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zdo

The $!(V@# / DOW Spread

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The $!(V@# / DOW Spread

 

This is a MANY / MULTIPLE years trade campaign of Long Silver – Short Dow.

Have worked this position 7 of the last 10 years

Refer to http://www.traderslaboratory.com/forums/blogs/zdo/'>http://www.traderslaboratory.com/forums/blogs/zdo/

This spread is what has really been going on in that blog. Since the Dow side has had and most likely will have general strength nominally (due to the very money system itself and the symptoms of “quantitative easing”, etc.) I don’t just let the position ride when the Dow is running up. ie I am not extremely patient with this trade – even though for various reasons (vacations, other priorities, etc) I will sometimes just let it ride without any legging. I work it – mainly because that’s just the way I am and also because, for me personally, I’ve learned that most leveraged positions require watching and working them to allay risk anyway. Hence the legging in and out of the Dow short ( and even the occasional long!). Basically, ten 40 point losses is preferable to one 1000 drain and that’s sorta close to the results since around Oct 09 when I started the blog.

 

The exploration and development of Stay Lines was implemented to give me a very quick, fairly consistent way to leg in and out of the Dow side of this trade.

The long silver side of the position is much more fixed or ‘slow’ - illustrated by the use of a weekly chart for it compared to a half day chart of the Dow and I only leg out of the long on seriously confirmed downtrends .

 

Note: this trade is in leveraged paper using futures contracts (and leveraged ‘fx’ for fine tuning the sizing of the silver side at times) The campaign is run distinct from long term ‘trades’ in physical metals and campaigns, in distinct accounts / allocation of capital, and in distinct methods and systems. It is also completely unhooked from my intraday trading sessions and other shorter term systems. Generally, I like to spend just a few minutes a day with it during mid session congestion

 

Charts

Blog used half day futures chart (running 12 to 12 to 12…ET)

Thread will use half day cash index chart (running 1st and 2nd half of day session…ET)

Am running analysis on actual Dow index ($INDU) instead of futures charts, and also being less specific about entry points on the futures because this whole Stay Line deal is one off experimental, unproven, and so antithetical to my usual trading style and methods that I think it’s prudent to even further reduce any appearances that it is ‘trading advice’

Stay LInes are current on the new chart. If you need to catch up, see http://www.traderslaboratory.com/forums/blogs/zdo/

 

The Stay Lines are a quick and easy, time efficient process. I don’t even look at background to see if my numbers could be tweaked with SR etc.

If price action is below an active red line, I’m short.

If price action is above an active green line, I’m back flat / out.

 

Enough background . Start afresh – hootless!

If I can (well sort of) frame this as Day 1 (of this whole 10 year campaign so far )…then certainly you can – since it really is Day 1 for you :missy: . Point is – the position has not really made its real long term anticipated move and it may be years before it does…

 

Happy spring to all.

d1003231.thumb.jpg.77f4a3d1e967f7ffda32bf8ae2c4474b.jpg

Edited by zdo
jpg quality

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Line Changes:

Extended new Active Red Line same angle

Tentative green stay line updated

Alternative dark red trend line added. Will resolve soon.

 

Position Changes:

None. Flat

( and long Silver btw. This will go unmentioned most of the time…)

 

Order Changes:

Sell stops at ~ 10,590 Jun to go short 25% net allocated

 

Comments:

... the scent of a possible trend change...

 

Also... And throughout this and any subsequent posts

Disclosure! This is not trading advice. Only idiots would consider or construe it to be trading advice

d100325.thumb.jpg.1c2c08094d580f260332ec768a101fd0.jpg

Edited by zdo

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Some comments about Legging in and out of spreads.

I am an intraday ‘high frequency’ trader (HF for me, not for a server farm, btw). Always was, always will be. Yet it was an almost completely opposite type of trading, seasonal positions and spreads , that way back when allowed me to survive the learning curve to intraday proficiency and stability. When I first started trading spreads many years ago, I learned the ‘easy’ way to leg in and out of spreads. I messed up / f - arbed up many a trade but I learned to cease and desist the tricking myself with those tricks. It took me a while to finally learn the hard way not to do it.

