WHOOOAAAA! SPX and my conversion

I have decided to watch the S&P 500 index (SPX) today and see what is going on South of the border as it relates to the market in general.

I have watched many video clips, read a huge number of studies and blogs on the SPX and always lamented the fact that I was not trading that index so all this plethora of information was not really very relevant.

But I kept reading and watching anyway as there were always a few gems in how these various people carried out their analysis, I was still learning something...and who knew, maybe I would end up trading that market anyway.

I am glad that I have kept up. I expect that all of what I have learned while playing in the TSX will be applicable in the NYSE and AMEX.

Back to the chart watching for a bit. In Global Gold I was trading in a relative vacuum. I had the index, of course, the bull and bear ETFs and two stocks in the index as well as my regular charting indicators. I used the TSX Tick accumulation but it was not reliable in any sense.

Today I watched the SPX for a short bit. The Cumulative tick was a very relevant indicator and my normal charting stuff still stands. There are a nice selection of ETFs in the 1:1 and leveraged arena. There are some great daily commentaries from some respected traders and one nice twitter feed that I have been following that gives nice overall information (no trade signals, I wouldn't use them even if they did do that)

I called one trade and watched it as it moved my way after crossing the 200sma, bounced cleanly off of the pivot point and returned to bounce again off of the 200sma. Using bull and bear ETFs that would translate into 40 cps and 20 cps moves (the 20cent move is in an ETF that is 1/3 the value of the ETF with the larger move...at least double the position size so the result would be the same). I think that technical indicators may have a larger effect on trading due to the much larger volume.

Keep in mind that these moves were small, 0.6% and 0.8% respectively based on the prices but this is a slow range trading day so far. Yesterday, using only my 200sma entries there were three trades all day. 35cps, 12cps and 71cps. I figured 10 cent stops to start and using only the 50 sma for moving stops once in. I will need to do some backtesting on this then work out other scenarios but it looks promising.

Downside, larger spreads, larger ETF valuation which means larger capital allocation and possibly larger allowable loss figures. I may go looking for smaller valued issues but I don't think I will find them. 10 cent stops or even 20 cent stops are within my loss allowance given the price of the issues so I am OK with that.

Well, that's all for now. Back later with some charts I expect.

If anyone is following along I hope my shift from Global Gold and the TSX altogether isn't disconcerting. I am trading in an RRSP right now so all tax implications are deferred, and I plan on switching over to the TFSA later, once I get settled, comfortable and gain some level of consistancy in these new markets.

For reference:

Index: SPX
Bull ETFs: RSU, SSO, SPY
Bear ETFs: RSW, SDS, SH

Jeff.

Stop loss, VTSO and the US market.

Well, I did some playing today in the NYSE after some morning trading in the TSX.

Stop Loss Orders.

I can place the much desired stop loss order with a market execution...I have a position right now in DZZ which Deutsche Bank Gold Double Short ETN...as close to equivalent to HGD as I found easily. I have a stop loss placed so I can walk away and feel reasonably comfortable leaving it. I was not really analyzing this one for a good entry, just a decent entry to try out the stops with a 50/50 chance of being right. Limit order to get in, stop loss to hold my losses to $10. The rising 200sma is above my stop so if the price drops past that point I want out anyway.

Virtual Trailing Stop Orders (VTSO)

Seeing as the stop loss issue was a TSX restriction I figured I would also try this out as a VTSO is basically a trailing stop loss executed as a market order once triggered...and market orders are not allowed so....

VTSO works just fine. I have not had one executed yet but I am pretty much going to plan on switching over completely to NYSE issues now. I only have to deal with the dollar conversion for my trading allowance. At least I know that I can hold USD in all of my accounts.

I need to do some research to select the proper stocks and ETFs...and ETNs I guess.

The easy ones would be AEM.TO, YRI.TO and ABX.TO as they have US equivalents, AEM, AUY and ABX respectively. Major banks are all traded on both as well so financial issues are fine as well.

More on this later I am sure.