Crude – what a head fake!

in my last post i mentioned how crude has broken above the 200 days moving average in a ‘fantastic’ way. Since the market is always right, and the price is the only true north star, i hit my stop loss and exited the position i was in.

Yes my three standing orders got triggered, and here are they. Now why you might be wondering i am trading only 1 contract each. Lol, Living while traveling is cheap and asia is cheaper!

Screen Shot 2019-07-19 at 12.46.38 PM.png

I have a sell standing order on crude right below at 54.64 with a expectation that it will fall upoto the next support around 53.15 and nice 150 ticks. very tight stop loss at 54.84.

why ? Crude is at critical support as the 1 month chart shows.

Screen Shot 2019-07-19 at 12.41.17 PM

weekly forecast Nasdaq

Screen Shot 2019-07-13 at 12.25.13 PM

It is going up and upper!

See from the chart above, about 83% of S&P 500 stocks are above their 50 days SMA. The breath is profound and good. It has reached the April 2019 highs. So, if that is the case then, is a correction imminent ? No, not right away; for the price is not falling.

The following has been added to how and why page.

This (# 3 and #4) i have added after a few years of full time trading as of July 13th 2019 (in south indian city of Hyderabad): Price is the only true north star. Not only all is in the price, all is the price.

Buy at the top sell at the bottom –
Profit in assets are only made at the price you buy not at the price you sell. So you go long (buy) at the beginning or there about of an uptrend or go short (sell) at beginning or thereabouts of a downtrend. Since price is the only true North Star. One ‘exits’ at the top or bottom to make true profit and to accumulate assets. In both cases – long or short – you are buying low and selling high (in trend following jargon – you are always buying and selling in strength, that is you are little late to the party and leave a little more earlier) . THIS DOES NOT MEAN YOU ARE ACCUMULATING ASSETS AS PRICE IS FALLING. In fact it is exactly opposite to it. Accumulating assets as prices are falling is buying high and selling low ( you sell low because you can’t bear the pain of loss). You always accumulate assets when price is rising. You exit assets when it’s price is falling.

slow burn up in crude

Crude Oil fantastically broke up yesterday. It shattered a 1 month ceiling and crossed up and above the 200 days SMA.

I’m long on crude, with a stop loss just below 60 dollars and sell limit order at 62.34.

Let’s look at the one month chart.  Screen Shot 2019-07-11 at 9.47.23 AM

as you can see the chart above Crude is at 1 month high and uncertainty between 55 and 60 is gone (i personally lost about 3 round trip trades and was stopped out..total loss about 120 ticks. But the big losses was kept at bay by keeping tight stop losses)

I am really tempted to increase my stop loss in this trade currently. Entered at 60.38 and because of this ‘Slow burn up’ in the below chart, i feel the next near term rally has started

Screen Shot 2019-07-11 at 9.47.56 AM

You see in the chart above for 7 days the movement has been sideways (forming a good support at 56.50 ), and then up. Why did i not enter at 57.00??  Two reasons – one, Stopped out 3 times. Two, the resistance of 60.00 was just too close.

So the stock market is up and sustained up. EURUSD went up 100 pips. Gold is up. Crude is up.

from the charts, by all counts (4 and counting), a near term rally has begun.

i am NQU19 long, CLU19 long, Long TQQQ. Gold – GCQ19 i’m waiting for 1425 to be taken out (I already have buy limit orders on it).

I have already taken 80 points profit on NQ. Reentered on an automatic buy limit order on Charles Schwab at 7959. Stop loss at 7910.

Happy travel trading!

 

 

why is beta not enough for the long run – 9,900 % in apple stock

i was listening to a wonderful IBD podcast. MarketSmith Senior Product Coach Scott St. Clair was candid, humorous, self-deprecating. The middle part of the talk focussed on human behaviors. (behavioral finance)

there were gems in it. One is the fidelity study.  here is the business insider article of September 2017 titled – Fidelity Investments Did A Study On Which Client Accounts Did Best And What They Found Was Hilarious

“They found that the best performing accounts were from investors who were DEAD! In second place were investors who had FORGOTTEN they had accounts at Fidelity.”

