SD's - Final Shot-2013-

[sd]

I was technically pleased with several of my exits last week , and also the following reentries- After the initial market spike higher, on the idea that the politicians were talking, and hopes for a resolution, there was no follow through the following day, and i sold and locked in some profits as prices failed to attempt to nudge higher.
I made a number of reentries this week- based on what seemed like positive news and got some entries coming off the prior sell-off lows and the following day's initial move higher-
My thinking was that if the markets have indeed potentially been reassured that the US Gov't won't shoot itself in the foot with a total debt impasse and fall off the cliff, those things that were selling off on that fear and the potential impact would likely respond favorably.
I went back into Europe- VGK, Austrailia- EWA, Dividend plays -SDIV, ;
More speculatively- 2 plays on Nat Gas UNG, FCG,- would seem to be fundamentally strong- had moved up despite the market's hesitation-
And, fall is here, demand should be rising- Why not higher prices?
I'm more leery of UNG chart-wise & volatility wise, compared to FCG.
2 plays - A Gold Short-DZZ, and Biotech-xbi-
are priced in a manner that they will be a larger loser than the other trades-
Gold broke it's support, and DZZ gapped wide- I elected to Buy DZZ at the higher gap, thinking I am willing to believe that Gold failed to rally in a period of indecision, and therefore, it will not be able to sustain a significant snap back- However, the Gap in price makes this a position that could eqasily see Gold trying to retrace and make up some territory- requiring a wider stop if i wish to try to make this work as a longer term trade-
XBI- Biotechs have been very profitible, and reportedly, a lot of lock-in profit taking was done in the industry by quick money looking to sell the big gainers. It had a gap back higher, on which I entered Thursday at the very high, and consolidated on Friday-
Consider this the Inverse of purchasing the better group of dividend performers- this XBI position is more like betting that the street will throw together a new Kentucky Derby in the field- Why not continue to lock in those gains already made in XBI while this Debt mess gets dragged about on the political floor-
3rd Qtr earnings also come into play this week-
Should be an interesting time ahead-
Good Luck- SD

[sd]

xbi stopped out yesterday- I had taken the trade based on the idea that some of the same momentum players would jump back in after the sell-off & profit taking- Caught the high on the reentry and filled at $ 120.64- stopped out today $117.49. for a -2.61 loss.

The Gold short using DZZ is slightly negative- and i'm holding a very wide stop-loss relative to what I would "normally " allow-
It's also a relatively small position $$$ with only a 100 share position at this point-

This Gold short entry was NOT a good technical entry by any means- For myself, Gold showed that it was not the answer as the market sold off- It failed to rally when the opportunity was presented for it to take the "safety trade" banner and surge when the market felt the pressure of the budget default-
Then a big holder unloads a large position- Gold breaks 'support'
With Gold dropping below what some called a significant support level, Could it continue to go lower? I would certainly think it could and will based on Yellen being nominated, and the Fed's policy of accomodation continuing- The specific question to my taking this trade at an extended gap- Is what was I trying to prove in chasing this trade higher? I intentionally took this trade at this extended level with the knowledge that it was well beyond normal parameters of Risk & reward- I feel I should have delegated this DZZ trade to the longer term account......
Look at the Russel 2 hitting a brand new high!-
Bonds are still struggling- Yellen has always been considered as a "liberal' compared to Sommers- so expect the Punch bowl effect to continue-
.
Presently, it's about the politics and the debt ceiling- Earnings will become a concern in the weeks ahead- Investors will try to stitch together a tapestry of where the future will end, Hedge funds will play the market for positioning going into the end of the year.
No telling how volatile the politics will make things-

[sd]

www.benzinga.com/markets/13/10/3986020/is-your-quest-to-make-money-actually-hurting-your-performance
Jason Leavitt - Leavitt bros.com has a fee based trading service, as well as a free - pre market analysis.

[sd]

It has occurred to me that I abhor taking RISKS- I could never conceive of donning one of those flying squirrel suits and jumping off the face of a perfectly good cliff - How do you train for that first flight anyhow? What a RUSH that successful flight must bring to those that actually put themselves- their lives- on the line-
And then there are those that do not survive .......
Somehow, my willingness to climb 25' up a pine tree in the dark while wearing a safety harness doesn't quite compare!
What a psychological mind set - confidence - those flyers must have- Saw a 15 second news clip this week about an experienced jump suit flyer who failed on a jump this week, and his body was found at the bottom of the mountain he leapt off- His one Bad jump was his final jump- But he had had many successful jumps prior- He was not a novice.
This is a poor anology due to the consequences being so overwhelmingly significant for the jumper-
There is not really ANY comparisom between what that Flyer did , and those of us pushing a trade button and executing a trade and evaluating a financial loss or gain- But -consider- our level of Fear of having a bad trade indeed holds us back if we do not have a solid sense of allowing those bad trades to occur as part of the normal course of business.- And to make allowances for it to occur- FEAR is a factor in jumping off a mountain, or sustaining a losing trade- Do we allow our FEAR of that losing trade to hold us back affecting our longer term performance?
Jason's article about executing the trading plan is spot on.

The follow up question becomes- Do we have a disciplined approach to the market? The way we take our trades-
Does the Market environment factor into our decision making process? How do we process the change in the Macro markets to our advantage?
As tactical traders - Choosing to trade within a hostile environment, or a more benign environment is a significant aspect of choosing to improve the probabilities in one's favor.
I am not confident that taking sides early on is the answer in this present process- Perhaps the most prudent approach is a wait and see position- and choose sides once the skirmishes are past and a clear direction is in place.
This is indeed the 'Doubt' that creeps in....

