Easter Monday, preview S&P TSX Global Gold Index

Seeing as I am doing these chart studies and including a bit of previous day activity in the assessment for trade setups I figured I should do one that is current. Tomorrow I am off work and the markets are open, I actually thought that they would be closed so this is a bonus for me.


S&P TSX Global Gold Index, April 9th.

No notations are necessary for this, just an overview of the day.

The drop off over the last half of the day will help to determine initial trading plans for tomorrow.

1) IF the price gaps or moves up quickly over the 200sma AND the market seems strong generally THEN look at fading the opening gap back to the daily primary pivot point OR wait for the 30 and 50 SMAs to catch up and re-evaluate the plan, best action could be to wait for the test of the 200 sma as it is likely valid earlier

2) IF the price opens even THEN wait for a test of 200 sma to play short OR fade to the 200 sma

3) IF the price gaps down THEN wait for some sort of confirmation of a continuation of the downtrend(30/50 zone acting as resistance) OR confirmation of a short term reversal (30/50 catches up and is crossed by the price.

Basically I am not certain what to expect yet, the price of gold is up since Thursday...I'll wait and see tomorrow morning. I would have liked to see the close been at the 200 sma or had the price cross late in the day which would setup a good start with the 200 pretty much caught up.

I guess there are no excuses tomorrow.

Jeff.

March 3rd, PM

Chart for Global Gold Index in the afternoon.



There was an extra $124 net in these trades. Not bad for a couple of hours trading. So today's total would be $343. Applying my various fudges, 30% reduction is $240, dropping my top two trades leaves $148. Either way the return is tax free so I would take them.

Jeff.

March 3rd, the AM, stuck on gold still.

Annotated chart for the Global Gold Index for the morning activity.

As usual red arrows indicate a short trade (Long HGD the bear fund)and the green are long trades (long on HGU the bull fund).

This is a far quicker method of noting these trades. It makes it easier to review them for me so they must be easier for someone else to read as well.

I am playing with a manual method of trailing stops so I am not actually trading these but using the stops to check how much of a particular move I may take. I was having trouble getting too far in the red on trades last week, even though they were small losses the small loss adds to the commission cost and drives down my profits. I determined that the stops are not great at profit protection (I knew this but it is a good reminder, they are called stop loss after all) so I will use them to keep me from taking a greater loss than I planned on and to also act as a safety in the case that I have a connection problem like I did last week.

My tracked trades today netted $219 prior to the noon hour. I was only able to use 300 shares per trade due to the price being around the $10 plus mark. The last trade was nice in that I used the stops and did not jump them too soon, I figured that since I was far enough into profits that I could let it sit until the next target was reached before moving it up...it worked to keep me in the trade past that little consolidation period.

Jeff.

February 20th...Gold tests $1000

I neglected to save yesterday's chart for the Global Gold index.

The price opened low, headed up and crossed the 200sma far earlier than I expected. This led me to wonder what was up as the price jiggled along this line for a while. I did place a trade expecting a move up but once I saw it not materialize I jumped out just moments before the price plummeted $4 in a few minutes. Had I not been long I would have gone short as soon as the price crossed and tested the 200. Sometimes it is hard to be nimble enough to reverse a trade as quick as these materialize. In hindsight I should have bailed earlier as I did hold the trade too long...although I also should have noted a resistance level in AEM that matched up with the peak in GD after my trade...I could have had a small profit and been ready for the reversal.

The rest of the day was a wash as I decided to play with my Forex trial account for a bit instead of trading.

Today, I checked the price of gold before the market open and saw that it looked like it was heading for 4 digit territory. I really did not think it would even touch the $1000 threshold today let alone cross it for a little while. That fact does not change the action expected for today's price in the Global Gold index. A drop off the start to bump the 200 then a return to the day open...the rest was unknown.

So there were 14 trades, marked by the red arrows, that I could have taken, not all great trades but no real losers in the mix. The first circled one was the one that I considered even though it was outside of my boundary, I figured it should be a good high entry as the price dropped off. I won't bother with any of the excuses for why I did not place any of these trades as I saw them set up. While the excuses are all good, they are still excuses. This is something I anticipate correcting for next week.

Trades 2 through 8 are textbook pivot point entries, although #6 was not technically a retest it might have been expected and traded. 5, 7, 8 and 9 are strong PP200 as they meet both trade criteria, testing a pivot point, the primary no less, and the 200 sma at the same time. The last one before 1130h was the kicker and in order to be sure to be in that large move all of the other trades would have to have been made as this move was not guaranteed, it could have happened in either direction at any one of those times earlier...odds favoured a move up though.

