Archives of “moving average” tagrss
Total rig counts up to 254 from 244 last week
In a surprise, the Baker Hughes rig counts moved higher this week.
- Total rigs moved to 254 from 244 last week. This is the 1st increase in 24 weeks.
- Oil rigs rose by 11 to 183 from 172 last week. This is the largest weekly gain since January
- Gas rigs fell by 1 on the week to 69 from 70 last week
Private data last night showed a bigger than expected drawdown of crude inventories
The Department of Energy will release their weekly inventory data.
- crude oil -8.587M vs -3.35M est.
- gasoline -1.748M vs -1.3M estimate
- distillates +3.824M vs +100K est
- Cushing +1.63M
Gold and so are off low levels
the US 5 yield has fallen below the 0.20% level to a low yield of 0.1949%. That is a new all time low. The high yield today reached 0.2232%.
Italy and Portugal indices move higher
the major European indices are ending the session with mixed results. Germany, France, UK and Spain show declines while Italy and Portugal eked out gains. The closes are showing:
- German DAX, -0.43%
- France’s CAC, -0.42%
- UK’s FTSE 100, -0.62%
- Spain’s Ibex, -0.2%
- Italy’s FTSE MIB, +0.3%
- Portugal’s PSI 20, +0.95%
- spot gold $-4.25 or -0.23% $1806.05. The high for the day reached $1813.48. The low extended to $1802.97
- WTI crude oil futures fell $0.19 or -0.46% to $41.01. It’s high price reached $41.18 while the low extended to $40.60. The September contract is currently down $0.21 or -0.51% of $41.19
- GBPUSD. The GBPUSD is trading at new session highs in the currently hourly bar. In the process, the price has moved back above its 200 and 100 hour moving average. That tilted the bias back to the upside in what has been an up and down market over the last 7 or so trading days. On the topside a trendline connecting highs from this we currently comes in at 1.2634. The high from yesterday reached 1.26487. The high for the week on Monday reached 1.26652.
- EURUSD: The EURUSD moved higher in the London session after finding support buyers near the 38.2% retracement of the move up from the Friday low at 1.13759. The high price reached 1.1441. The high price from yesterday reached 1.14512. There is close support at 1.14223 area
- Forget the news, remember the chart. You’re not smart enough to know how news will affect price. The chart already knows the news is coming.
- Buy the first pullback from a new high. Sell the first pullback from a new low. There’s always a crowd that missed the first boat.
- Buy at support, sell at resistance. Everyone sees the same thing and they’re all just waiting to jump in the pool.
- Short rallies not selloffs. When markets drop, shorts finally turn a profit and get ready to cover.
- Don’t buy up into a major moving average or sell down into one. See #3.
- Don’t chase momentum if you can’t find the exit. Assume the market will reverse the minute you get in. If it’s a long way to the door, you’re in big trouble.
- Exhaustion gaps get filled. Breakaway and continuation gaps don’t. The old traders’ wisdom is a lie. Trade in the direction of gap support whenever you can.
- Trends test the point of last support/resistance. Enter here even if it hurts.
- Trade with the TICK not against it. Don’t be a hero. Go with the money flow.
- If you have to look, it isn’t there. Forget your college degree and trust your instincts.
- Sell the second high, buy the second low. After sharp pullbacks, the first test of any high or low always runs into resistance. Look for the break on the third or fourth try.
- The trend is your friend in the last hour. As volume cranks up at 3:00pm don’t expect anyone to change the channel.
- Avoid the open. They see YOU coming sucker
- 1-2-3-Drop-Up. Look for downtrends to reverse after a top, two lower highs and a double bottom.
- Bulls live above the 200 day, bears live below. Sellers eat up rallies below this key moving average line and buyers to come to the rescue above it.
- Price has memory. What did price do the last time it hit a certain level? Chances are it will do it again.
- Big volume kills moves. Climax blow-offs take both buyers and sellers out of the market and lead to sideways action.
- Trends never turn on a dime. Reversals build slowly. The first sharp dip always finds buyers and the first sharp rise always finds sellers.
- Bottoms take longer to form than tops. Fear acts more quickly than greed and causes stocks to drop from their own weight.
- Beat the crowd in and out the door. You have to take their money before they take yours, period.
The title of this book by Rick Swope and W. Shawn Howell is somewhat misleading. It’s not intuitively obvious, or at least it wasn’t to me, that Trading by Numbers: Scoring Strategies for Every Market (Wiley, 2012) is primarily about options.
But let’s start, as the authors do, with their trend and volatility scoring methods. The trend score has four components: market sentiment (the relationship between a long-term moving average and a short-term moving average and the position of price in relation to each moving average), stock sentiment (the same parameters as market sentiment), single candle structure (body length relative to closing price), and volume (OBV trend). The range is -10 to +10. Volatility scoring has three legs: historical market volatility, historical stock volatility, and expected market volatility. The range is 0 to +10.
Before moving on to the standard option strategies, the authors address risk management, which they wisely describe as nonnegotiable. Risk management again has three legs: risk/reward, concentration check, and position sizing.
And, with chapter five (of sixteen), we’ve reached covered calls. The reader who has no experience with options will be lost. Even though the authors push all the right buttons (ITM, ATM, OTM strategies; the Greeks; position adjustments), they push the buttons almost as if they were playing a video game. Very fast.
Assuming that the reader is not new to the option market, what can he/she learn from this book? Let’s look very briefly at three strategies and see how they reflect three different market or individual stock conditions: a long call, a straddle/strangle, and an iron condor. Traditionally described, in the simplest of terms, the first is looking for a significant bullish directional move, the second anticipates a surge in volatility, and the third expects a rangebound market. (more…)
1. Forget the news, remember the chart. You’re not smart enough to know how news will affect price. The chart already knows the news is coming.
