FXE did stop out $108.99 weakness was showing, and - TAN also declined as Oil declined-But according to a discussion of Tan on Fast money- the ETF dropped Hard because it held a china solar play that comprised 12% of it's weight- and that Chinese solar (not an ADR) company lost 50% of it's value yesterday in the chinese market! I had raised a stop-loss to just below the closing price- which- had it been hit in a nice orderly decline-from yesterday's close- would have me out of the trade with a small gain or at break-even- Instead, Tan opened with an -8% gap down open- selling my position $43.34. Fortunately, I did not have much of a position - Not because of any planning on my part- simply because i had a few freed dollars and Tan looked good. As far as a correlation to lower oil- Oil did not decline that significantly- but if the market thinks oil will drop lower- Tan competes with cheap oil and gas. This type of price drop can occur on any trade- well below the stop one expects to get executed in an orderly manner. So, Even if one has a conservative % stop in place for all entry positions- a market wide reaction to a news event- could cause a wider and unorderly gap down on all positions at the same time- Even the rare "flash crash" could occur- and the only way to protect from that would be to have the stop-loss with a limit low price attached- I'll try to upload a chart tonight . Worked.
Market up slightly- Getting about 1/3 account value clearing- into cash- I think I want to look into the global healthcare as a segment worth getting some exposure into- XHC is a global healthcare that is hedged with Canadian currency- This stuff can get complicated- for someone that had to take Algebra 3x to get through it! IXJ is also a global healthcare play- and there may be many more ways- JNGLX is a Janus managed mutual fund that a co-worker has available within his IRA- and that prompted me to consider that a wider diversification in Health/bio-tech - is likely a good thing- Extending that exposure to a global market reduces some US Risk in a category that has been very dominant. I haven't made an actual selection yet- will have to review over the weekend.
Watching Options Extra- - the discussion concerned the VIX is near a low level- and ways to play/protect from the complacency . Since I have nada experience with options- I plugged into Google and several hedged SPY ETF's came up- Based on the $vix. As the Vix rises, the SPY generally declines- It's an interesting concept to Hege a long SPY position- particularly in times that seem choppy- and indecisive- all in one vehicle- It's interesting how these ETF's are evolving- into much more complex instruments. I was considering looking at taking a position in $vix due to it's low level through one of the etf's- and came across this hedged offering from JANUS- I don't know how to evaluate the merits or expenses- but potentially - if we enter into a less than trending market- a hedged position might be worth considering. https://17eb94422c7de298ec1b-8601c1...RSK Hedged Equity ETFs (4Q14)_exp 9.30.15.pdf https://www.janus.com/advisor/excha...pdzeCFEu3zRIuv6NhJtV_-KsOFXwqAdp_XhoC0m_w_wcB
A co-worker with another company and i were discussing fees and expenses in our retirement plans & he shared with me some of his investment opportunities in his company 401k plan- 4 of his selections to choose from were Fund of Fund- or "Portfolio series-" Where the manager of the portfolio series selected different % weights in 4 different American Funds- At a very full expense charge- along with a hefty annual report charge, and 12-b-1 fees- and also an "other" fee. It would appear that The fee this portfolio selection charged was in addition to the fees that each of the component funds would be charging- If the fund managers of the individual funds were doing their due diligence- The fund manager that simply pooled the various funds together should have a very minor job in choosing the fund weightings in the allocation . I would hope to be mistaken in this double-dipping assessment-will look into it further with him after the weekend- However, as we did the initial assessment- of some of his offerings- we found that he is paying a full initial 5.75% commission on American Fund products- That's a pretty hefty load charge- In researching these funds- looking at morningstar.com for their quality ratings and then Yahoo finance- and checking out the varios selections- Profile, expenses, etc- You find a category that compares the expenses of the fund against comparable funds in the