**REPOSTED: Originally on technical analysis page. Sorry for misplacing it.**
Sorry, with the holidays I forgot to post my addition of upro. This is a short term pickup. The market sold off hard and volume tapered off. If you did not pick it up and want to, maybe wait a little on the open as TRIN for the spx is very low. To be fair I do not like the market action, but again this will hopefully be a quick short play.
Reason for sale: I think VIX is overextended. We were in upper 22's a couple days ago and now upper 14's. It probably will go just a little lower, but I don't need to hit every top and/or bottoms, just good hits along the way. This certainly was a good hit.
Nice quick hit. Market went too deep premarket down for me to stick around.
Purchase Reason: see last couple pages of tech analysis. XIV is maxed out, and really there is not a lot more good news that has not been priced into short term that I can see. We broke 20 EMA and price is getting lazy.
12/3 Update - Sold out of SPXU today, took a small loss, but nothing too much, still up 7.5% on the past 30 days for my swing trading, but I would be foolish not to consider what is happening.
There are a couple reasons I am backing out now. First, MACD on SPY is about to go positive. That will likely trigger a number of buys and algo's as well. Today had the possibility of being a catastrophe but it wasn't. I have three homemade daily algo's myself that have a pretty good return rate as well. They have some poor drawdown, but the end result is good. I do not trade strictly by them, but all three went bullish. On the flipside, VIX:VXV went up to 93.4%. Ouch, that is not good. I can tell you something big is coming, but my plan is not going according to schedule and I do not want to lead you or myself astray. There is no pride in trading and I will not hold a trade because I hope something will go down. Hope is a sucker's game.
@TradewithMojo (stocktwits) brought up a subject that I want to think more about about as well. This may not be the big down movement that I have been looking for, although it may still be down. He offered some advise on the McClellan Oscillator that I had missed, and we may have one more pass back up.
Our plan had been going very well for weeks, and we have made money on it, 7.5% for the month, including today's loss, but I am not going to publish some rubbish on here simply to offer reading entertainment. When you don't know what's happening and you are in a loss, get out.
Lastly, I have been making a mistake, which I need to correct. I have been playing bear swing trades and extending them to gain exposure. This one did not end real bad, but if I continue and these crazy bulls keep rallying, I will suffer huge losses before I get a chance to make money on the way down.
Price action has been strengthening for the past 30 minutes, and we held above 137.07, which was my 3rd wave down marker. I have no idea how the Fed minutes will go later on at 2:00, but expect for a catastrophe, I see more upside than down for next couple days starting now.
11/20 Update: Please see my post under technical analysis for main decision to sell. To add to that Dr. silver is down a little and IWM is not cooperating. It is under a fib line, so there is resistance. We need all the indices to cooperate. We will buy back at a better price. There still could be indecision today and SPY may still increase, but R:R is not there this morning.
SPY at 200 day, XIV near bot of 30 min and daily BB. See my TA for other analysis reasons.
Divergence between SPY and XIV. XIV seems to be topping at the 20 day EMA. Daily STO is coiled to spring, but every frequency under that is at top of STO. Really was torn between holding another day and collecting a profit. You have to remember opportunities are abundant, but money is precious. If it goes up more tomorrow, it's someone else's opportunity today.
STARTED 11/2: I have been waiting on a good short set-up. I could have, should have, would have, but totally didn't short the market early today. Looking at past history, SPY made always made it back up to the top of the first std dev Bollinger Band. I figured today would have been up, faded and possibly came out a doji, and that was the set up I had been looking for. While I am not ecstatic about my buy point, I do not think today's rout was a one-and-done and both SPY and XIV exceeded average volume. We should approach three targets 140.4, 139.4 and potentially 138.4. I will post more tonight.
UPDATED 11/6: Sold today, tomorrow is a big day with lots of unknowns. Weekly points mildly down, Daily points strong up, Hourly Points strong down. We are sitting right on the 20 day EMA. So if you can't get a read on the market, don't gamble. We are in a bear market with QE rolling. Volume started thin and from what I could tell an HFT spike around 10-ish got the bull rolling.
Again, while a virtual trade and not real, it is important to document your decisions and why things worked or did not. This would have been a safe bet, but we are playing against the market. Swimming against riptides is always a bad choice. Again, while not a real transaction, I would have probably only taken a 6-12 point (1-2%) loss before letting a stop-loss kick in. 200 days moving averages are about a safe a play as possible, and it is not to say it will not go back up next week, but again it is against the tide.
I usually do not have a true stop-loss entered, as price spikes are so common, that they will trigger it and run the other direction, but I will check pricing every 15-20 minutes at work to keep tabs. I do not hesitate to take a loss. We are swing traders and stuff happens. It's a game of probability and discipline.
This was not a break-out or growth stock choice, as IBD has AAPL rated an 'E'. It was a probability play against the 200 day.
The reason real money was not used in this trade, was that it was going against the bearish market trend.
For full disclosure, I am not actually entering Aapl, but I will make a virtual call here. For this call, I will pick-up Aapl at $590.00 even. I will update later with a virtual close too. Many things are possible, but we take the probable. It is probable that this stock will bounce from here. Being at work now, I do not have time to do a full TA. Since it is resting on the MA, you can place a stop not too far below.
Today has been a good day in the market so far. It's easy to get trapped into saying "Oh, if I had bought in to UPRO, I would be up 5% from the lows." This thinking is parallel with your neighbors or family members that go to Las Vegas and come back bragging I won $20,000 while I was there. There is a 95% chance it was not their first trip there, and how much did they lose to get that $20,000. And even if it was, after winning like that, they will go back and "donate" it back. The market not only has to go up, but it has to be somewhat predictable, and repeatable. It's okay to sit this out. This still feels like a bear rally. I am in 80% cash, and a little slv that is a longer term hold. For that one, I am playing the QE effect, since I am not as effective timing slv by TA alone.
For my 401, we are currently diversified into:
10% Large Cap
10% Small Cap
As you can see, I am bearish for now, and am looking for a good short play on SPXU, but waiting for a nice set-up. You have to be cautious on shorts with QE running, elections, etc. Be selective, but not scared.
I went from long to cash positions today My trades were as follows:
UPRO: 85.5 -> 85.22 (0.3% Loss)
XIV: 15.94 -> 16.42 (3% Gain)
What did I learn from this trade: I lost around 1% in the final minutes by doing market sale at end of day. When you are bailing out because the market sucks, do not do end-of-day. Algorithm trading works well with EOD sales, but that's mainly it. Duh!