SD'S 2019 RAMBLINGS

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Apparently NFLX disappointed and the headlines afre that NFLX is dragging the tech sector down-
ROKU split order- sold 20 @ the open 137.39, 20 @ stop 131.89- Got lucky in playing this trade this way- I saw both ROKU and NFLX moving this week- and if earnings had pleased the street with NFLX, ROKU would have also likely benefitted-

i.imgur.com/mYdEpy2.png

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WHIPSAWED BY SECTOR ROTATION-

Time for A few thoughts here as we got some of the home punchlist completed: the skylight glass changed out just ahead of the rain this Saturday-
Last year I went defensive in the IRA account and raised a fair amount of cash and gradually stepped back in as equities sold-off. Felt pretty smart as i was buying Dec 24 in the face of panic selling- and again Dec 26- After all- market was down almost -20% from the highs- how much deeper could it go? This year a simple Truth - Trade with the Trend- go with the direction of market momentum - proved insightful- and simple- and profitable-
BUT, we have hit stretches now that the market is no longer trending,reacting to political and extraneous news , and I've been getting whipsawed - in trying to shift assets in this turbulent noise.
When equities lead , tech was the driver previously, , but turn down, Bonds and Utilities had a solid run - And Where are we now? I just went long TECH with size , as the week's move back to the upside seemed to have been driven by initial good earnings this quarter- But NFLX drives it all down?!
In the pursuit of understanding sector rotation , Julius Dekempenauer explains the RRG charts, (relative rotation graph) and has recently started sessions on stockcharts TV-
Very informative-
www.youtube.com/watch?v=I_ZXazlwWCU&feature=youtu.be

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I'll be shorting NFLX this week in the Horse Race- Revenge trade- having issues with Pro=boards access, but got on the strategies thread-will try again

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Making a few Buys -of prior horses based on nice moves today
Started with SOLY -sctr 89.1 i.imgur.com/OJ2N46A.png
ENPH- high SCTR score 99.4 -https://i.imgur.com/0gFpm8z.png
SAH sctr 98.5 i.imgur.com/8AItmtj.png
ARKF- XLF IS UP, SO THIS SHOULD ALSO FIND LEGS- i.imgur.com/KbHbkr0.png

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ALAN FARLEY- Hard Right Edge- The Street.com Book- Master Swing Trader




Reminiscing a bit .....a decade or 2...
Years Ago, in my pursuit of trading knowledge, I bought a trading video starring Alan Farley where he was addressing a group of would be investors and he illustrated his market approach-
One of the take-aways- was that- in that example- he liked entering a trade as close to the Point of Failure - P.O.F. as possible-
What is the POF? where the reason to be in the trade is violated by the price action.
It was- and likely still remains- a simple but potentially effective entry strategy.
The POF entry is as close to the POF to minimize the potential loss of a tight stop- Simple concept- hard to execute.
In my charts, I include the stochastic oscillator- and it is notably early compared to the stoch-rsi both in decline and advance signal crosses-
I found this interesting article from the Hard Right Edge on applying the stochastic indicator
www.traderslog.com/trading-stochastics

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I took a few small position size trades this week simply noting the horse race list and selecting from the "Summary" view, those holding higher SCTR ratings and charts that had some promise-
SAH-Can't help but remark that this trade was already in an uptrend- so it obviously had better chances of working compared to the other 2 SCTR trades.
behaved well and has had a higher gap move Thursday and Friday- Several wide ranging bars - but both closes fairly close- net price move above the range about +8%-
I will set a market sell for 1/2 the position for 10-28 open - looking for a possible higher open execution , and a trailing stop at the 4 ema under price bar lows
i.imgur.com/Vf4MeXa.png

