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Friday, June 25, 2010

Friday Investing and Trading Review for June 25 , 2010

"It's not the technical analysis. It's not finding out how to play a market that you want to trade. It's about finding a market that has a profitable edge or bias that can be 'massaged'." - Personal Mantra

Although I did state that I would stop doing as many public reviews of "Airelon's Market Tactics", I didn't say that I would stop doing them completely. I still want to have a public review of my investing and trading efforts from time to time ... so here we are!

I figure I would just let everyone read my thoughts straight out of "Airelon's Market Tactics", as they existed last week. So please remember that the market comments below were written last week, so these thoughts are not current. In addition, I am not including all of my economic thoughts or portfolio management decisions. I am simply including what my thoughts were last Sunday night, for both the investing route, and the trading route.

But I figured I'd just do what I'm known for ... putting it 'all out there' for everyone to see, and we can see how I did together. I'll include my present comments after various sections with bullet points ...


"Outlook for the Week of June 20th, 2010
Dividend Investment Outlook for the Next Week:

We've leaped past all of those longer period moving averages, as you can see from the one hour chart of the e-mini S&P 500 futures open of the first three hours. This also clears us past heavier resistance on the daily chart with consistent trading. The next thing to keep an eye out for will be trend reversals as we approach active trading on Monday morning. For my dividend 'sister' accounts, it means that I will continue to hold my hedge for my dividend bearing 'sister' accounts; which is an August SPY 96 Put. I'll sell this put back to the market if the option sinks to .65 in worth at the open tomorrow.

  • I'm still holding that hedge, as with Monday's pop higher we never sunk to .65 on that option. The last I looked, we had a mark of 1.47. But time (theta) is ticking away. At the moment, that put option has me at about break even. I'll have comments regarding this hedge in this Sunday evenings newsletter ...

"Trading Outlook for the Next Week:

Note: By way of reminder, since the Model Portfolio has only $16,077.17, there will only be 'day trades' at this stage of the game in order to escape the risk of over-leveraged gap opens. As the 'trading sister' model account grows, we will move into 'swing trading'.

Market #1
July Sugar #11 (SBN0): I knew that pullback was coming!

Seriously, we've pulled back to the section I was waiting for. .1530 to .1525. Now, I wait for congestion on the one hour chart, and the 10 minute chart to develop. Once we begin making higher highs on the smaller time frames after such congestion, I think we will have a seasonal push higher on our hands that I'll be looking to play on the long side.

  • This worked out beautifully. As I've been a bit busy this week I didn't get to trade and catch as much of this bias as I would have liked. But still two great profitable trades to be had, any way you cut it ...

Market #2
July Corn (CN0 or ZCN0): I haven't pulled back from looking to short this market. But I am definitely moving it to the 'back-burner' as it were.

With the open this evening just rocketing higher, I would not be surprised if we move up towards the 100 period exponential moving average (ema) around the 370.25 region on the September contract before congesting.

So ... this trade hasn't moved against me yet, where I'm willing to scratch it off completely. But I'm watching Sugar more heavily at the moment, than I am Corn. As I mentioned in the beginning, let's just say I've moved Corn to the 'back-burner' as it were, and now only stalking it.
  • Well ... this worked in a rather interesting manner. As my comments describe, I was concentrating on the Sugar market. But the short opportunity definitely came in Corn, and then some. I just happened to miss it. When we popped higher by Monday morning, I just stopped watching Corn altogether. And then Monday afternoon happened, and the Corn market proceeded to plummet all week. Profitable bias, I just didn't focus enough. I'm thinking I'm going to add some more monitors, because this isn't the first time this has happened.

Market #3
August Lean Hogs (HEQ0):
We've rallied up to key exponential moving averages that act as resistance on the daily chart.

And seasonally, August Lean Hogs sees a great deal of weakness in the last half of June. It doesn't matter if you look at the 5 year, the 15 year, or the 30 year seasonal averages, the result is the same. Down.

So I'll be looking to short August Lean Hogs.

What are my trading parameters? The ideal scenario is to have an open, and a 'range' that does not violate and move higher than 83.275. Then, with such congestion, if we break below 82.075, I'd be looking to be short this market.
  • We rallied on Monday and completely broke out of my trading parameters, so I just scratched the trade completely. It then proceeded to fall all week. Again, a situation where my bias was correct, but I personally couldn't find an entrance. I think a short opportunity was there, I just wasn't focused enough on the markets this week.

So it ends up that I had two profitable trades in Sugar. +0.9318% and +2.027% respectively. I'll also include the updated trading money management performance statistics for the newsletter, which are included in each weeks issue. The numbers are on a "per contract", as well as percentile basis ...

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.


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