But at the same time I quit doing those tricks, I promised myself I would get good enough to come back and leg in and out of spreads profitably… With work and experience, I learned the hard way how to do it appropriately. I laugh now about how naïve I was. If you are a beginning trader and if part of your brains want to leg / spread / arb / whatever in and out of spreads, you can learn from the experiences of others to ‘Don’t do it yet’ or you can learn the hard way to ‘Don’t do it yet’ … either way you will learn… all the best. zdo

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Note: Made a small session time frame adjustment / correction to chart setup which required recalibrating some of the lines. This produced no changes to orders / action points

 

Line Changes:

Extended tentative new red Line same angle. Will activate it (and may raise it by ~ 40 points if aggressive) Monday

Switched to new alternative dark red trend line. Will most likely drop lower one soon.

 

Position Changes:

None. Flat

 

Order Changes:

Sell stops moved to ~ 10,614 Jun to go short 25% net allocated

d100226.thumb.jpg.8d5ed334d2d3ca451559add060f5baee.jpg

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Line Changes:

Activated new Red line, same angle, whole line raised ~ 30 points

Original lower angled dark red trend line deleted. Also lowered whole new trend line ~ 50 points

(“Trend Lines are meant to hold. Stay Lines are meant to be broken” Stay Lines blog circa 12/09).

 

Position Changes:

None. Flat

 

Order Changes:

Moved Sell stops to ~ 10,742 Jun to go short 25% net allocated

d100329.thumb.jpg.13ee16718279f4375805dc0c14c48db3.jpg

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Line Changes:

Added new tentative Stay Line, same 0 angle

 

Position Changes:

None. Flat

 

Order Changes:

(Errata: from 3/29

“Moved Sell stops to ~ 10,742 Jun to go short 25% net allocated”

should have been

“Moved Sell stops to ~ 10,680 Jun to go short 25% net allocated”

I grabbed numbers from cash chart instead of futures :doh:)

 

Moved Sell stops to ~ 10,729 Jun to go short 25% net allocated

d100331.thumb.jpg.a3565aaf8f94d70eab8403fbdb73f218.jpg

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Line Changes:

Extended red entry line at slightly lower angle

New tentative Stay Line, same 0 angle

 

Position Changes:

None. Flat

 

Order Changes:

Moved Sell stops to ~ 10,890 Jun to go short 25% net allocated

 

Comments:

Glad I’m long Silver

Glad I’m not short Dow…

d100406.thumb.jpg.63dc0373245a290a5facb7391fe55873.jpg

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Line Changes:

None

 

Position Changes:

None. Flat

 

Order Changes:

None. Sell stops stay at ~ 10,890 Jun to go short 25% net allocated

 

Comments:

Nice first kiss of the red line ups the probs that it will be broken

No indication of the extent of the break is given…

 

Comments:

Off topic - It may be premature… but for the first time in literally years, I am including rates and spreads in the trading info I look at…

Note: Not saying rates will actually be more or less of a factor than before

…not that the ‘carry’ is going away

… or Treasuries will be another dumb bubble

.. or…

just thinking rates may start taking turns more often in the crowds’ cycle of ‘dominant concerns’

d100407.thumb.jpg.2add7c9d0433b29b3d28b39a617cf0ea.jpg

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Line Changes:

New down sloping Green Stay Line activated

 

Position Changes:

Short short 25% net allocated at ~10890

 

Order Changes:

Stop Losses in at ~ 11,070 Jun

d100408.thumb.jpg.61879605082c301a68c4debe42eeebcd.jpg

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Line Changes:

None

 

Position Changes:

None. Short 25% net allocated at ~10890

 

Order Changes:

None. Stop Losses remain at ~ 11,070 Jun

 

Comments:

Extreme projections, etc … that rarely unfold that way… but still interesting…

Speculative Mania Is Now At May 2000 Bubble Levels | zero hedge

 

Disclosure: This link is unmitigated self serving manipulation !