ENPH Had a high SCTR score, had seen an upturn from a Lower Low, and appeared to move higher- prompted my entry on the higher green bar-
Took a loss as the trade stopped out $22.90. I had initially thought to put in a tighter stop-loss- but instead widened it a bit- It was hit by the 3rd red bar . Friday,
the price went even lower, but closed higher on the day- possibly an indication of a renewed move higher this week- I will pass on taking another shot at this level.
i.imgur.com/WLX0KBB.png

SOLY- Soly also appears to be a losing trade based on the large red bar Friday-closing at $12.51- I will implement a stop at the $12.50 closing price- potentially this goes much lower.
I had not set the tight $13.00 stop-loss and will take the loss Monday -
An Optimist would be hoping that the 1st red bar gets reversed by buyers jumping in- so I'm not selling outright- but will have the stop-loss in place
i.imgur.com/CT5lo0l.png

ARKG- ARK GENOMICS FUND_ While healthcare IYH and biotech IBB has been under pressure for months, in October both rallied somewhat higher - Political rhetoric and healthcare is a topic for political candidates and the investment community is concerned. ARKG has not responded this month as has the IYH and IBB- Perhaps that is because ARKG contains smaller and more speculative names in the genomics industry group . My expectation in taking this trade was the recent bounce off the lows,1st entry, and I also added to the position by +30 shares @ a $28.10 limit as price showed it was pulling back this week. I own positions in a number of the ARK funds, thinking that their focus on innovation and disruptive technologies may come with outsized Risk as well as potential reward. This is also a technical trade- recognizing the concept that you have to determine where the P.O.F. lies and trade around it.
In this example, the $28 level held some price action, and the $27.75 level was the reversal low- and that will represent the stop for the position - 50 +30 shares.
Again, the assumption is that this is a bottoming formation, the Low has already been made, investors find value here and continue to Buy- Also , the higher upside momentum in the IBB should roll over into assisting ARKG to put up a higher thrust. On an investment note- Genomics will play a big role in the future of medicine-
PERF Chart compares ARKG, IYH,IBB over the past year. Note that the ARKG line has not seen the upturn of the other 2
i.imgur.com/OthsW3O.png
Chart of ARKG:
i.imgur.com/LZZvRko.png
Similarly , I own some ARKF- ARK Financials- Speculative new approach to the financial sector- Just closed higher Friday- It's also not a segment in favor- Has made a dbl bottom in the past 2 months- May add to this trade using a buy-stop limit above Friday's close. Overhead resistance at 5% higher.
i.imgur.com/3gq70JA.png

New trade consideration - ROKU is again my Horse Race pick for the week- It did not decline as sharply as expected -nor as much as NFLX-
Chart wise- this declined and went sideways , with price compressing into a sym Triangle- so, I'll use a buy-stop limit order on a higher move Monday and a stop just under the base.
My prior trade setup worked out well- with the decision to sell 1/2 at market and raise a winning stop timed the action -coincidentally I admit.
Set-up is to enter only if price goes above my 134 entry level. with a 136 limit. stop in the 125.75- below the recent base.

i.imgur.com/sPuleW2.png


DAVE LANDRY- STOCKCHARTS TV- FREE BOOKS- Go to WWW.DaveLandry.com/stockcharts and he offers to share his 3 books, some power point slides etc. FREE.
In his weekly stockcharts TV shows i recently caught, he gives examples of his position sizing approach- and willingness to hold what I consider to be a too- wide stop based on historical volatility- but he is on track to take some profits and then trail a wider stop to get the maximum out of a trade- The simple graphic bow-tie consideration as the moving averages make that reversal to signal a trend change is a simple and powerful concept- Trading With the tr4end is where I should reserve myself to based on this week's losing trades despite the higher SCTR ratings.

Due to a rainy leisurely Sunday, I've spent more time on charts and reviewing present trades than normal- Good exercise- Also still long with size -technology - did also go back into VPU and VNQ- utilities and realestate.