The last two were again PP200 trades... the last move on my chart is most of what was left as the price is now hovering around $339. That second last trade was not so great and the less probably one, but I never know for sure...all I could hope is that I realized it was not and got out soon enough to reverse the trade. It looked like a clean retest two minutes after the drop so I would be free an clear for it.

For my own personal gratification of knowing what I might have been able to pull off here I roughly figured the entry and exit trades.

Rise in Global Gold = buying HGU (Bull fund), drop in Global Gold = buying HGD (Bear Fund)

10 trades, I dropped two redundant ones...would have just still been in the previous one and two of the ones off the start that I would not have taken...these just cut the profit by a little bit anyway.

All up was $533 net tax free. So I apply my 30% fudge against me to bring it to $373.

Dropping my two top trades and applying my 30% fudge I still see $159. Still well above my daily goal right now.

All in all I am more than satisfied with the prospect of trading this particular plan and looking forward to the profits to come.

For anyone following along I expect to not be blogging this weekend at all. Other stuff on the go.

Jeff.

Overview

I liked today as an overall example of my PP200 plan almost to a "T".

I put a standard zigzag overlay on the chart and it was bounded by a pivot point or the 200 sma to mark entries, other than that little peak at about 1400h.

That little bounce back to test the 200sma once it crossed was classic, the return to the primary pivot point for another test and entry and the exit up around 1/2 R1 right near the end of the day. The zigzag does nothing except point out the pattern after the fact.


I won't bother calculating out the rest of the potential in this day but I will point out to myself that these trades were amongst the easiest to see, and the easiest to trade. I seem to like playing the tighter range bound trades for real and fight for every penny, go figure. I expect that if I had to rely on this trading as an income I would not be so lax in getting trades on the table.

I may do some trading this week yet but I think that my schedule will be a bit free next week to be able to really try this out.

Jeff.

February 18th the balance of the trader's lament

Other than this morning's shenanigans I have no real excuse for not making the trades that I will be outlining here. I called each one of them cold but failed to press the order button. I believe that I am suffering from a form of trading fear, which is odd as I have typically not had any trouble making trades...even in cases where I KNOW that I will expect a loss if not just a very high probability of one. I have blown through $100s of dollars in a day to test theories, order execution, my willingness to take a loss so I know that I can take a loss.

So I must suffer from a fear of PROFITS!

Go figure. I wonder if they have a phobia name for that kind of fear.

So, the morning chart, I will skip the HGU and HGD charts as they track well and make no real difference in the interpretation...other than the drop in price is a gain in price on the HGD, being the bear fund.
First blue circle: teh morning's shenanigans, I dropped a box here to represent an HGD trade that I would have entered but I will leave it off of any calculations. The next circle was my "not quite PP entry". Given the pattern here I was thinking about buying HGD at the peak to catch the drop that I figured was coming...that one was just a thought though as it didn't really follow my PP200 plan.

After the price fails to remain below the S1 line, I watched as it climbed back up, then tested the S1 at about 1020h...order was set, finger on the button...AEM was at a support point as well so it was a good confirmation...I just didn't order. My "non order" is the first green rectangle representing my entry at the bottom and my exit at the top. The second rectangle was exactly the same story...everything was a go including the good ol' finger on the trigger...

The 200sma as resistance (green sma line) was a perfect setup, as perfect and predictable as they come. AEM was also hitting it's respective 200sma, both HGU and HGD were doing the same...although they are usually close to in line with the index.... then the small bounce off the dashed S1+1/2. Even since there are two more medium sized trades that setup but I have just closed down my trading platform for the day.

The "trades":

Buy $14.50 Sell $14.90 Gain 40 cents ps Return 2.7%
Buy $14.93 Sell $15.17 Gain 24 cents ps Return 21.6%
Buy $7.56 Sell $7.70 Gain 14 cents ps Return 1.8%
Buy $14.96 Sell $15.00 Gain 4 cents ps Return 0.2%

$144 net gain overall or 3.6% overall return on $4000 portfolio.

Had I taken the first two trades, even given the odd moves, another 42 cents per share...or another $144 net was on the table. I might have stopped trading after those two alone, or at least after the listed trades.

Now I just have to work on my order entry, perhaps glue a 1/4 inch extension on my order button finger so when I hover and think "order" I will hit the button by mistake.

Jeff.

February 18th, the opening head game

Well,

The opening was very interesting. The index is doing what I suggested it would but I got shaken out before getting into any trades. I intended to get in on the initial roller coaster ride but didn't expect two things:

1) it happened very fast off the start
2) HGU and HGD BOTH went down at the same time

In theory the two funds are the inverse of each other proportionally based on percentage changes, with some margin allowed for trading spreads. So, if HGU goes down then it stands to reason that HGD should go up.