A Simple Experiment to Disprove the Alleged Gold/Silver Price Suppression Schemes | zero hedge

 

And - Fun in the land of the rising sun

Washington's Blog

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Line Changes:

Active Green Stay Line extended horizontally.

Fairly radical realignment of start/stop points of all the red lines. Note, however, that none are active / actionable at this time

 

Position Changes:

None. Short 25% net allocated at ~10890

 

Order Changes:

None. Stop Losses remain at ~ 11,070 Jun

 

Comments:

More smoke on the water

Exclusive: Second Whistleblower Emerges - A Deep Insider's Walkthru To Silver Market Manipulation | zero hedge

 

“Better to be a warrior in the garden, than a gardener in the war”

d100414.thumb.jpg.53682f39d646c06ab196b15bf2931d39.jpg

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Line Changes:

None really. Still scooting inactive red lines around

 

Position Changes:

Stopped out. About half of it went off yesterday. The rest today. Flat

 

Order Changes:

None.

 

Comments:

Nice first kiss of StayLine, upping the odds is will be broken.

But also closed there... Will likely aggressively ‘trail’ up into this rally.

 

SP to 1200. & up to .618 retracement of the major 'correction' of last couple years...

 

Climbing a wall of worry or climbing a wall of q.e. ?

d100415.thumb.jpg.6ce62111b9e871f2d0988e103ff5fd4f.jpg

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Line Changes:

Activated, then deactivated current Red sell line. If it breaks today will work into a position with limits next week. The next / tentative Red sell line will most likely be active right out the gate

 

Position Changes:

None. Flat

 

Order Changes:

None.

 

Comments:

2 charts. attached. One from before opening and one from a few minutes ago.

Nice first kiss of the red line. Ups the odds it will be broken. No projection as to extent though.

Smoke on the water – this time for real ... cold summer?

Busy day fitting this in, forgetting something else I was going to say…

have a great weekend.

d100416.thumb.jpg.d5da8372bfb6cea11bf88e632022135b.jpg

d1004162.thumb.jpg.cbc715e0d0dd4bc2d3e0d2f1f6ce3c11.jpg

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Line Changes:

Moved the next new active Red sell line down to start at this mornings lows. Same steeper angle as in Fri's chart.

 

Position Changes:

None. Flat

 

Order Changes:

Sell stops in at ~10917 to go short net 25% allocated.

 

Comments. No time to post picture. Will post in AM

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Line Changes:

None

 

Position Changes:

None. Flat

 

Order Changes:

Moved Sell stops in to ~10980 to go short net 25% allocated

d100421.thumb.jpg.6898b54d74a8e67a73ba85d9b9c8216a.jpg

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Line Changes:

Brought Active Green Stay Line down some. See comments below about placement.

 

Position Changes:

Short net 25% allocated ~10980 Jun

 

Order Changes:

Placed stop losses at ~ 11210 Jun

 

Comments:

Haven’t put much work into the original placement of a StayLine ! especially when there in no appropriate recent pivot to start from…

 

Been blogging and posting about these StayLines for months with no occasion (yet) to actually apply them… patience…

 

Been ‘discussing’ rates a little bit…

Opinion pieces I ran into

Bonds Nowhere To Go But Down | Sol Palha | Safehaven.com

 

&

 

If is wasn't so important, I wouldn't mention it a second time. But it is very important, and could be a "game changer" if we break above this long term resistance in the next few weeks ... so, please keep an eye on it.

What is it?

It is the 30 year bond yields ... symbol: TYX. Our comments are below ...

________________________________________

Bernanke and everyone in the White House will try to stop this from happening. If they can't, there will be real trouble ahead for the economy. Right now, the 30 year yields are at a MAJOR, 15 year testing point.