2. Buy the first pullback from a new high. Sell the first pullback from a new low. There’s always a crowd that missed the first boat.
4. Short rallies not selloffs. When markets drop, shorts finally turn a profit and get ready to cover.
5. Don’t buy up into a major moving average or sell down into one. See #3.
6. Don’t chase momentum if you can’t find the exit. Assume the market will reverse the minute you get in. If it’s a long way to the door, you’re in big trouble.
7. Exhaustion gaps get filled. Breakaway and continuation gaps don’t. The old trader’s wisdom is a lie. Trade in the direction of gap support whenever you can. (more…)
“Old Rules…but Very Good Rules”
- The first and most important rule is – in bull markets, one is supposed to be long. This may sound obvious, but how many of us have sold the first rally in every bull market, saying that the market has moved too far, too fast. I have before, and I suspect I’ll do it again at some point in the future. Thus, we’ve not enjoyed the profits that should have accrued to us for our initial bullish outlook, but have actually lost money while being short. In a bull market, one can only be long or on the sidelines. Remember, not having a position is a position.
- Buy that which is showing strength – sell that which is showing weakness. The public continues to buy when prices have fallen. The professional buys because prices have rallied. This difference may not sound logical, but buying strength works. The rule of survival is not to “buy low, sell high”, but to “buy higher and sell higher”. Furthermore, when comparing various stocks within a group, buy only the strongest and sell the weakest.
- When putting on a trade, enter it as if it has the potential to be the biggest trade of the year. Don’t enter a trade until it has been well thought out, a campaign has been devised for adding to the trade, and contingency plans set for exiting the trade.
- On minor corrections against the major trend, add to trades. In bull markets, add to the trade on minor corrections back into support levels. In bear markets, add on corrections into resistance. Use the 33-50% corrections level of the previous movement or the proper moving average as a first point in which to add.
- Be patient. If a trade is missed, wait for a correction to occur before putting the trade on.
- Be patient. Once a trade is put on, allow it time to develop and give it time to create the profits you expected.
- Be patient. The old adage that “you never go broke taking a profit” is maybe the most worthless piece of advice ever given. Taking small profits is the surest way to ultimate loss I can think of, for small profits are never allowed to develop into enormous profits. The real money in trading is made from the one, two or three large trades that develop each year. You must develop the ability to patiently stay with winning trades to allow them to develop into that sort of trade.
- Be patient. Once a trade is put on, give it time to work; give it time to insulate itself from random noise; give it time for others to see the merit of what you saw earlier than they.
- Be impatient. As always, small loses and quick losses are the best losses. It is not the loss of money that is important. Rather, it is the mental capital that is used up when you sit with a losing trade that is important.
- Never, ever under any condition, add to a losing trade, or “average” into a position. If you are buying, then each new buy price must be higher than the previous buy price. If you are selling, then each new selling price must be lower. This rule is to be adhered to without question.
- Do more of what is working for you, and less of what’s not. Each day, look at the various positions you are holding, and try to add to the trade that has the most profit while subtracting from that trade that is either unprofitable or is showing the smallest profit. This is the basis of the old adage, “let your profits run.”
- Don’t trade until the technicals and the fundamentals both agree. This rule makes pure technicians cringe. I don’t care! I will not trade until I am sure that the simple technical rules I follow, and my fundamental analysis, are running in tandem. Then I can act with authority, and with certainty, and patiently sit tight.
- When sharp losses in equity are experienced, take time off. Close all trades and stop trading for several days. The mind can play games with itself following sharp, quick losses. The urge “to get the money back” is extreme, and should not be given in to.
- When trading well, trade somewhat larger. We all experience those incredible periods of time when all of our trades are profitable. When that happens, trade aggressively and trade larger. We must make our proverbial “hay” when the sun does shine.
- When adding to a trade, add only 1/4 to 1/2 as much as currently held. That is, if you are holding 400 shares of a stock, at the next point at which to add, add no more than 100 or 200 shares. That moves the average price of your holdings less than half of the distance moved, thus allowing you to sit through 50% corrections without touching your average price.
- Think like a guerrilla warrior. We wish to fight on the side of the market that is winning, not wasting our time and capital on futile efforts to gain fame by buying the lows or selling the highs of some market movement. Our duty is to earn profits by fighting alongside the winning forces. If neither side is winning, then we don’t need to fight at all.
- Markets form their tops in violence; markets form their lows in quiet conditions.
- The final 10% of the time of a bull run will usually encompass 50% or more of the price movement. Thus, the first 50% of the price movement will take 90% of the time and will require the most backing and filling and will be far more difficult to trade than the last 50%.
There is no “genius” in these rules. They are common sense and nothing else, but as Voltaire said, “Common sense is uncommon.” Trading is a common-sense business. When we trade contrary to common sense, we will lose. Perhaps not always, but enormously and eventually. Trade simply. Avoid complex methodologies concerning obscure technical systems and trade according to the major trends only.
- Price: between 10 and 100
- Average Daily Volume: 500000 plus
- Beta: greater than 2
- Bullish Strongly trending
- Bullish Weakly Trending
- Bearish Strongly Trending
- Bearish Weakly Trending
- Range Bound
- The pullback
- The coiled spring
- The bullish divergence
- The blue sky breakout
- The bullish base breakout
- The relief rally
- The bearish divergence
- The gap down
- The blue sky breakdown
- The rising wedge breakdown