SLV

Sold the last of the silver (SLV) position this am on a market order that was filled at 14.06.  Purchase price back on 1/21 was 11.16.  Tight stops currently on GLD.  The M48 may buy the metals again soon.  Building a fence so to speak around the S&P short position SDS.  Purchase price was 81.54 on 2/12.  Stop is around 90 and will take profit in the 100 range if it makes it.  Current price as of this post is 94.42.

That’s it for now.  I expect we will get a bounce soon.

FREE WORKSHOP SOON!

The next Pro Investor Coach workshop will be held on Saturday March 21rst at 9 am in our Solana Beach offices located at 444 S. Cedros Ave # 250.  The workshop is free – however seating is very limited.  One hour in length and no selling.  The secret to thrive in a volatile market is proper education.

If you would like to attend please leave your name and number at (888)-808-4472 or email us at info@proinvestorcoach.com

Trailing Stops

Moving stops up to the profit zone on DUG (short oil) and SDS (short S&P).  I see gaps that based on probabilities will be filled on GLD (gold) and SLV (silver) to the downside.  My decision is based off a 60 minute chart vs. a daily.   Therefore I am tightening the stops on the metals inside the M48 model.  Nice profits even if the stops get hit – especially in silver.

I believe we will get a bounce next week in the S&P.  This is not a buy recommendation but instead an observation based on a weekly chart to tighten up on the short inside the M48. 

Enjoy your weekend!

Sleep

So far so good.  The metals GLD and SLV are still trending higher.  I expect gold will pull in a little to fill a gap possibly before testing the old highs of 1000+.  If they hold the trend line I will add.  The chart pattern will make the decision.

Short oil using DUG w/ a nice move yesterday.  I would like to see it test 30 again to the upside at which time the model would take profit on part of the position.  A decent stop would be 24.50 +.  Close today 27.81. 

Eventually  the M48 model will get long the S&P.   That could be next week, next month or next year.  Pattern recognition along w/ price and volume will let us know when.  For now we’ll let the short position in the S&P (SDS) run looking to sell some in the 90 range provided it hits that number prior to the stop near 80.  Close today 87.

Radio Show:  If you listened to the show Monday I said I would be short financials using SKF rather then long using XLF.  The next day SKF (short financials) moved up 10%.  I’m telling you this so you see that cheap stocks (financials) can and most often get cheaper.  Never try to catch a falling knife.  The trend is your friend.

Parked in cash for most of the past 14 months has allowed the M48 subscribers to sleep more soundly.  Moving stops up to lock it profit puts the smile on your face.

Shorty

800 seems to be a target on the SPX (S&P cash) that wants to be tested.  Will it hold?  Possibly for now but eventually I think not.  Remember we are always following the trend and not trying to predict but rather deal in probabilities based on pattern recognition using price and volume.  In other words the M48 model will ride the wave with stops.  So the play is to put on a short position inside the M48 using the ETF,  SDS (ultra short S&P).  As of this morning the model has an equal dollar amount of S&P shorts as it does S&P longs w/ stops on both sides.  A strangle if you will.  If we break out we exit the shorts and add to the long position.  If we break down the model will exit the remaining long position and add to the short.  Here is what I think will happen.  I believe (based on probabilities) we will bounce here only to see the shorts load up and eventually take the market lower.  How much lower and when would be a guess.

I see this same type of scenario in crude.  Out of DIG (long oil) w/ a profit and watching DUG (short oil).

I would like to see TBT (short bonds) hold yesterdays low of 44.70

A beautiful chart pattern still exists on SLV (silver) with higher highs and higher lows.

This is for educational purposes only and should not be considered as investment advice.

Good News –moving to larger offices this weekend in Solana Beach on S. Cedros.  I’ll be holding free workshops two Saturdays per month.  Seating will be limited.  The workshops are for educational purposes only (no selling) and will run approximately 65 minutes in length.  The three main topics that will be covered:

1) Safe Money (market linked gains w/out the risk)  2)  Direct market participation using ETF’s (exchange traded funds) while controlling risk and capturing profit w/ stop losses.  3)  Collecting option premium on futures w/ extreme risk control.  Stay tuned for details in future posts.

Selling w/ Serious Volume

The model will add to its long S&P position w/ increased price and volume above 850.  Today however we had increased volume with the market selling off and a close of 827.  So no adding has taken place.  If you look at the last post on Friday the 6th I said in the first paragraph the model will not add if the market gives us continuous selling with increased volume, ala distribution.  The S&P position represents still 29% of the M48 model portfolio as stated in the 1/29 post.  Cash continues to be King.

GLD (gold) and SLV (silver) are holding up.  I’m going to sell more SLV on a limit order above 13 but below 14 provided we get there.  Today’s close was 12.98.  I had a limit order in on the accounts to dump some at 13.07 but we missed it by one tick.  Either way we have a built in profit on the metals due to our stops above our initial entry.  I see the metals, especially SLV as very tradable due to the nice upward trend.

The model as of today is no longer in DIG (long oil).  You can see that we dumped some DIG last week at just over 30 and moved our stop up on the balance to 28.73.  Today DIG closed at 27.54 and therefore the model was stopped out on the balance for a profit.  The model may get short oil (DUG) soon or possibly long again by jumping back into DIG.  The charts will let us know.  Bonds caught a bid today w/ the equities selling off.  No problem because we have plenty of profit built into TBT (short bonds) in the event we are stopped out or decide to sell some ahead of being stopped out similar to DIG.

I can here the train outside my office (Del Mar).  A reminder not to get in the way of selling w/ increased volume or you’ll get run over.  Wait for a bottom to form wherever and whenever that may be.

