Why not just buy the Nikkei or Topix futures? Better spreads, lower margin, more liquidity, lower commission. If you want Yen exposure you can just go long the currency vs the dollar. I agree with you about the prospects for Japanese equities. It's a 13 year bear market though, not 21 years. My upside target is 15-16,000, and eventually 19-20,000. Downside IMO is 1000-1500 points max.
Cutten, Certainly, buying futures on the Nikkei is another alternative. I personally do not trade any futures contracts, but it is always a viable option. I like the weighting of the companies that comprise EWJ, as it is different than the Nikkei itself. You can check it out on www.ishares.com. Agree with you about risk/reward on the Nikkei from here. Feel the same way about most Asian countries. Deron
Below are the details for a possible trade we have our eyes on today. Explanation follows below the chart. As always, do your own analysis: OIH - Oil Services HOLDR Long Trigger = above 58.03 (above yesterday's high and the 200-day MA) Target = 60.40 (retest of prior high from October 8) Stop = 56.80 (below the breakout level and yesterday's close) Notes = As you can see from the chart above, OIH had a high volume breakout yesterday that pushed it above its primary downtrend line (in red) that has been in place since mid-June. It also broke above its 50-day MA yesterday. The black circle illustrates the break of the 50-day MA and downtrend line. Although not shown on the chart above, volume also spiked sharply higher in OIH yesterday. If OIH breaks above yesterday's high, we expect it to test the prior "swing high" from October 8, just over $60. There is a 200-day MA overhead, so we will only look to buy OIH on a break above this 200-MA. In addition, a break over the $58 level will put OIH above both its 20 and 50-WEEK moving averages on the weekly chart.
Deron, Good choice here. Do you also do any fundamental analysis on the ETF or industry group prior to taking a position? It seems this move on oil is somehow related to the move in gold and other commodities. I'm not up on the fundamentals of these producers.
We don't really do any fundamental analysis, but we do try to keep the big picture in mind because it will ultimately affect the likelihood of the technical setup working properly. Since commodities are indeed strong right now, that should aid OIH, although it has lagged other commodities over the past few months. Basically, we just like the big technical break of the 6-month downtrend line, 200-day MA, and 20 and 40-MAs on weekly chart. We remain long OIH from 58.03 and will continue trailing a stop towards the target of 60.50 area. Our stop has been raised to 57.50 now. Deron
We took profits on half the position of OIH at 58.70 today, netting a gain of + 0.65. However, we remain long half the position with a stop at 58.20, and a target that remains at 60.50 area. Just an update. . .
Hello IndexTrader, No, we are not. We closed out the remaining shares at 60.30 for a gain of + 2.25 points last week. I apologize for not posting the results of the remaining shares. Anyway, I wish we were still in the trade! OIH took off like a freaking rocket today, as you probably noticed. We missed the re-entry it, though we initially planned on buying a break of last week's highs. Now we will wait for a pullback and look to get long if it still acts well. We bought TLT (20+ year T-bond ETF) at 86.30 yesterday and are still long. It broke its daily downtrend and looks like it will test the 200-day MA now. It does not move much, but large share size is handled well with that ETF. Deron
Folks, Here is another ETF site that covers the overall ETF industry. It is not a "trading" site. It includes lists of all US / International ETFs, and an archive of newsletters that provide insight into the ETF "industry". Each past newsletter includes major ETF news (new funds, etc.) and a list of all the major ETFs (with info) in the back. <note: I am not associated with this site> http://www.exchangetradedfunds.com/ Deron.... it is good to see you on ET. Best Regards, - Greg
Although there is not yet an ETF that tracks gold and silver prices, I wanted to post my thoughts on something interesting that I noticed last week. As many of you know, I have personally been bullish on not only gold and silver mining stocks over the past several months, but also gold and silver bullion itself. In case you are not aware, Gold futures corrected last week from a high of $428, down to $407 per ounce, before finding support just above its 50-day MA and bouncing to close over $412 yesterday. Given the large gains in spot gold, the correction was not surprising and was actually healthy for the precious metals markets. While gold was correcting last week, I noticed that the Silver futures were NOT correcting at nearly the same percentage basis as gold. Upon further examination of the two charts, I also noticed that Silver had rallied a much higher percentage than Gold during the metals' most recent upward move. This means that Silver, which traders seemingly had forgotten about, has begun to show relative strength to the price of Gold. One clear example of the relative strength of silver can be found by taking the spot price of gold and dividing it by the price of silver. If you did this calculation on December 1 of 2003, one ounce of gold would have bought you 73.8 ounces of silver ($403.80 divided by $5.47). But, based on the price relationship of gold and silver on December 31, that same ounce of gold would only buy you 69.6 ounces of silver ($416.10 divided by $5.96). To put these numbers in perspective, consider the price relationship between the two metals during their major bull peak in January of 1980. As of January 31, 1980, gold futures were trading at a whopping $1,297 per ounce and silver was trading at $49 per ounce, meaning the gold/silver ratio was only at 26. While I am not implying that the ratio will drop that low, it is something to think about. According to my rough estimation, the historical relationship between gold and silver is somewhere in the 40s. As of yesterday's close, which factors in last week's price correction in both markets, the ratio is now down to 65.3 ounces of silver per ounce of gold. Even though you may not trade gold and silver futures, this divergence is important to know because it tells us that the risk/reward of trading the mining stocks may favor those that concentrate on silver mining rather than gold mining, at least in the short-term. Instead of stocks like NEM, PDG, and ABX, you may want to research and consider silver mining stocks such as CDE, SSRI, and SIL, just to name a few. We bought CDE for a swing trade in our Real-Time Room yesterday and I have also personally bought more silver coins and bullion, while keeping my gold investment at the same level. Take this analysis for what it's worth; hopefully some of you may benefit.