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mARKETS HIGHER! Roku gapped over my Buy-stop 134- Limit 136 with a low @ $136.40 AHH, got the breakout potential correct on the AT- but did not give it excess room for a higher entry.
Worth a look- Perhaps the Alan Farley approach would have aggressively bought the AT formation with a stop below- and had gotten the best entry/Risk to Reward ....
Since I missed this initial move, I likely will not immediately chase it higher- Also missed out on a higher move above my limit in ARKF .
i.imgur.com/Dfy59FB.png

With the market rallying today to new highs- ARKG is breaking the range- I had just added to the position.
ARKK - holding a large position- plenty of chart upside potential .
ARKF- financial- gapped above my higher limit order- CHEESH!

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Cancelled the Roku order to free up cash for TLT Buy-Stop Limit coming off a dbl bottom stop 137.

i.imgur.com/MD8FEZQ.png

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Buy-Stop worked as designed- did not fill as TLT weakened.
New market highs made today- I put some free cash in and holding about 5% in cash now.
I got off several hours before the market close to see a market wide strong day.
Health care has been coming alive recently, along with biotech- bought IBB, VNH, added to ARKF - already holding ARKG- Added to the VNQ position on todays weakness-
Holding a large % in technology through VGT and it has been performing well recently. also looked at global Reit funds with INTL exposure
www.thebalance.com/best-reit-etfs-4174043
The Vanguard VNQI has a 12% ytd performance, but could be a good value if the global markets gain some momentum. VNQ compared well in YTD performance -
Seeking to stay with the momentum tide, Reits have been a good year performer- along with the home builders- who just had a small pullback on what looked to be an overshoot in momentum- Took a small position there in the uptrend and today's higher price bar above the lower bars-

It's interesting that while I tend to focus on popular names in the financial news- a simple Reit like MAA can put in a 40% upside move while my vision is still focused on past year market performers-
i.imgur.com/uRXf1BU.png
Notice that the i shares -compared to MAA with a 40% gain ytd while the xhb was significantly lower..

i.imgur.com/lZttk1x.png

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11.15 Market putting in new all time highs- I put my remaining cash back in today-I added to Healthcare, ARKK,ARKG noticing that my return in ARKK exceeds my technology return- although the tech sector is a much larger cash position.
Healthcare had a 2% up move today on some remarks about hospitals having to demonstrate open pricing for consumers by Trump-
Tech sector is up over 40% this year, led by large cap Tech companies. SPY is up some 24% and still climbing. Notice in the attached chart, Healthcare had been barely rising until recently, and biotech had been a pitiful investment-
i.imgur.com/uMHP1GN.png
So, why add to what has been largely ignored by the market? Looking to see some market rotation into areas that have underperformed...
Like all periods of market momentum, all I can do is to trail stops in what will eventually fade and roll over a bit-
Politics is a disruption, but the market seems to be willing to ignore it presently---- If the trade war/ tariffs could be concluded, the markets would jump directly higher.
In past years I thought the spectre of the gov't not being funded would be a huge sell-off- I expect this year's lack of resolution will be just a passing note to the markets- as they have seen this charade played out every year....
Still overweight technology- and also allowing the ARK positions more weighting- The only way to justify this high market exposure is because I have stops in place- typically within a few % of the 10 ema .... That's fine until a volatility spike takes the stop out and closes much higher- See the AAPL chart- Wife is trailing AAPL with tighgt stops on this momentum move.
Note the big spike down that would clear the stops in late October just prior to a substantial up trend-still in effect-moving higher
i.imgur.com/kHOvOoM.png