similar market segment- All of the American funds came in substantially higher in the expense category, taking at least 5 years holding period to get back close to the average cost of holding a comparable fund- That difference is likely because many of the other comparable funds are no-load. - But WHY pay such a steep load at all? There are many other options available. What is interesting, is that he also has some limited and focused no-load Janus funds to also choose from- He was not aware of the difference between a load fund and a no-load. Also, his advisor also charges him some various fees for book keeping, records & statements, etc. HMMMM... I loaned him a company of David Swenson's "Unconventional Success" - And since he has 30 years to go-forward and learn more on this subject- I believe he will become a well informed investor..over time. Since i am not qualified to try to be anyone's financial advisor- I recommended he go to a fee based financial advisor and spend an hour's time and a few hundred dollars to get an authoritative review by a qualified professional that would review his present options and be making recommendations- acting as a 'fiduciary' to him- putting his interests first and foremost, and not recommending financial investments where the advisor receives compensation 'kick backs' or commissions from. My layman's approach would be to recommend he invest through his company the maximum to get whatever company match is available- Invest that in the no-load funds 1st-as long as he can find appropriate low cost diversity- Then fund a Roth through a Vanguard brokerage account- and -if he has additional assets available- then fund a traditional IRA in a Vanguard brokerage Account up to the allowable amount. OK_ This site is mostly about trading- and that can run from the gamut from longer term to very short term time frames- But don't forego investing and bet it all on your trading acumen. Be Balanced in your approach- It is just my opinion- That - like the principle of diversification -holding in a number of positions is a method to reduce Risk from the unexpected Black Swan event- or Flash Crash- One also should not depend on one's trading account to be one's ultimate sole eventual retirement account- If one has a robust amount of trading success- (congratulations)- But do not be a one horse Cowboy- roll those excess profits into something that is less at Risk- for the very long term- and greater expense than anticipated. How do I share this? I became aware of my Own lack of preparation for the eventuality that at some point- kids are grown, it's me and the Spouse, and we are both getting older- It becomes a "HOly S----" moment when you get the Social Security statement that says in a few years , you will recive 17% of your present annuaL income - AND YOU BETTER BE PREPARED TO MAKE UP THE DIFFERENCE ON YOUR OWN.! it's an OH! CRAP! moment- For the Young Bucks out there full of testosterone and confidence- And perhaps a touch of arrogance and hubris- News Flash- Social security will not be there for you for 20% of your income needs- 20 years from now- The responsibility will be on your shoulders to have planned accordingly- because the future US of A will be fiscally more Austere- If you are only Trading, you likely do not hold a specific longer term vision- Can't be bothered? WHY post this "STUFF" ?!!! on a trading site like ET? Likely most here expect the future will be their's for the taking- A certain amount of positive attitude is beneficial in the trading/investing business! But also a certain amount of realism needs to be employed- One of the trends in the financial world is the separation of the Have's from the Have-Nots- This is noted in the past 5-6 years as those that have benefitted from having assets that have advanced because of investment advances- Where those that are working for wages- actually have no investments- They have no assets allocated- because they pay 2 weeks of salary to pay for Rent. Basic Housing- OH- and you also want to eat food? There are a lot of us that fall into the category of Have-nots- and we will be increasing as the future unfolds- This is not a social-justice statement- It is just an outcome of population, economic world-wide swings , and perhaps a lack of opportunity, or perhaps not making a good choice in one's career selection..... It is my belief that America the bountiful had it's highlight zenith 20 years earlier- and that the macro swing that began with NAFTA- has now achieved a rebalance of wealth that is indeed global. What does