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Found 6 results

  1. High leveraged trades in Futures & Options can be tricky. Stop losses can be used for risk management but a few stop loss triggers can take away a substantial part of your capital. What is important is the entries are timed precisely and once an entry is made, ride on the position till exit. Equally important is the stock selection which can give the best trending position. Using Triple Trend Oscillator one can analyze the long term trend and take position in a shorter time frame with a precision entry using a minor trend, all this information available on the same indicator. An advanced option trader has highly sophisticated tools to trade in options where each of the factors affecting option pricing is analyzed. However, for a trader it boils down to managing the intrinsic and time value of an option. Hence it is important for an option trader to know the trend force and direction before trading in options. A strong trending move can negate the effect of theta (time value erosion), keeping the option trader in profit, even when close to expiry. Trading naked options, if timed correctly, can become a relatively risk free, simple and high profit strategy . An option trader using the Triple Trend Oscillator will be in a position to judge the tend quality. The position of trend oscillators close to zero indicates sideways moves which can kill an option trader. The best trend structures would be when the trends are placed away from the zero line indicating strong trending move in either direction. Again the position of the intermediate and minor trend would indicate the trend strength and the trigger line could be used to take position in the direction of the major trend. Notice in the following chart, how the thin black line zero crossover can be used to make precise entry in the direction of a larger trend. Even if you miss the first entry or are not confident, one can always use the second crossover for a good directional trade.
  2. Hello, This is where you will find our posts for the 3 major commodity pairs, gold, silver and oil. Keep checking for our free signals here. Regards TradeCuts
  3. As you may recall from my August 18 blog post (How To Profit From Oil And Silver ETFs In This Stock Market Downturn), I have been bullish on both Oil and Silver ETFs (and, to a lesser degree, Gold) for the past week. Today, my patience is paying off because crude oil ($USO is the main ETF) has convincingly broken out above key resistance of an 8-week base of consolidation. Take a look: When the main stock market indexes are down sharply (as they are so far today), the benefits of ETF trading really become clear. Unlike stocks, most of which are correlated to the direction of the broad market, ETFs enables traders and investors to still profit in a down market because many types of ETFs have low to zero correlation to the overall stock market direction. Commodity ETFs such as $USO and $AGQ are two great examples of the above. Our current position in $USO is now showing an unrealized price gain of 7.7% since the swing trade buy entry in our nightly newsletter. Also, the position in our leveraged Silver ETF ($AGQ) is now up more 10% since our August 21 buy entry. If you have not yet added $USO to your portfolio, a secondary buy entry point into $USO would be a slight pullback to new support of the breakout level (consider a buy limit order around the $38.50 to $38.75 area).
  4. One of the main reasons we trade both individual stocks and ETFs in this swing trading newsletter is that trading the right combination of the two equity types increases our odds of being able to outperform the stock market at any given time, regardless of the dominant market trend. In strongly uptrending markets, we primarily focus on buying leading individual stocks (mostly small to mid-cap) because they have the greatest chance of outperforming the gains of the main stock market indexes. However, when the overall broad market begins to weaken, or enters into an extended period of range-bound trading, we reduce our exposure in leading stocks when they begin failing their breakouts and running out of momentum. Thereafter, we have several choices: 1.) Sit primarily in cash 2.) Begin initiating short positions in the weakest stocks 3.) Seek to trade ETFs with a low correlation to the direction of the overall stock market. Most the time, we do a combination of these three things in weak or weakening markets, the proportion of which is dependent on overall market conditions. Since our rule-based market timing model shifted from “buy” to “neutral” mode last week, we have immediately begun easing up on long exposure of individual stocks. With the NASDAQ Composite just below near-term support of its 20-day exponential moving average, and the S&P 500 right at key, intermediate-term support of its 50-day moving average, it is fair to say the broad market has NOT yet entered into a new downtrend. As such, we are not yet aggressively looking to enter new short positions at this time. However, when our timing model is in “neutral” mode, one thing we find works very well is trading ETFs with a low correlation to the direction of the overall stock market (commodity, currency, fixed-income, and possibly international ETFs). One such example of profiting from an ETF with low correlation to the stock market has been the recent performance of the US Oil Fund ($USO). Even though both the S&P 500 and Dow Jones Industrial Average fell more than 2% last week, $USO actually gained more than 2% during the same period. Because $USO is a commodity ETF that tracks the price of crude oil, the ETF has a very low correlation to the direction of the overall stock market. As banks, hedge funds, mutual funds, and other institutions were rotating funds out of equities last week, it is quite apparent these funds were rotating into select commodity ETFs such as $USO: As you can see on the weekly chart of $USO above, the ETF is now poised to breakout to a fresh 52-week high (from a five-week base of consolidation). If it does, bullish momentum should carry the price substantially