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Commodities and Stock Index ETF Trading, Working A Pivot Point Stop

Companies / Exchange Traded Funds Jan 11, 2010 - 12:28 AM GMT

By: Bill_West

Companies

Best Financial Markets Analysis ArticleHello Everybody

Trade Actions: Buy RJA ( Agriculture Commodities ) at 8 or better on a Limit Order Buy SBB ( Short SP 600 ) at 38.4 on a Buy Stop Buy PHO ( Water ) at 17.5 or Better on a Limit Order


Tighten up stops on positions again

Market Outlook/Potential Opportunities:

The up thrust is here. It is a very unique one indeed. One day the Nasq fails and the SP moves up. Then the next day is just the opposite. Friday was an outside day to the upside on the Nasq and it established an outside week. ( Lower low then a Higher high over the previous bar ). This outside week unfortunately knocked us out of our technology fund. Where the Stock Market finally stops is difficult to ascertain, but I do have some indicators telling me to now watch out for an outside day and week down.

I am not sure that will happen but just in case, we are going to implement our pivot point stop loss strategy. For clients that have been with me for a while, you should already know what this is. If you are new to the service, the strategy goes like this. We add up Fridays High, Low, Close and then divide by 3. This is our pivot point. Now IF Monday starts out strong to the upside and I am going to repeat this, IF Monday starts out strong to the upside, you then put in a pivot point stop on all of the Stock Market positions.

If we start out Monday Lower, then we will just use a straight stop. I will publish both of those numbers. This is a difficult decision but we must tighten up our stops in order to protect our profits. We are running the risk of getting stopped out only to find that the market resumes its upward thrust and we are left out. That is the chance we must take. The minimum upward targets on the indexes have been meet so a correction could come at anytime. Even though the minimum targets are in I still believe S&P could hit 1200 before a correction sets in. Also the market is quite complacent here so any little trigger could surprise people. Do we get short here ? I am not convinced that is a good strategy right now, but I we are going to have one order working just in case.

Gold will end up trading between 1500 and 2000 dollars an ounce. Corrections will come like what we saw the last few weeks but we will stay with it through thick and thin. Right now Gold is taking a pause as it allows the other metals like Platinum and Palladium to catch up. If you look at these two metals, they are off to the races. Once they are all in sync again, I expect Gold to resume its upward course.

A new subscriber asked me how do I enter positions that have been filled a couple of weeks ago. It does become difficult to do and must be done very carefully. Right now it is not the time to be entering any long stock funds, but I believe that Gold and the Gold mining stock fund is now resuming its course, so you can now enter those positions. This market letter tries to max out at a ten-position limit, so each fund should carry an one/tenth weight in your portfolio.

Ditto for Copper. We are now long a Copper fund ( JJC ) . Recession or not, there is always a high demand for copper. We will have a stop working on this trade though. On an interesting side note: Did you see that China has negotiated a long-term contract with Afghanistan to develop their copper mines. We do the dirty work and China picks the fruit.

Current Long Portfolio:

Buy SSO (Proshares Ultra SP 500) at 36.6 It closed at 40.4
Sell stop at 39
Pivot Sell stop at 40
Bought JJC (Copper) at 42.1 It closed at 46.9
Sell stop at 46.4
Bought ITA (Aerospace) at 48.8 It closed at 53.5
Sell stop at 52
Pivot Sell stop at 53
Bought EPI (India) at 21 It closed at 23.1
Sell stop at 22.8
No Pivot stop
Bought GLD ( Gold ) at 107.2 It closed at 111.8
Bought GDX ( Gold Miners ) at 46.7 It closed at 49.8
Bought QQQQ ( Nasq 100 ) at 44 It closed at 46.6
Sell Stop at 45.7
Pivot Stop at 46.2

Current Short Portfolio:

None

Recently Closed Positions:

Bought RYT ( Proshares Technology ) at 41.8 Sold at 46
Sell stop at 46

To learn more about my Fat Pitch ETF Advisory, please click here.

By Bill West

If you're interested in continuing to receive our ETF Trades, please click here to go to our subscribe page.

Thank You

If you want to contact me send me an e mail bill@stockbarometer.com

Important Disclosure
Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.
Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.
In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.
For a complete understanding of the risks associated with trading, see our Risk Disclosure.

© 2010 Copyright Bill West - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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