06
Jan 14

Open Trades in the New Year: SPY, XLF, IWM, XLE

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Happy New Year!

We had stopped posting for the last 4 months but we are back.

Current holdings are:

SPXL – based on trend seen in SPY we are long SPXL at 63.42

FAS – based on trend seen in XLF we are long FAS at 90.19

TNA – based on trend seen in IWM we are long TNA at 77.23

ERX – based on trend seen in XLE we are long ERX at 89.38

It should be noted that the market has been in an uptrend for a while and showing signs of weakening in our opinion. The emerging markets have been in a down-trend for a while and should start pulling the other markets down. But for now we are long the above and will take necessary action as the market develops.


27
Aug 13

Market Watch for August 27, 2013

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SPY: Tried bouncing back but still heavily in bearish territory; I am long SPXS and will hold for now

EEM: Very much in a downward trend – but did break trend briefly for a day; I am long EDZ; need to watch

XLF: Charts are bad, very much in downward trend; I am long FAZ

IWM: Did break its downward trend by a small margin; I am long TZA; need to watch closely

QQQ: in slightly bearish territory

XLK: same as QQQ – slightly bearish

XLE: still in bearish territory

GDX: in bull market; doing well

UNG: nicely in an uptrend

FXI: In neutral territory

EWJ: in a downtrend

EWY: very choppy – cannot determine trend

ERUS: very choppy – cannot determine trend

EWZ: neutral


21
Aug 13

Trades initiated: SPXS, TZA, FAZ, EDZ

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Yesterday I opened half position trades in the following:

SPXS: Opened position at 48.98 based on trend seen in SPY

TZA: Bought at 26.87 based on trend seen in IWM

FAZ: Bought at 31.49 based on trend seen in XLF

EDZ: Bought at 57.13 based on trend seen in EEM


20
Aug 13

Trade Watch for August 20, 2013

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SPY: The SPY is broken trading below the 50 DMA; the only reason I still hesitate making the trade is because it has been down 4 straight trading days; it is down 3.6% from its recent high reached on August 2; seems to be looking up today at pre-markets

IWM: The IWM is broken as well – similar to the SPY

QQQ: The NASDAQ has been down but not as bad as the SPY or IWM

XLF: completely broken

XLK: similar to the QQQ

EEM: completely broken

XLE: completely broken

GDX: looks very bullish but dangerous to get in on long side with overall markets looking so bearish

UNG: neutral

EWZ: trend is lower

FXI: looks bullish

ERUS: looks neutral

EWJ: looks bearish

EWY: neutral

 


19
Aug 13

Trade Watch for August 19, 2013

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Glad to be back! Here is how the markets look like today:

SPY: Downward trend, likely to continue moving lower, I will get in with a trade in SPXS as long as our Alternate Trader Model volatility filters are intact

EEM: Has not yet reached our down trigger, but is close, need to watch

QQQ: Not achieved down trigger, but close

IWM: Has triggered the downtrend, but broken volatility rules, keep watching

XLF: Has triggered downward trend, but broken volatility rules, keep watching

XLK: Close to triggering downtrend, watch closely

XLE: Definitely in downtrend, but volatility rules broken


26
Feb 13

Alternate Trades Closed: UPRO, FAS, TNA and ERX

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As planned, today I closed the following Alternate Trader Model trades:

UPRO – Sold at 101.64, had bought on January 7, 2013, for 94.14, booked gain is +7.97%

FAS – Sold at 142.32, had bought on January 7, 2013, for 132.54, booked gain is +7.38%

TNA – Sold at 75.45, had bought on January 7, 2013, for 69.88, booked gain is +7.97%

ERX – Sold at 58.59, had bought on January 7, 2013, for 52.43, booked gain is +11.75%


26
Feb 13

Market Preview for February 26, 2013

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All markets I am in – SPY, IWM, XLF and XLE – fell and closed below my reference levels. They all violated my volatility rules. But it was the second time that IWM and XLE breached my levels, so that is the trigger for me to exit my trades.

Today at market open I will exit my trades in UPRO, TNA, FAS and ERX.

Interestingly, SPY, XLF and XLE have also triggered bearish signal for my model yesterday. However, they have done so by breaking my volatility rules – so I will wait for confirmation of the bearish signal.