higher in the near to intermediate-term. We are already long $USO from our buy entry last month, and the ETF is presently showing an unrealized share price gain of 6.5% since our original entry. However, if you missed our initial buy entry because you are not a newsletter subscriber, you may still consider starting a new position in $USO if it breaks out above the range (existing subscribers should note our exact buy trigger, stop, and target prices for adding shares of $USO in the “watchlist” section of today’s report). Two other commodity ETFs that definitely saw the inflow of institutional funds last week were SPDR Gold Trust ($GLD) and iShares Silver Trust ($SLV), which track the prices of spot gold and silver respectively. Of these two precious metals, silver is showing the greater relative strength. Check out the weekly chart of $SLV below: Notice that $SLV has convincingly broken out above resistance of a downtrend line (dotted black line) that had been in place throughout all of 2013. That breakout above the downtrend line also coincided with a sharp move back above its 10-week moving average (roughly equivalent to the 50-day moving average on the daily chart). Furthermore, last week’s rally in $SLV was confirmed by a sharp increase in volume. This, of course, indicates institutional money flow into the ETF. Like $SLV, $GLD has also moved back above its 10-week moving average (and 50-day moving average), but $SLV showed substantially more momentum and relative strength than $GLD last week. Moreover, last week’s volume in $GLD was only on par with its 50-week average level ($SLV traded nearly double its average weekly volume). Between $GLD and $SLV, the latter is definitely more appealing to us on a technical level. Now that $SLV has confirmed its trend reversal on the weekly chart, and has also formed two “higher highs,” we will be stalking $SLV for a low-risk buy entry in the coming days. Ideally, we would like to see $SLV retrace back down to near the prior downtrend line (which has now become the new support level). However, even if $SLV does not pull back that much, we will be looking for either the formation of a bull flag type pattern on its daily chart, OR a pullback that forms a bullish reversal candle (at which time we would look to buy above that day’s high in the following session). To reiterate, $SLV is NOT actionable at the moment because we do not chase stocks and ETFs that have already broken out too much above resistance. Nevertheless, most breakouts are followed by a pullback shortly thereafter, or at the very least, a short-term period of consolidation (such as a bull flag). As always, will be sure to give subscribing members of our swing trading service a heads up if/when we add $SLV to our watchlist as an “official” swing trade setup. In the meantime, don’t forget we are looking to add to $USO if it breaks out above the high of its recent consolidation. We are definitely seeing the rotation of institutional funds back into the commodities markets, which we plan to take advantage of and profit from.
  5. Major oil exporters, such as Canada can experience changes in their currency values if there are major changes in the underlying oil price. Other areas, like the US, can also see effects, because oil is traded and valued in US Dollars.
  6. By Brian Baskin and Grainne McCarthy OF DOW JONES NEWSWIRES August 31, 2008 15:47 ET (19:47 GMT) NEW ORLEANS (Dow Jones)--Crude oil futures jumped at the open of electronic trading Sunday, as the energy industry braced for the onslaught of Hurricane Gustav. Moving to respond to potential energy price movements ahead of Gustav, the Nymex opened electronic trading early on Sunday. All energy products trading on the electronic platform opened for trading at 2:30 p.m. EDT Sunday. Light, sweet crude futures for October delivery were up $2.13. or 1.8%, at $117.59 a barrel, off a session high of $118.39. The products, which include benchmark crude oil, gasoline and natural gas futures, were originally scheduled to start trading at 6 p.m. Sunday. Pit trading on the floor of the Nymex is closed Sunday and Monday for the Labor Day holiday. The shift in electronic trading hours gives investors greater time to hedge their bets ahead of Gustav. Trade appeared to be light and the modest nature of the move underscored a reluctance to act until Gustav has made landfall and the extent of any long term damage to Gulf Coast energy infrastructure becomes apparent. Producers have shut in 1.3 million barrels a day, or 96% of production in the Gulf of Mexico, according to the U.S. Minerals Management Service, but can restore that output within days to undamaged platforms. Overriding concerns about the state of U.S. energy demand are also limiting moves higher in oil prices. "I don't know if the market is more concerned about softening in demand than they are for a lack of production," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. "Now we're getting closer to the event and so there may be a little bit more nervousness." Flynn expects oil futures to trade to the higher end of their current range - around $120 a barrel. Then, the market "will basically wait until we see what happens with the storm and how much damage is actually done," he added. Gasoline futures recently traded at $2.9525 a gallon, down from Friday's settlement of $3.0099 a gallon. Fuel is expected to be in short supply, as Louisiana residents flee by car and refineries shut down ahead of the storm. Nine refineries with a total capacity of2.2 million barrels a day, or 12.5% of the U.S. total, have shut down, in the New Orleans area and at the Texas-Louisiana border. The Gulf Coast is home to about 40% of U.S. refining capacity. The market appears to be trading the difference between fuel and crude prices for refiners, instead of the gasoline contract itself, said Tony Rosado, a broker with GA Global Markets. The difference, known as the gas crack, is up about $1.70 to $6.30, indicating that traders believe demand will stay strong even as spare supplies dwindle. http://www.lloyds.com/dj/DowJonesArticle.aspx?id=402514 -fs
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