Scott says this (paraphrasing) : I had a client who died and the company policy was that i cannot touch – i cannot sell or add to his positions.

“He was stuck in all these great stocks, and he didn’t have me to get him out of them..wiggle him out because they were going up” (check the same interview of podcast at youtube here at 22:05)

thank you Scott for your honesty and humor.

Screen Shot 2019-07-06 at 10.36.37 AM

the red line is AMZN last 5 years. the blue line is TQQQ (triple NASDAQ 100), and the bottom is NASDAQ.

David Chung (@IBD_DChung)  from IBD says this says this “Judo masters begin not by learning how to throw, but how to fall. They practice this skill until it’s as natural as breathing. No matter how many times they’re flipped, they can rise to fight again.”

He goes on to say : “Highly successful stock pickers go through similar training: They must learn how to cut their losses short. This means selling a stock when it’s down 7% or 8% from your purchase price.”

 

Crude Oil short trade

Screen Shot 2019-07-03 at 11.31.58 AM

I’m looking at daily chart and a significant trend reversal from long to short is showing. See on daily chart a clear bounce down happened on July 2nd of about 3.00 dollars.

I’m shorting below 55.45. exiting at 55.07 and then shorting below at 54.45 to exit at 52.39

Orders placed and first stop is at 56.15 , thens the second stop is at 55.10. Risk reward ration approximately 1:2

great article Trading volume in ETF

Would you hesitate to make an ETF trade that was significantly larger than the average daily volume? Here’s an example of how ETF liquidity works and what really matters.

During the first quarter of 2017, 1.1 million shares of NOBL (ProShares S&P 500 Dividend Aristocrats ETF) were bought in one block trade.

nobl_tradingnobl_trading_comparedotional is notable for its This trade of $60 million notional is notable for its size and the quality of the execution. It is also a good example of some of the fundamental principles of ETF trading that are worth reviewing:

ETF volume is not an indicator of ETF liquidity

At the time of the trade, NOBL’s average 30-day volume was approximately 360,000 shares. The above-referenced trade was approximately three times the average daily volume. The ability for market makers to access the underlying liquidity of the ETF’s components, or basket, created a secondary level of liquidity that far exceeded the average daily volume of the ETF. As noted in the graph below, 1.1 million shares were sold at 11:07 am on the offer at $54.15 when only 8,400 shares were publicly offered at that price, which made no noticeable impact on the bid-ask spread.

Liquid underlying constituents means liquid ETFs

The underlying constituents of NOBL are 51 U.S. large cap equities that are equally weighted. These large cap securities are some of the most widely held U.S. equities with deep liquid markets. For the $60 million notional trade noted here, the approximate 2% weighting in NOBL yields approximately $1.2 million in notional to buy in each security. Viewed this way, the transaction is a relatively small trade across 51 securities. As result, the 1.1-million-share trade had little effect on the secondary trading of the ETF following the trade.

Accessing liquidity providers is the key to great execution

ETF liquidity providers have the unique ability to create and redeem new shares of the fund. As a result, they can look past low screen volume in an ETF to the underlying components. In addition, when the underlying components do not have the same liquidity as those in NOBL, in the case of small cap ETFs for example, a liquidity provider could use a liquid proxy hedge like small cap futures to provide immediate liquidity in the ETF and over time buy the underlying components. In either case, the liquidity provider needs only to deliver the underlying basket of securities to create new ETF shares.*

Intraday value can be a guide to execution quality

The intraday value provides a good estimate of the underlying value of the ETF compared with the trading prices of the underlying basket. The intraday value for NOBL is published by the NYSE every 15 seconds. At the time the trade was executed, the intraday value was approximately $54.1286. In other words, the trade was only $0.0214 (approximately 4 basis points) over the intraday value.

This article can be found at Proshares website here