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Vacation week! Replacing the back deck and catching some CNBC- What's not to like? Mid afternoon rain interrupted the project.
The market breadth appears to be widening- they noted that both value and Growth indexes are rising at the same time-
In my Vanguard IRA allocation - tightened stops today, had some free cash- added to ARKK in the wife's port, for the higher growth- and -since I am so overweight tech- I elected to get a starting position in VANGUARD US MINIMUM VOLATILITY ETF (VFMV)....
Trading account is full of ARK funds- Seem to be moving up- Pause in ARKQ this past week-
Looking for ARKQ to provide exposure to the disruptive AI-robotics industry that will eliminate many of the "jobs" , disrupt the automotive industry- throw 10,000 truck drivers out of work in the next decade...And, have you noticed that the office you call is now all remotely answered by a screen of questions - whether it's the cable provider or the investment firm, and the human voice is only reached when it cannot be simply automated. AI will simply transform the world we live in dramatically in the next decade-or two....
As I am watching CNBC as I write this, Cramer is talking with the CEO of Levis who is talking about the transformation of the company and notably finishes apparel with lasers and reducing labor...- meaning jobs- That's why I don't go to the automated checkouts- go where a person is behind the register...
Medicine- Genomics- I presently hold positions in both IBB and ARKG- -as well as VHT- Sector has been out of favor but now seeing some buying interest/,,,

Presently, the trend is higher across multiple market segments- FED is benign- Holding long with tight stops
11-19 update-

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As the vacation week comes to a close, it's back to work, but with a heightened awareness that I need to be more in tune with my investment approach-and asset allocation choices. This week I watched some Stockcharts TV programs- and particularly liked the depth of the Rick Besignor (sp?) videos .
Touching upon momentum shifts- that had been a subject of the markets, it brings to mind that trends often have persistence- While tech/growth seemed to stall and value
gained some ground, but that seemed temporary, with Tech again moving higher. However, the healthcare sector that had been in the basement seemed to catch some buying interest. And some really big moves in a few biotechs lend credence to the promise that this group holds for the future.
Recently I had added a 20% position in healthcare, and also ARKG. IBB. Healthcare had been struggling this year along with the politics, but recently healthcare and biotech have come alive
In doing a look-back of sector performance this year, Tech has gained 40% despite a few intra year pullbacks of 5-10% .
Presently, VGT made a new high this week, and-then, a slight pullback- Price is at the top end and valuation is likely high-
VGT has a 40% return YTD! Not bad for an ETF! SPY is about 24% ! Had i bought VGT early, and held over this past year, I would have seen a very nice gain- While 2018 had seen a 24% rise and then a 22% give back loss going into the year end- the 2 year average return is 30%! Why try to time such out performance?
Well, I've held a mix of funds/etfs this year, and- this later part of the year , I try to overweight sectors in rising momentum- but still use stop-losses to protect from what we endured last year- Remember the -20% decline going into December 24?
What should one use as a stop-loss % below the daily price? Perhaps a weekly chart is worth using to not jump out of a position too early; particularly when the position is trending.. However, look at the wider range of the weekly vs the daily- and the amount of give-back.....

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The markets put in an across-the-board upside rally, particularly the small caps -over +2% today-
Biotech - also moved well- the best performer today that I own is ARKG- up 3.94%, ARKK fund +2.58; IBB
In seeking to be overweight in position size those areas that have momentum, today worked out in my favor-
SPY had a 0.78 return- VOOG essentially the same 0.80; russel 1000 0.84 ARKK + 2.58
QQQ's + 1.18 - but the Vanguard tech +1.47, financials ARKF 1.64;
Healthcare VHT a respectable + 1.36, but biotech-IBB + 2.46- ARKG a solid +3.94!

The Summary chart showing the Intraday performance- Note also the increased SCTR ratings-
i.imgur.com/Ge08P67.png
A one week summary tells the larger story-With ARKG outperforming , IBB right behind, followed by ARKK, then healthcare- and a 3rd ARK fund- ARKF (financials) also outperforming the indexes. If they can keep this up, I'll continue to be a fan-of investing in disruptive technology and innovation. However, I expect the momentum to peak
-but when? I'm particularly optimistic about the healthcare/ biotech sector- not being dragged down by the political rhetoric- and is generally undervalued ...
i.imgur.com/0IGWwG4.png

As I mentioned to a Friend, I have generally shifted into ETF's in general, and only rarely try to jump onto individual stocks-
My wife's AAPL position sold on a raised stop-loss in last week's minor decline, and we swung that position into adding to her ARKK funds.