BUT THAT DID NOT HAPPEN! In the first two minutes Global Gold (GD) dropped about $1, HGU dropped close to 10 cents (which is about right) and HGD also dropped about 5 cents...HUH? It should have gone up by about that amount.

I seriously considered a quick momentum reversal play in minute two as I figured that there must have been a glitch in HGD and it will quickly head back up...but that is a very early entry and prone to problems with a market order....with a regular stock that is. ETFs seem to work differently when it comes to higher volume activity. My hesitation was my downfall on this move.

So everything settled out in minute three and was back on track...except that I was not on board. Minute three moved too far too fast for me to feel comfortable getting in but I should have gone with my estimation of the movement that I made yesterday and just bit the bullet and ordered.

Alas, HGD has moved 40 cents from open and 50 cents from where I would have tried to get in had I not hesitated.

So now I just wait for things to settle out and see where the rest of the day leads me.

Jeff.

February 17th...the fake returns for a day...

Today, the day after the North American holiday, President's Day, and Family Day up here would not have been agood day for me to typically be in the market, so I hung back.

The Global Gold index (GD) started high as the price of gold jumped yesterday...and it only stands to reason that gold related stocks, and therefore indices, would rise accordingly. As it was GD started near the top of my pivot points, which puts me out of my "zone". So I decided to do some technical fake trading to see what I could stirup, and to keep me on my toes.

I'll post the GD chart here with a different annotation than normal. The red boxes are the HGD trades start and stop times and prices and the green are for HGU. The circles are my break even or losers, and they will bee noted as well.

Given the start of the day I figured that it was going to be a flatish morning with a decent gap fade in the afternoon as soon as the 200sma caught up again. I didn't get the gap fade but did see a return to below the opening price, so a little fade. Perhaps the rest will happen tomorrow. I would just buy a full load of HGD at the top but I don't trust picking a top outside of the pivot point ranges. I ended up having a go at a couple of points and alternated buying HGU and HGD figuring that I might get lucky and catch a top...no such luck. The nice double hump could have given me a technical entry between 1250h and 1315h but I was not watching at that time...I probably would not have taken it anyway as my morning trading did not produce any great numbers to use as a buffer.

Once the price crossed the 200sma (green line) I jumped in (yah, I should have jumped in for real here as this is a close to a sure thing as I can think of in trading) right where the price popped back up for a quick test. The only reason I would let this trade go so long is that I am gaining confidence in my afternoon calls and the HGD profit went negative on me. I thought about it at the solid red R3, and again at R2+1/2 but bailed before that line was crossed. I got back in as the line was recrossed for a last trade to top things off for the day.

A note about technical trading...even though pivot points are such they are not determined on the fly so I consider them a bit different. The red and blue lines are the 30sma and 50 sma respectively. Often they indicate a trending period and they did just that in textbook style today. Right up to 1230h the price stayed mostly above the 30sma which stayed above the 50sma. in the afternoon the reverse occurred for some nice downtrending action.

Here are the trades, all the HGD trades are in the $7 range and the HGU are in the $15 range.

1023h Buy $7.43 Sell $7.48 Gain 5 cents ps Return 0.7%
1028h Buy $7.43 Sell $7.43 Gain 0 cents ps Return 0%
1055h Buy $7.30 Sell $7.34 Gain 4 cents ps Return 0.5%
1124h Buy $7.31 Sell $7.29 Gain -2 cents ps Return -0.3%
1127h Buy $15.73 Sell $15.83 Gain 10 cents ps Return 0.6%
1138h Buy $7.24 Sell $7.27 Gain 3 cents ps Return 0.4%
1156h Buy $7.19 Sell $7.22 Gain 3 cents ps Return 0.4%
1202h Buy $15.86 Sell $15.98 Gain 12 cents ps Return 0.8%
1334h Buy $7.24 Sell $7.42 Gain 18 cents ps Return 2.4%
1501h Buy $7.42 Sell $7.50 Gain 8 cents ps Return 1%

For any prices under $7.30 I bought 500 shares, higher than that would be 400 shares then HGU in the $15 range is at 200 shares...just due to the limitation of capital in the account.

The final tally was $116 net, 2.9% return based on a $4000 capital base...commissions in the morning killed me due to the small moves but I decided that I need to be in more trades in order to be there when the price does move more substantially. At noon I was only ahead $10 net. At least it would be tax free.

So tomorrow I am looking forward to a better day trading as I hopefully can just do some real trades. I do expect a possible drop in prices over the course of the day and even a jump after the 200sma crossing, a bit of a reverse of today. We'll see though...the proof will be in the pudding.

Jeff.