23
Feb 13

Preparing for Market Monday February 25, 2013

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What is better than spending time on my open trades Monday morning before market opens? Spending time on my open trades on Saturday afternoon! So, here goes:

SPY – interesting moves in the last 3 days: closed at a recent high of 153.25 on Feb 19 (Tuesday); then closed at 151.34 on Feb 20 (Wednesday) down -1.25%; then closed at 150.42 on Feb 21 (Thursday) down another -0.61% for a total fall of -1.85% over 2 days; then shot up and closed at 151.89 on Feb 22 (Friday) up +0.98% for a net fall from recent high of -0.89%

I do not think this can be called a correction of the markets yet, and certainly not a crash. There is an inevitable feeling in the market that prices have to fall because they have just been on a one-way street for 2013 so far. While it is true that the market cannot keep going up in a straight line forever, it is also true that predicting correctly when it will stop going up and start correcting is also very hard.

So, I do not predict. I just wait for the market to actually go down and then sell. My RPB (Reference Point Below) for SPY is 149.42. If the SPY closes below that level I will exit my trade in UPRO. Note that I also have volatility rules in place that stops me from taking action (both on entries and exits) if the market moves too much in one or more consecutive days. If SPY had closed below 149.42 on Feb 21 (Thursday) for example, I would still not have exited my UPRO trade as SPY would have broken my volatility rules.

At the end of the day, I know that I will probably end up leaving money on the table when I actually exit. My model guarantees that I will never enter at the low and exit at the high. But it gives me great odds at catching the bulk of the move and still beating the market. I like those odds and hence stick to my system even though my instincts tell me to do something else. A system does not have instincts.

Let me check on my other open trades:

IWM – did breach my reference level of 90.24 on Feb 21 (Thursday) but broke my volatility rules, I am still holding on to my TNA trade and will exit the trade if IWM closes below 90.24 again

XLF – I will exit my trade in FAS if XLF closes below 17.48

XLE – did breach my reference level of 77.38 on Feb 21 (Thursday) but broke my volatility rules, I will exit my ERX trade if XLE closes below 77.38 again


20
Feb 13

Market Trends for February 21, 2013

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I will evaluate my open Alternate Trader Model trades first:

SPY – I am long UPRO based on trend seen in SPY; the trade is up +11.40% since initiated on January 7, 2013; my RPB (Reference Point Below) is 149.42 which means I will exit my UPRO trade if SPY closes below that level; SPY was down -1.25% today and closed at 151.34 but did break my volatility filters for a single day move; interesting to see what happens in the next 2 days

XLF - I am long FAS based on trend seen in XLF; the trade is up +12.75% since initiated on January 7, 2013; my RPB (Reference Point Below) is 17.48 which means I will exit my FAS trade if XLF closes below that level; XLF was down -1.51% today and closed at 17.66 but did break my volatility filters for a single day move

XLE - I am long ERX based on trend seen in XLE; the trade is up +18.08% since initiated on January 7, 2013; my RPB (Reference Point Below) is 77.38 which means I will exit my ERX trade if XLE closes below that level; XLE was down -2.09% today and closed at 77.70 but did break my volatility filters for a single day move

IWM - I am long TNA based on trend seen in IWM; the trade is up +13.52% since initiated on January 7, 2013; my RPB (Reference Point Below) is 90.24 which means I will exit my TNA trade if IWM closes below that level; IWM was down -1.86% today and closed at 90.83 but did break my volatility filters for a single day move

So markets had a big move downwards today and I want to evaluate some more markets to see what the other market trends look like.

QQQ – has been very choppy and under-performed the SPY by about -75% in a 1-month period (even though the QQQ is up +1.58% in that period); not yet bearish trend though

EEM – in bearish territory

FXI – definitely in bearish territory

XLB – fell -2.81% today and in bearish territory for over a month

XLI – hugely bullish

XLU – in bullish territory which does bode too well for the other markets as Utilities is supposedly a defensive sector

AAPL – has been bouncing between 440-480 in the last month or so; does not look like it is out of the bearish territory though

 


06
Feb 13

Alternate Trades Performance – January 2013

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My trades based on the Alternate Trader Model returned +10.46% for the month of January 2013. In comparison the SPY returned +2.49%. The table below describes the returns. Note that all close prices are based on closing prices as of January 31, 2013.

Trade#TickerStart PriceClose PriceGainGain%
Average+10.46%
14UPRO94.14101.83+7.69+8.17%
15FAS132.54142.32+9.78+7.38%
16TNA69.8876.31+6.43+9.20%
17ERX52.4361.39+8.96+17.09%