did get out with profit and have to be on the lookout for re-entry for more profit. Data may influence the trade the next couple of days, so let’s be careful with it and follow price action.

Nat gas  ended higher today by over a penny, but UGAZ wsa down 9 cents. Still have to go with nat gas long here.

Still like to see the bigger move set in this week as sentiment demands it as we are oversold. Buy low, sell high is in play. Just taking longer than I wanted.

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.