In my trading account, I sold some underperforming ARKQ and am applying that to my ARKG position on this breakout- with a limit $33.75 - chasing the momentum move up.

One of the investors on Shark Tank- Mark Cuban - reportedly claims "diversification is for fools-" - which makes the assumption that you can afford to lose on a large focused bet. True , only if you have decades and the financial resources to restore the account......Which - I have neither -so stops are my next best friend.

11.26 update...The add to ARKG limit @ $33.75 was gapped over- I've raised the limit to $34.50.
Indexes all closed slightly higher today- Can't argue with a rising market going into the Thanksgiving Holiday-
Not as many funds gained today - Interestingly ., ROKU (not a present position ) gained nicely while lagging yesterday.
The Opiod crisis news affected some of the big mfg's today- and they may hit the healthcare index - or not
i.imgur.com/i8OVq38.png

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Illustrating - Adjusting allocations to shifts in market momentum .
For the benefit of those just viewing and illustrating market momentum.
I've been trying to get more conscious and aware of market sentiments - and the shifts in market rotations- Stockcharts RRG , and contributors illustrate this phenomenon in their various articles, but to be able to take advantage and shift allocations- position sizing- is undoubtedly a real balancing act-
A number of weeks back healthcare broke out higher- VHT, and then Biotech got some buying interest- and Lo and Behold- this market segment is still catching up -

After having been a stockcharts member for more than a decade, Long ago I realized I only barely made use of the site's capacities in content. The contributor content/articles are excellent, and the market updates timely.
One of the tools is the Perf chart- performance chart - that allows you to compare the performance of a different group of stocks/etfs over various time frames- Found at the bottom of the chart page, left side- Put in a single ticker on the chart page, scroll down to the bottom left, click on perf chart , and go back and add a comma between the tickers you want to compare. Also, the default setting for duration is 200- click on that bar, and change the ticker to whatever number of days you want to review.
Also- The summary setting on your chart list can give the intraday, weekly, monthly, YTD etc comparisom- and the SCTR rating shows increasing momentum the higher the number (+90) A one day-intraday may give false hopes- but view the weekly, monthly etc to get a sense of improving strength and momentum.

On Asset Allocation- The S&P 500 is nominally the index referred to as the stockmarket benchmark because it holds 500 major US companies across 11 sectors-
Some of those sectors tend to lead the "Market " higher- like tech, others lower - like energy stocks presently - but the market cycle - as illustrated by Ray Dalio on a you tube example- of a simple-but complex cycle that repeats itself over and over - Well worth watching if you have read this far ...
www.youtube.com/watch?v=PHe0bXAIuk0&t=214s

Back to sector rotation.....I like charts- graphic representations that are easy to understand- and if used properly- to compare stocks or etfs- or sectors- or indexes-
overall performance compared to the others. A real stock advocate- like Jason Leavitt- puts in the screen time to do the macro analysis and then drills down to the micro to find the best individual outperformers-For myself, I'm content to use my limited time to try to find myself overweighting sectors in strength and outperforming the "Market" if possible-
When Holding a "diversified " portfolio, simply means not putting all of your eggs in one position- a guaranteed way to win big or go bust....but using retirement dollars, and taking on Risk with position size requires the use of stop-losses if wrong- as I don't have years to let it ride....It's an on-going learning process of gauging market shifts, and cutting losing investments off early .