that have to do with you and me? And our monthly checks? From the Gov't? From our investments? As i pursued some Morningstar portfolio selections today- Their retirement portfolio at retirement age was 1.5 Million Dollars. - Yes That is a large chunk of assets to have sitting - available. Even with that large an amount of assets, The annual withdrawal seems quite small. The Morningstar interview lasts about an hour- but- For those of you that may be interested - It offers a different type of reality that most of us do not even consider as remotely necessary- But the reality is that this reality is what may occur - We live longer thanks to the greater medical research- And, if you are someone that tries to prepare- How do you get to the promised land of having the assets needed for a 30 year existance past retirement? http://www.morningstar.com/cover/videocenter.aspx?id=690198 I never thought this way-
Holding overweight positions in PJP- Rationale has been that it has been in a multi year period of healthcare outperformance. Ideally it will resume that same outperformance- but the last couple of months have shown a couple of significant pullbacks- each with slightly lower lows- So , there was no real "protection" provided if one held a stop under the major swing low on the daily chart- one got chopped there on the deeper decline- As this occurred, the momentum was declining- the moving averages flattened as price dropped into a sideways consolidation. In the left side of the chart, an initial pullback and drop below the fast ema was a good point to take the move higher- as the 1st reversal move up held and the uptrend resumed. In the recent pullbacks, the attempted 1st reversals higher (several up days) failed to see any follow through- and put in a second decline lower- Now, it appears we are in a sideways wedge- So, the environment has changed- sector rotation is not favoring this sector -as well as it has done in the past- SPY has made a new high- - after a period of sideways up and down- and ideally this "market" momentum will continue to draw PJP- higher- (Biotech is doing better). Presently, I view PJP at the mid point of a declining large wedge- with several pts higher being the target., to tighten stops on some of the position ,lock in some gains, . While getting remaining stops on a core position up to my averaged entry cost.
Had a nice Memorial day . Thanks to those that have served, and rememberances to those members of our family that served, survived, and have since passed on- including my father and my wife's father- serving in WW2. As i posted some candlestick charts earlier today of PJP- the desire to protect profits- or reduce a potential loss is always a predominant thought in most trader's minds. Viewing a renko chart takes out some "Noise"- But I have tried to reintroduce that view of Noise by using a 2 hr RENKO on the hi-lo display - not just the closing price display. (CLOSE Setting) - Since RENKO's only generate a new brick when price exceeds the ATR amount for the average periods - the 2 hr chart suggests $.40 is the averaged price range movement in a 2 hour period. When i view charts, and swing lows in trends, I generally am inclined to assume the pullback swing low which sees price move higher and resume the uptrend because a viable position to set a stop-loss below- As price has ceased to be trending , and is now in consolidation in something of a declining wedge, I think it is safer to assume that additional weakness could be in a deeper decline- This recent upswing is now mid range in the "channel" , but price has just moved up from a prior swing low. This is an opportunity for price to move up to the top of the channel - several points away- Looking at the Renko chart- The chart itself is bullish- Looking at the attached indicator- it seems to confirm the bullish chart- When I view a price -candle chart- I see the 4 days move higher and a sideways consolidation. The question becomes- What is an appropriate stop-loss and how is that to be determined? Each time frame would suggest a different stop-loss some very tight, and progressively widening- In this instance, I like the multi brick consolidation on the last swing- as a possible support- Just for fun, I've added a trend line based on the unseen price move- The 3 brick consolidation shows the low of the bricks as $75.60. Since the trend is positive- I will allow 1 atr value below the swing low $75.60 - $.40 = $75.20. In the event the price turns negative, and looks to decline- I may have to respond with a higher stop.