[sd]

The market consensus today is that a deal would indeed be made- and everything moved higher-
I added Smaller Positions in CURE - 3x healthcare
And took a reentry into XBI-
At the time of the trade entries, Cure was up over 4% and XBI up 2%- they closed up 7% & 4%.
I also added to FCG- AM 100% long in the trading account now.

I didn't care for the End of day action with UNG, with 2 -2 hr bars closing in the red- so the rule is to raise the stop on a closing bar that violates the 2 hr chart fast ema-.
UNG is right at prior resistance, and i RAISED THE STOP to $19.09 with the entry $19.27. The entry was not great- and so I'll see what Thursday delivers-
With a big Momentum surge that today brings, it will be normal to see some of the wind let out tomorrow- If fear of the politics is over for the time being, maybe fear of earnings will be next-
I thought I'd have more time to catch up - but only have the 1 chart- to post- Should have done xbi instead- a losing trade and now the reentry-
Instead- here is the Aussie play: The Europe play was very similar- both were sold on the failure of the momentum move to follow through the next day, both were reentered on the News of the likely News out of DC. I was pleased with the second entry, because it really allows a tight stop-less relative to the swing low.
Hmmm- The chart link is here, but no chart....Later.a second try:

[sd]

The Premise for the xbi trade was the same as the other trades-
A possible market rally on upbeat political news concerning the Debt ceiling-
As price failed to move higher the following day, I raised a stop below the low of the day-
The following day, price opened lower, hit the stop-

Tight stops protect from downside moves, but are also prone to whipsaws- where the stop gets hit and price then resumes the desired trend.
In this case, I took the reentry when price showed some upside momentum- I will follow this as a momentum trade- ideally price will give some upside so I can get a stop-loss raised to BE if needed.

[sd]

It's nice when you execute and the trade at least moves as planned- I am lucky this week-ALL HAD THE WIND AT THEIR BACKS-!
It's even better when you can take that early entry, and price confirms your rationale for the trade.
when you have an entry very tight to the swing low stop, you have managed to reduce your RISK %

[sd]

SDIV IS A MANAGED etf WITH A DIVIDEND FOCUSED APPROACH.

The value of this chart is 2 fold-
notice the entry just above the top of the range is a typical breakout approach-
The range & consolidation is rather well defined-
However, Notice that the price dropped below the low of the range, and then proceeded to push higher and exceed the top of the range.
Call this the drop back and kick play- This is a price action move that often leads into a substantial upside move higher-
I would assume it is the smart money manipulating the stock price and taking out the tight stops just under the consolidation range,
For those trading on a daily chart- look at that long tail candle dropping lower, meaning sellers were there, but it closes higher, and moves above the resistance-
Says that sellers got washed out-
It is important that the close is above the top of the range IMO> within a day or 2 .

[sd]

Good entry- again, a market news momentum play
If the US has 'fixed' it's debt issues, the World economy can continue.

Good chart entry-

[sd]

A friend told me he had gotten a low limit order filled in WMT yesterday-
Take a look at the WMT chart for 10-17-13 on a 5 minute chart- or 1 minute-
Price dropped from $75.78 to $71.69 in less than 1 minute-and was back up immediately-

6.4 M volume, so this is not a thinly traded -manipulated-
Lucky for my friend to get his order filled near the low- but how wrong for anyone else that uses stop-losses in their investing/trading approach-
I wonder what else was affected similarly?

[sd]

With GOLD not responding positively during the political crisis and breaking support levels, I purchased DZZ- and set a wide stop (Risking $100.00 initially), thinking there might be a bounce of Gold back up , but it would be short lived, especially if the market trends higher on upbeat news-
DZZ hit a gap down at the open, and put in a $6.45 low- so this upside momentum move in Gold somewhat surprised me- Market is higher-
I'm raising my stop on the trade to $6.44,.

[sd]

UNG dropped below my $19.00 stop by $.04 and moved higher-
UGH!. DZZ managed to climb up slightly-
xbi & cure both lost ground today, while the remaining positions gained a bit-

[sd]

I was stopped out of DZZ today, and it has been in trouble for 4-5 days, and it had gapped down well below my entry. It wasn't a good entry to begin with in hindsight, but i thought I would catch a larger move on market momentum turning more positive......
Did some reading this past week-and i think i will try to make a shift towards holding positions for the longer term and trying to not react to short term gyrations- As long as the trade isn't diving deeply into the red- or in a major break of a slower trend support.

I have also elected to try trading without an active stop in place, to try to allow myself to not get hammered by a quick short term move- or a mini "flash crash" like WMT had last week. I want to put more focus on the closing price, and where price is on the larger time frame.
2 partial positions- XBI & CURE- will be the most volatile I own.
I will see if i can be willing to hold for a longer duration.

[blygh]

I think gold is advancing on the basis of a search for a value holding currency. Housing prices in London rose 10% last month - a harbinger of coming inflation - German housing prices took a similar jump - this puts the Pound and Euro under suspicion. The Washington Follies has made people suspicious of the dollar. The Yen has fallen 25% against the dollar this year under the reflation in Japan. Gold is down by $600/oz or so. So where do you store value? Gold is the least ugly contestant in the currency beauty contest - I think
Blygh

[sd]

I think you are likely correct Blygh- In the larger picture, I wonder if Gold will ever recover it's upward momentum of any significance, and try to get past the prior highs.
Gold has had several boom and bust periods I understand- Heard the other pm a comparisom of how poorly Gold has performed historically- The prior decade was certainly outstanding though.