An outstanding ride – Set stops for First Trust Natural Gas Index (FCG) & PowerShares Commodity Index Tracking (DBC) February 28, 2011
Posted by Marlowe Cassetti in BAL, DBC, FCG, TAN.add a comment
Last Friday the markets closed with small gains, but for the week the markets were down. However, Friday was one of the best days yet for the RSI portfolio. Thus today I set trailing stops for the two positions FCG & DBC. A quick review .. when a position reaches the +2.0R level an order to set a trailing stop 0.3R below the high achieved from that point forward is initiated. In that way, profits are allowed to run within the 0.3R band. On the losing side VNM and TBF are down -0.63R and -0.59R respectively to cause me to set alerts at the -1.0R levels for a sell. As you can see, knowing your R number (dollar risk) is important to the RSI methodology.
RSI’s last two picks were BAL & TAN and I recommend that one should wait for a pullback. BAL did pullback and has made a strong recovery while TAN has continued to fall. We have made some outstanding profits with our two BAL trades. The question … Is there any more upside potential available? I will contemplate this question over the next few days.
Today RSI remains silent; no new picks.
Catch you later.
Market mixed today – RSI picks AGQ, again February 24, 2011
Posted by Marlowe Cassetti in AGQ.add a comment
RSI made a buy selection on a fund it picked in early Dec. 2010 and which is in the RSI portfolio. However, since this has some potential, I will share this one with you:
- Buy 50 shares ProShares Ultra Silver (AGQ); Market Stop = $19.67 Target Alert = +$39.33 Volatility = 11.85%
AGQ has made a strong gain since late January, took a 9% hit and has dropped back. Monitor this fund and jump in after it completes this correction. This is a high volatility fund, so be careful.
Catch you later.
Stocks sink on Libya unrest – RSI picks TAN & BAL February 22, 2011
Posted by Marlowe Cassetti in BAL, DBC, FCG, SGG, TAN, VNM.add a comment
Stocks had a bad day today, slipping over 2% on troubling news of civil war in Libya. The RSI portfolio had a commensurate hit too. Yesterday there were many positions over +1.5R and none under -0.5R. After the close today, the picture was different. There were two positions , VNM & SGG, under -0.6R and only two, DBC& FCG, over +1.4R. Quite a reversal of fortunes. What to do now? Stick to our RSI trading plan … Sell at the -1.0R level and set a 0.3R trailing stop upon reaching the +2.0R level. Why continue? Nobody really knows if this is a change in the overall market trend, so selling out now is your vote that the trend has changed. It is tempting to sell the winners and dump the losers, but that isn’t the RSI strategy.
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After the close today, RSI had two buy picks, including a recent favorite:
- Buy 740 shares Guggenheim Solar (TAN); Stop = -$1.35 Target = +$4.05 Volatility = 6.25%
- Buy 117 shares iPath DJ-UBS Cotton TR Sub-Idx ETN (BAL); Stop = -$8.53 Alert = +$18.76 Volatility = 11.28%
TAN has been in a nice uptrend and took a hit today. This fund invests in global solar industries. RSI likes this fund and if you want to have some solar exposure buy this on a recovery.
And here is BAL again for another shot. We have made +5.2R with this one and maybe another +2R is in the cards. It is sure tempting since cotton may still be on fire.
Catch you later.
Dodging the bullet – RSi picks ProShares UltraShort 20+ Year Treasury (TBT) February 18, 2011
Posted by Marlowe Cassetti in BAL, TBT.add a comment
Talking about dodging the bullet, did you see what BAL did today? It dove 11.66%, just one trading day after it hit our trailing stop. Of course, due to the random nature of price movements it could just have easily gained 11.66% today. The markets do have a crap shoot nature to them, so we cannot lose any sleep over the spin of the roulette wheel.
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Stocks posted their third straight week of gains at the close today. We do love the bull market euphoria that is beginning to emerge. I have to remember to not get caught up in the excitement. RSI follows a rational methodology that doesn’t include emotion.