Getting back to the oversold health/biotech sector - that appeared to catch some momentum- and also financials-
I shifted some assets into healthcare -VHT-Biotech- IBB, ARKG, and Financials- ARKF, as well as ARKK -
Using the PERF chart feature on stockcharts, I can compare the performances of the various funds- This is sector rotation being illustrated .
The 1st chart is a 30 day picture with the SPY (Market) having slightly better than a 5% return- over 30 days- If this return could continue at the same rate throughout the year , it would be an annual return of 5% x 12 months = +60% annual return- But we all know, that Ain't gonna happen!
But since the "market" is comprised of both losing sectors that drag the average return down, and winning sectors- that raise the index's return up- for the "market" to have an up Close for the day, week, month, year, some Sectors have to gain more than other sectors lose- and note that over time- some of the individual companies in the "Market" will be replaced, merged, etc and will no longer 'exist' en.wikipedia.org/wiki/List_of_S%26P_500_companies
So, within the broad sectors- smaller industry groups wage the battle of sector leaders and losers-
Similarly, in the ETF universe, the over-or under-performance of an etf is comprised of the success of the individual companies it has invested in-
To illustrate the comparisom - The IBB is a large cap biotech index- but ARKG is likely comprised of smaller- and potentially more speculative companies that a re less well-established- IBB had been in the basement as the broader healthcare index had done-better- but all had underperformed the "Market" for most of the year- in disfavor with investors - but a recent market rotation shift has seen buying interest in these sector areas.
Note that the SPY performance over the past 30 days is a respectable +5%- but note that Tech continues to outperform-+7.5%, (and I'm overweight Tech through VGT) Healthcare is +9% , and ARKF is +10%; but take note- ARKK innovation is up +16%, and ARKG +17%- doing 300% better than the market this month- or 3x the return of holding the broad index fund-
Since 90% of professional managers fail to outperform the broad market index , as an individual investor- can I manage my own assets to outperform the index by shifting my allocation to favor sectors in momentum, and then reallocate if the momentum shifts? Seems like this should be a viable pursuit -
Since the markets can be fickle- only by looking in the rear view mirror can one tell which industry shift was in favor, and which fell-out- The essence of Brian Livingston's broader premise- of using market allocation for outperformance.

If you have bothered to read this far- take a few moments to consider what the 30 day performance chart tells us:
i.imgur.com/fDnXodE.png

A view of the past 10 days :https://i.imgur.com/sPj1nQh.png

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ROKU -2 YEAR DAILY CHART-

While I have traded ROKU several times- Making good $$ once or twice and giving a chunk back another time or two- It had been a big mover from the lows made in early 2019- up over 400% for this year- It has the kind of volatility swings that makes one wonder what would be the ideal method to have traded this over the past 2 years-
While I do not have time this Thanksgiving day to do a full manual backtest- I thought I'd start off with the Elder Impulse green colored bar closing above the 10 ma as an entry signal, a red colored bar as a reason to raise the stop to the bottom of the bar, a limiting condition depending on whether the 10 ema is declining below the 50, or whether it is above the 50 ema. Some variables to consider .....
i.imgur.com/XH2a2T0.png
1.Test with a Starting position of $5,000.00
2. Test entering @ market the next day once a green bar closes-above the 10 ema-above the 50.
3. Test entering @ buy-stop the next day once a green bar closes- Buy-stop to enter above the prior day's close
4. No entry on a green bar close below a declining 10 ema -once a green bar closes above the declining 10 ema-, it may signal a possible upturn in the trend- Enter with a higher Buy-Stop entry vs a market order
Exit signal considerations:
1. On any Red bar, immediately raise a stop-loss to the low of that red bar.
2. When trending- the 10 ema inclining above the 50 ema- trail a wide stop at the 50 ema?
3. Optional consideration- Once an uptrend is in place with both ema's moving higher- is a stop below any bar that closes under the 10 ema provide better profitability?
I definitely use this approach in my present trading- whether it's a red bar or a blue bar .... Might be worth while to (later) CONSIDER this as a method to scale out of 1/2 the position on a blue bar stop- and then wait for a lower bar-or a red bar for the remaining half.
Just a few ideas on ways to "test" a TA method using some consistent guidelines applied.