ETF Trading Research 7/9/2017

Posted July 9, 2017

Current Positions and Today’s Trades

Many of you who have been with me awhile know I never let trades go more than -5% loss but a few times. Of course the losses in the first the below are worse for some with the stop outs too, all because I went against my own rules as I have said. But with the end of day turnaround, the losses were decreased and I expect soon enough these losses will turn to gains and then really nice gains. If the saying is “buy when there is blood in the streets,” then Friday was pretty bloody. So here is what I have done. I have come clean with the green weekly’s on the sheet below and will make a promise to you I won’t let that happen again. I simply ignored the data which is a mistake. The green weekly’s below are not new, btw, they are just up to date as of today. They are NOT new buys, but can be however treated with the rule of buying if they are up for the day at the open with new stops. I am sitting on these trades below and this week we should turn positive on them. In fact, I will make JNUG and NUGT and USLV my trades of the week. There is a chance we get one more pullback on Monday into Tuesday and get gold to $1,200, but it will be short lived. JNUG could get into that low 14’s level and from there buy anything gold and silver related, IF we get there. I would prefer just to have a nice 10% up day and get the bottom established. To do that we’ll need the USD/JPY to fall as it has been a true indicator of miners direction. Much more so than the dollar.

We did get a good trade out of DRIP for 5% on half. I chose not to play the JDST trade as I actually pre-market had a trade in to buy over 72 but by the time I finished writing the pre-market update, JDST moved over 72. It would have been a good hedge as it moved to 77. That one hurt as I just missed it and have to get those trades out to you sooner rather than just write the whole pre-market report if necessary. The other thing was after the GOOD data with non-farm payrolls, gold miners actually move UP and lured me into a false sense that we would actually go up on good news. Obviously that wasn’t the case. The good news in my opinion is I am confident in making calls and one mistake is not going to pour over into more mistakes as it did last week when I over traded to compensate. I am getting back to basics with the green weekly’s and any NEW green weekly’s, prepare to profit, lock in 1/2 that profit, and let the rest ride. But for metals and miners, when they do take off, no, I am not looking to lock in 1/2 shares profit quickly.

For the final bullish analysis on miners, read the section below titled OBSERVATION.

Economic Data For Tomorrow

There is no real economic data until Tuesday’s JOLTs Job Openings.

http://www.investing.com/economic-calendar/

Stock Market

We’ll go with the micro plays until we get direction. Friday might have been a bit of a euphoria over the good non-farms payroll data, but the Unemployment Rate ticked higher. Even though the media didn’t concentrate on this number, to me it is significant. You can’t claim a strong economy on the way down in the Unemployment Rate and look to that data as justification for it and ignore that data when it goes higher. 4.3% might have actually been the best number we have for years in Unemployment. If the economy turned here, the Trump Effect might get turned on its head. I have said well before Trump got elected that the worst thing that could happen to the Republican party, who doesn’t have a fiscal bone in their Congressional back, is having a Republican win this election. In my humble opinion, as much as President Trump lays claim to the good economic data when it comes out, he and the Republican led Congress, both the Senate and House, will take the brunt of the blame of any crash, should it occur, for decades to come. It actually may be the end of the Republican Party as we know it if this were to occur. Yes, I am writing a book to break the nation together instead of divide it, as many of you know, but that book is about how Left vs. Right isn’t as important as We the People vs. the Left and Right for the betterment of the People. We have lost control and I propose we take it back without being divisive. A tall order, I know, but I have a dream! And I have been working on that dream for over 10 years now and it will come to print soon enough, without being labeled a racist, homophobic, Evangelical, anti-Semite, or any other label the media tries to put on me or my work. I will trump them before they trump me! (that’s called a pre-supposition for you NLP experts out there). There’s a method to all I do in bringing awareness in my writing, whether it be here concerning investments and my own struggles with perfection, or that of a bigger political picture. There can be a Utopian society if we have a better instruction manual. But some of us will need to re-frame our thinking. We all need a reality check from time to time and mine was this week with my trading, so look forward to a better next week.

Foreign Markets

I’d have to say YANG held up pretty well considering the markets took off higher. Any downturn in the markets and YANG can take off. Been waiting for it, but we have some CPI data overnight that can tell us the direction we’ll be headed, good or bad.

Interest Rates

I am sticking with TMF because of what I see coming. It should move up with gold. The scenario is the Fed is wrongheaded with raising rates. The market will see this BEFORE the Fed and TMF will be what convinces us of our take on the Fed being wrong. The market doesn’t lie. Only Congressmen when their lips move.

Energy

Oil did a flip flop today, from bullish to bearish. OPEC and their telling a couple countries to curtail their production aside (something that countries won’t do if they need to pay bills), the data came out negative for oil too. It’s a bull vs. bear fight but DRIP got us a good trade and we have to lean slightly with DWT at this point. Storage data out Tuesday.

I am hoping we have a 6 cent drop in Nat Gas on Monday morning as a gift to start building a long position in UGAZ. We will buy that dip, but I want to make sure we don’t have any extra wiggle lower too. The 52 week low is 2.522 and I don’t think we head to that low, but 3.99 is the 52 week high and coming up short of the 52 week low here might give us a very good bullish move. We will look to get long at the appropriate spot.

Precious Metals and Mining Stocks

USD/JPY shot up with the move by Shinzo Abe to offer unlimited easing. That’s the guy (I would use a stronger word if I could but keeping this PG) to blame for gold and miner’s fall on Friday.

https://www.ft.com/content/7e64027c-2f04-11e2-b88b-00144feabdc0?mhq5j=e3

Of course we could blame the fat finger for silver’s bigger move down than even miners as that got the negative ball rolling. It still irks me. CNBC did mention it at least.

Jan. 6th 2014

Sudden gold plunge has traders looking for answers

March 28, 2016

Gold Recovers Losses After Overnight “Flash-Crash”

June 26, 2017

Gold price drops mysteriously amid ‘fat finger’ speculation

July 7, 2017

Silver plunges in yet another mysterious market ‘flash crash’

OBSERVATION:

The good news about gold miners. Since I started following the Hot Corner and Cold Corner ETF trend below, I am going to say 85% of the time we do NOT have an ETF go 3 days in either category. So while there is a chance for JDST and DUST can have one more day of continuing there trend, and the fantastic news is in the time since around March when I started doing this analysis, there is only one time we went 4 days in this Hot/Cold Corner trend. This means we have a very good chance of at least a short term bottom in miners JNUG and NUGT and this can lead to a reversal and if we did catch the bottom, some potential big rewards for us sitting through a little pain. I believe in this analysis 100% and have seen it over and over. We’ll find out the truth come Monday.

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):

DSLV, JDST, DWT, SOXL, DUST,. SVXY DGAZ, DGLD, TQQQ

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):

USLV, JNUG, UVXY, UWT, SOXS, NUGT, UGAZ, SQQQ, UGLD

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. 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 typically well before they start to fall again or turn red on the weekly. 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.

Doug Eberhardt