I’m watching the SDS which is the ultra short ETF for the S&P.  Watching, not buying. 

Close Above 850 w/ Decent Two Day Volume

In the January 29th post I said that the M48 model would add to its S&P positions w/ a close above 850.  I also said I’ll dump the S&P positions on a close below 800.  So today we closed at 868+.  Volume was greater  yesterday (an up day) but today’s volume was also higher than Wednesday’s which was a down day.  This means I’ll be increasing the S&P percentage inside the model over the next several days provided continuous selling w/ high volume does not occur.  My stop on the SPY will be in the 81 range based on support that I see on a weekly chart.  The SPY (S&P exchange traded fund) closed today at 86.97.  This means our stop will be w/in the 7% range in the event we are wrong. 

Keep in mind that we are obviously still in a bear market.  We could rally 40% from here only to turn around weeks our months from now to head down 60%.  If this is the beginning of some type of trend – we’ll ride it.  If it’s another head fake – we will exit to preserve cash.

DIG (crude ETF) hit 30 today so we took profit on a percentage of the position as stated in yesterdays post.  The metals are holding up, especially SLV.  TBT (short bond ETF) continues to trend higher too.  

Always hope for the best but make sure you have a plan for the worst. 

Stops in place – forget the noise on TV – have a nice weekend!

This is for educational purposes only and should not be considered investment advice.  Exact entry, stops and exit points are available to subscribers.

Moving Stops

Moving trailing stops up on DIG to lock in profit on 66% of the position.  If it makes it to up to 30 I’ll dump some for a 10% profit and let the balance run w/ a trailing stop.  FYI -this method is used in each position in the M48 model.

800

Pretty much the same since the last post.  Need to hold 800 on a close in the S&P to maintain the models long position.  The market contiues to be under pressure based on what I see technically (price and volume).  You guys know that price and volume is all the matters.  Forget the other noise.

I did move the trailing stops up on SLV and TBT to lock in more profit.  I’d like to see DIG take a run at 30 this week.  Close today was 27.22.  In order to do that I also believe it needs to hold yesterdays low of 25.84. GILD did hold its 50 day (support) and a looks like it wants to challenge new highs. This is not a recommendation but instead an observation for educational purposes.

During a recent interview I was asked to distinguish myself from other advisers in one sentence.  My response was: “If I’m wrong I don’t stay wrong”  – please expand – “That means I don’t let my ego get in the way.  When I’m wrong it’s OK because I know I’m only going to be wrong by a small percentage.  In other words I don’t buy and hold and tell my clients that they’re in for the long haul.  Instead we preserve capital by cutting our losses short and letting our profits flow.”

Choppy

Bought some SSO today when the S&P was off 20 vs. 28.  The only good news if any was that the volume was lighter today.  The S&P positions consist of 29% of the M48 model as of the close today.  The metals, oil and short bonds make up 14% with the balance in cash at 57%.  I don’t want to buy on weakness beyond today.  800 on the S&P is a key level to hold on the downside and 850 is what we want to see hold in order to add.   Add above 850 (w/ increased volume) and dump it on a close below 800.

Here is what it takes to be successful in these markets and to sleep soundly at the same time:

When the market (S&P) trades in a range (roughly 800 to 900) like it has for 12+ weeks it can be very frustrating because you are constantly getting bounced around with small losses and small gains.  However, it is very important to take every breakout because you never know if that particular breakout is the start of a new trend.  In other words if you snooze you lose.  If the trend (rising prices) continues the model then increases its exposure long as the institutions pile in (volume).  THIS PRICE AND VOLUME INCREASE ALONG W/ PATTERN RECOGNITION IS OUR EDGE (INCREASED PROBAILITIES).  Remember that the model is not looking to catch the top or the bottom, but instead all the fat in between.

Now on the flip side it is actually more important to exit the market if support is broken.  In other words you have to preserve capital in order to have cash to jump in and take the next trend whenever that occurs.  If you buy & hold you have unlimited risk and more importantly you do not have the cash to buy back in.  This is a very simple common sense method that the majority of advisors ignore due to lack of knowledge and more importantly discipline. It is more profitable for them to collect your money and have you sit in the market (mutual funds) and ride her down while they continue to collect fees. 

Once a trend is achieved all the little losses are soon wiped out at which time the model moves stops up to protect profit – hence recent moves in GLD (gold), SLV (silver), DIG (long oil), and TBT (short bonds).

As always cut your losses short (preserve capital) and let your profits flow (trailing stops).

This is why my clients/subscribers slept soundly in 2008.

All numbers referenced are for educational purposes only.  Always read the risk disclosure above.

-Have a nice weekend.

Adding SPY & SSO w/ Volume

The M48 model still remains in 80% cash as of the close today.  Proceeds from GILD and RTN were used to purchase SSO and SPY as mentioned live on the Pro Investor Show Monday.  I’m going to split my stops on the SSO because I see a gap that could get filled below 23.75.   Due to the chart pattern I’m able to safely place my stop on the SPY tighter than 7% from original entry.  Based on probabilities I think the market will eventually break 800 and go to new lows.  Until then the model will increase its long positions in the SSO and SPY provided price and volume hold up.  In other words we’ll add and ride her ’til she bucks.  Fill price and stops are emailed to subscribers.

Still long TBT, GLD, SLV and DIG w/ stops in place to protect profit.  Interesting how crude sold off yesterday but DIG held up.  Let’s see how the market reacts to QCOM and SBUX Thursday.

Thanks to those who attended our recent seminars on no risk and controlled risk.

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