Category: Trades

Ready to Go Short

I should have let the Russell 2000 short run longer. Fear, more specifically volatility,  let me exit the trade to soon. With the big rally over the past couple of days I feel comfortable shorting the Dow.

I went short at 23037. Stop is placed at 24000 with a target of 21000.

2018 Year in Review

Futures traded are listed below. Profit/ loss is based on a per contract trade.

Symbol Position Date
Position
Opened		 Price
Position
Opened		 Date
Position
Closed		 Price
Position
Closed		 Profit/Loss per contract
DAX Short 10/10/18 11640 12/6/18 10800 $4,200.00
ES Long 7/15/18 2804.25 9/30/18 2921.75 $5,875.00
BTC Short 1/9/18 15144 2/15/18 10000 $25,720.00
CHF Long 2/4/18 1.0779 3/9/18 1.05 -$3,487.50
CL Long 11/25/17 58.97 1/19/18 63.68 $4,710.00
CL Long 4/13/18 66.7 5/11/18 71.53 $4,830.00
Cocoa Long 3/2/18 2302 3/13/18 2536 $2,340.00
Feeder
Cattle		 Short 3/19/18 138.25 4/16/18 142 -$1,875.00
GBP Short 5/1/18 1.3638 6/20/18 1.32 $2,737.49
GPL Long 11/1/18 862.9 11/12/18 841 -$1,095.00
JPY Long 2/15/18 0.9438 4/24/18 0.922 -$2,725.00
NASDAQ Long 5/10/18 6958.75 6/25/18 7100 $2,825.00
NG Long 12/17/17 2.622 1/14/18 3.208 $5,860.00
NG Long 2/11/18 2.574 4/24/18 2.82 $2,460.00
NIY Long 9/14/18 23110 9/30/18 24200 $5,450.00
NZD Short 4/24/18 0.7115 5/1/18 0.6997 $1,180.00
NZD Short 7/15/18 0.6759 10/5/18 0.6445 $3,140.00
RTY Short 12/7/18 1449.5 12/19/18 1347 $5,125.00
USD Short 1/6/18 91.76 1/14/18 90.59 $1,170.00
USD Long 8/14/18 96.19 8/22/18 95 $1,190.00
ZB Short 9/14/18 141.75 10/5/18 137.16 $4,590.00
ZB Long 11/23/18 140.14 12/4/18 143 $3,860.00
Total Realized  Profit/Loss Futures $68,004.99

Portrait of a Top

World markets are making topping patterns. The US has just completed a topping pattern. I will watch the market action on Friday to decide if I want to go short. The volatility is so high I might pass this trade up.
My years of watching markets, I have noticed that day patters that launch into weekly patterns are some of the best trades to make.
For instance, looking at the daily pattern for the SP500 and DIJA show a descending triangle pattern.

This has launched into a massive double top on the weekly pattern.


There is not much resistance below this point.
While I took the Russell 2000 short and escaped with a nice profit, I was concerned about the volatility. If you have the stomach, I would recommend a short here and now.
As I recommended a month ago  here and here, you should be on the sidelines for this correction with cash.
Certain data points have gone from green to yellow. I am not ready to declare a recession forecast just yet though. A month or two from now the picture will be clearer.
Now I want to discuss the bond market, since the bond bears are out and about predicting rising interest rates. As you recall, we made a nice profit going long the bond market here.
Take a look at the chart below.

The moment investors start to panic they rush into the bond market. This indicates to me that during the next recession bonds will rally. Until I see a change in the psychology, there is no reason to believe the bond bull market is dead. The ‘muscle memory’ built into this market is 40 years in the making. The fundamental component for a bond bull market ended 15 years ago. But here we are. It could go on for another 10 years. I think the possibility of negative interest rates and 30 year mortgage rates of 1% is very possible.

Small Caps Break Down

The Russell 2000 broke down today. I am taking on a short position before closing. The volatility is high and the risk of getting stopped out is good but I am willing to risk it.

I placed my stop at 1490 and the target is 1350.

Bonds Complete Double Bottom

The 30 year bond has completed the double bottom and the 143 limit was reached for a nice profit.

Like clockwork, investors piled into the “safety” of bonds on signs of trouble. I suspect this correction will last a little while. I am staying clear of US stocks until I feel this correction has completed.