Stopped out on Hack $30.25 on the decline. This was a rasised stop-loss, more aggressive approach. Locked in some gains. Very short term trading stop-loss to lock in the profits on a larger position/. The larger markets all declined -1% + - Dollar went higher- Interesting- Biotech declined -.5% while Pharma lost -1.0% I think I'm going more defensive- with raised stops- right here- and allowing the cash component to increase and not forcing any trades-I'm not concerned that I will miss out on any big market upside move. Perhaps i am simply weary of the indeciseiveness of the market- it is not a trend trader's ally presently. I think I wish the discussion around the "When" the Fed will act to increase rates to finally see a rate increase- small - but at least a sign that the belief is the US economy is on the path to stronger growth- I would like to offer a more positive outlook- but realistically have to get defensive on positions that are displaying weakness. When everything drops -1% - on little actual news- it suggests we are walking on eggs- I'm tightening and not looking to jump into long positions-
Thanks O'Gracious Market! for thy benevolence this day! Not to be sacreligious- but today was a day that the markets moved higher in tandem significantly. And my tightened stops were not activated! Nasdaq up 1.47% Spy +.92 Dow + .67 Oddly enough the dollar was also higher UUP- just marginally- and HEDJ was higher- +1.2% after dropping sharply yesterday. HEDJ is relatively choppy- on the 2 hr chart- - Gap moves up, gap moves down- lot's of non-trending space- above and below the fast ema. I think the way to stay with this trade is to use each higher major swing low under the ema as a level upon which to set a higher stop-loss. That averages out to be a 2% Risk on the 2 hr chart. That means my raised stop is still below my break-even cost. DXJ is more along the lines of an 'easier' stock to hold- A fairly clean and well-defined it has trended higher in the past week since I took the entry - that's a nice change- and is clearly well in the green as a likely secure profitable trade. I should post of a chart of a winning trade now and then-As they do occur - not with the frequency I would like however! It has been a difficult grind over the past months. Really has not been worth the effort or time expended- At least not in profits-and in hours in the pm. Have to start calculating a personal time value for this stuff....... but perhaps in intellectual involvement, it has kept my toes in the fire -interest alive. The XBI position moved up $3.87 or 1.66% and is sitting at a breakout-resistance line at $237.00 prior highs. My IB entry at $224 + change looks good here- but keep in mind that dollars do not count- convert to % gain or loss - and the $13.00 gain on XBI is only 6% in the money- and my raised stop-loss will capture even less if executed. I am not impressed with my PJP- Pharma- position- Not only am I overweight- based on a sense of historical performance, I find I am underperforming the SPY relative to market movements. I feel I am not in synch with what sector rotation may be occurring- and frankly that is a byproduct of a narrowing market sector rotation. The question one has to ask is Where will the market go tomorrow? To have a balanced market that gains- growth should be seen in wider market segments.Not in narrow segments- It 'feels' as though we should consider we are near a market top- But guys like Peter Schiff have been proclaiming the top is just around the next corner- for years- eventually, their perception of valuation & stock prices will likely come to pass. I heard tonight that one market follower thinks prices are 20% too high on a valuation metric. Eventually, somebody will look back and stand up and declare THEY predicted the market decline! Whenever it does occur!- I will continue to try to trade WITH the trend- and not the more rationale belief that stocks are overvalued-but I'm raising stops as I go higher-
Thursday- Markets were slightly down today- China had a big sell-off - On Tuesday, My Hack position sold - I had repurchased HACK $29.85 back on May 5, and sold all 100 on the pullback Tuesday $30.25. I was reacting to the larger drop on Monday-As SPY gapped down lower on Monday, tide going out of the market. Most positions also declined hand in hand with the SPY weakness . I tightened stops on all positions- the goal being to not have a winning position turn into a losing position. Following the lower drop on Monday, I moved my stop up below the Monday close- The opening on Tuesday went lower- activated my stop-loss- and after 2 hours reversed and went higher. Had I been a smidge wider with the stop- .....But this is the Achilles Heel for all traders that desire to hold a position for overnight- or over a few days-or for a longer term. How do you stay in the position during periods of market flatness? By holding a stop -loss that does not crowd price- However, If one is not in profitable territory with the stop- Nothing to brag about at all. - a 1.3% gain- on a $3,000.00 position with a hold duration of weeks. IF my math is right, that is about a $40.00 net gain- No wonder I'm not getting back to even at more than a 4 legged creep. 2 crawls forward, 1 crawl back. With the market reversal going higher- I reentered HACK today with a new buy-stop entry that filled 50 @ $30.48 I have to use the most recent swing as my stop on this trade- $30.00 which means i am initially risking .5/30 or 1.66% . I did not go back in with 100 shares- only 50 shares . This is to get my exposure more in line with a more conservative balance.