Trades – Page 111 – Stock Picks & Trades

The Multi-Decade Base

If you look at the performance tab you will see I made a mini fortune by trading natural gas over the last 2 years. It was 1.011 points to be exact. That’s over $10K per contract. If you went long 10 contracts, that would be $100K. Let’s just say I could have enjoyed this entire year on a beach in Hawaii thanks to natural gas.
Natural gas is approaching a multi-decade base.

I am just like everyone else. 99.99% uncertain about everything. In that 0.01% of certainty, I am positive that natural gas will not got to zero. Forget about the weather. Not a single person knows what the weather will be in 2 weeks, let alone what next winter looks like. Forget about the weekly natural gas storage report. Not a single person knows what it will print one year from now. Forget about the LNG market. Boom or bust your guess is as good as mine. You buy things when they are cheap. You sell them when they get expensive. At $1.886 per MMBTU’s, I am a buyer.

US Market Update

The daily chart formations for the DOW and SP500 have completed.

However, I am not closing out my trades in these two markets since they completed a running wedge on the weekly charts.

The completion of the running wedge puts the DOW at 32K and the SP500 at 3500.
The Russell 2K is still advancing but taking an eternity to get to its price target of 1750.

Naturally, I regret closing out the NASDAQ trade early since it has been the strongest market.

The completion of this running wedge puts the NASDAQ at 10,000.

NASDAQ Trade Closed Out

I closed out my NASDAQ trade at 8528 for a large profit. The target was 8600, but it got close enough for me.

There are two reasons I wanted to close this trade.
First, I will have to roll over my December futures soon.
Second, the trade deal with China is supposed to finalize this Sunday. I do not want the market to gap down on me when futures start trading again Sunday night because of some botched deal. I am still long the Russell, SP500 and Dow. If the market does gap down Sunday night, my other trades might get stopped out. However, I will still be in the green because I took the profits from this trade.

Small Caps Ready to Join the Party

The Russell 2000 broke out of a 10 month rectangle.

Stop was placed at 1579. Target is 1790. For the DOW, SP500 and NASDAQ trades, I moved up my stops to a break even point. Once a trade moves 25% of the way to my target, I move up my stops to at least the break even point.

Running Wedges Completed and the Bull Case

Technical Analysis
Major US markets just completed running wedges.

I am already long all three markets. I might add more to my long positions Sunday night.

Housing
DR Horton reported its forth quarter sales. Homes closed increased 9% and 10% in value. DR Horton orders, which indicates future sales, were up 14% YoY to over 13K homes.

No Recession
Money flows into stock equity funds have turned positive again.

This type of action would not be happening if the US was headed for a recession.

DOW Breaks Out

The Dow Jones broke out of its ascending triangle this morning. I went long at 27,562. Stop was placed at 27,260. Target is 31,500.
The pattern has been forming for six months and the break out coincides with an all time high. It doesn’t get more bullish than this.
It also looks to be completing a running wedge on the weekly chart.

Currently, I have open positions in the SP500, NASDAQ and DJIA. I am still waiting for the Russell 2000 to break out.