Below is an updated chart (as of 8:40 AM this morning) showing a 17 year down trend on 30 year bond yields. Its resistance line has had 7 touch points.

We are now at number 7, and international investors want to be paid higher interest for what they perceive to be an environment with much higher risks. That pressure makes this current test a MAJOR testing point.

Bernanke is sweating right now, because if he can't be successful at keeping interest rates down, the housing market will take another turn for the worse and foreclosures will keep rising. (Bernanke is trying to be very proactive in driving rates down right now. There is a lot of international pressure for higher rates coming in, so it will not be as easy as he thinks.)

If we break above the resistance line shown, we can expect interest rates to rise to a level that would increase monthly mortgage costs by 20% to 25% this year.

This could be one of the most significant events seen during the past few years.

Marty Chenard

d100422.thumb.jpg.e1a0147eeb2a72502a44b25ca9b86724.jpg

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Line Changes:

None except extending Green Stay Line horizontally.

 

Position Changes:

None. Still short net 25% allocated ~10980 Jun, Stop losses at ~ 11210 Jun

 

Order Changes:

None

 

Comments:

Came within 2 ticks of starting to get stopped out yesterday…

d100427.thumb.jpg.8183ab2e11a20a6789d971d0d85f4773.jpg

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Line Changes:

None

 

Position Changes:

None. Still short net 25% allocated ~10980 Jun, Stop losses at ~ 11210 Jun

 

Order Changes:

None

 

Comments:

…reminder - am ‘supposed’ to be short 100% net allocated all the time in this position…

…reminder – Trend Lines are placed to hold - Stay Lines are placed to be broken

d100428.thumb.jpg.9ee14a3efb8ee16120f2d8792ac13400.jpg

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Line Changes:

None

 

Position Changes:

None. Still short net 25% allocated ~10980 Jun, Stop losses at ~ 11210 Jun

 

Order Changes:

None

 

Comments:

Up is down… way up is up

Changed background color of chart... Have a great weekend all

d100430.thumb.jpg.0373a1b099d6a9c73a87b2c5913c5f99.jpg

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Line Changes:

Extended Active Green Stay Line horizontally

 

Position Changes:

None. Still short net 25% allocated ~10980 Jun, Stop losses at ~ 11210 Jun

 

Order Changes:

None

 

 

Comments:

SP / Gold near parity…

d100504.thumb.jpg.5dcae95e20a9a65cb88fd3156be88693.jpg

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Line Changes:

Extended Active Green Stay Line horizontally. Start working Stay Lines Monday.

 

Position Changes:

None. Still short net 25% allocated ~10980 Jun, Stop losses at ~ 11210 Jun

 

Order Changes:

None

 

Comments:

Will start looking for lines to add another % to short position

 

... off topic

 

What a great week to be a trader!

 

My guess - ‘computers’ triggered the wild ride – probably YEN trades…

 

…and these days you’re either long the world or short the world…

 

Have a great weekend.

 

PS It's not allowing attachments right now - will post picture later

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Line Changes:

New downsloping Green Stay Line.

 

Position Changes:

None. Still short net 25% allocated ~10980 Jun,

 

Order Changes:

Stop losses moved to ~ 11160 Jun.

 

Comments:

Friday and Monday charts posted...

d100507.thumb.jpg.7bba580d0ca8bf156d842fd60941049a.jpg

d100510.thumb.jpg.ca6c4981a55a6a109ba66e2721178cbd.jpg

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Line Changes:

Extended Active Green Stay Line same angle.

Added new tentative down sloping trend line...

Will work additional short entry via lines at some point...all red lines currently there on 'time' only, not on 'price levels' at all ...

 

Position Changes:

None. Still short net 25% allocated ~10980 Jun

 

Order Changes:

Stop losses moved to ~ 11110 Jun

 

Comments:

All that posting for this? :)

Silver side is doing fine...

d100512.thumb.jpg.9d1c31e07f93904f4fe0c163ec6fae38.jpg

Edited by zdo
speleng

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