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After a long wait, RSI finally came up with a buy recommendation today. And here it is:
- Buy 174 shares ProShares UltraShort 20+ Year Treasury (TBT) Stop = -$5.74 Target = +$17.23 Volatility = 5.72%
Let’s take a look at this fund. It has been on a good uptrend and it appears to have completed a bit of a dip and it may be on its way to resume its trend. It traded 15 million shares today, so it is correct to say that it is well followed. The lower plot indicates that the fund may be starting an accumulation phase. I believe that RSI may have made a good pick and I wouldn’t have a problem buying it here.
Well enjoy the three day weekend. I will catch you later.
Cotton was on fire today! February 17, 2011
Posted by Marlowe Cassetti in BAL.add a comment
While the market was modestly higher, the RSI portfolio surged even higher with iPath DJ-UBS Cotton TR Sub-Idx ETN (BAL) surging +1.2R. A stunning gain that propelled it well beyond it +2R trigger level. Before the end of the day the trailing stop was hit for an overall profit of +3.2R. This is a good example of the value of the trailing stop letting profits run to higher levels. Couple this with another +2R gain in BAL earlier this month and in this one fund, a +5.3R gain was achieved. As of the market close today, one half of RSI positions sit above the 1.5R level and none are below the –0.5R level. Remember, BAL was purchased on Feb. 7th, just a few days ago. I cannot get too overconfident in this recent performance, because this is only one day. Remember the old adage – Don’t confuse brains with a Bull Market.
And RSI continues to remain silent and not issue any buy recommendations. So we have to sit back and wait for another buy signal to happen. In the mean time, our profits keep running.
Catch you later.
Stocks up on strong earnings – Set trailing stop on iPath DJ-UBS Cotton TR Sub-Idx ETN (BAL) February 16, 2011
Posted by Marlowe Cassetti in BAL, IYF, SGG.add a comment
Things have been pretty quiet here at RSI for over a week. However, the RSI portfolio had an outstanding day today with iPath DJ-UBS Cotton TR Sub-Idx ETN (BAL) climbed to over +2R status. I placed a -0.3R trailing stop on this position. The next position that is close is iShares Dow Jones US Financial Sector (IYF) which is at the +1.72R level. At the other end of the spectrum iPath DJ-UBS Sugar Trust Sub-Idx ETN (SGG) is at the -0.41R level, not quite to 1/2 the stop loss level. Photo courtesy of AP via Yahoo Finance.
At the close today, there were no RSI buy recommendations. There has been a drought of Buy recommendations from the many RSI trading system modules. I guess this is the nature of the beast and we have to live with it.
Catch you later.
Stocks rise today – Sold XOP, Bought BAL, EWP & TBF February 8, 2011
Posted by Marlowe Cassetti in BAL, EWP, TBF, XOP.add a comment
The markets saw a nice rise today. With that said, it was a busy trading day today as XOP took out its trailing stop for a net +2R gain. The RSI portfolio added the requisite number of shares in BAL, EWP and TBF. All these were from RSI recommendations in the past few blog postings. The net effect is that the RSI portfolio has reduced its cash position from about 30% to 9% with an attendant increase in market risk.
Catch you later.
Good Market Day – Two new picks today iShares MSCI Spain Index (EWP) & ProShares Short 20+ Year Treasury (TBF) February 7, 2011
Posted by Marlowe Cassetti in BAL, EWP, TBF.add a comment
Before I discuss RSI’s two new picks, let me confess that I was asleep at the switch today. After the close Friday, RSI picked iPath DJ-UBS Cotton TR Sub-Idx ETN (BAL) and I suggested buying after it completed the dip. Well today BAL was up a huge 6%. Lesson learned … have my broker message me on a price breakout. With that said, I will continue to monitor BAL for a potential buy.
And now for today’s recommendations from RSI:
- Buy 171 shares iShares MSCI Spain Index (EWP); Stop = -$5.83 Target = +$17.48 Volatility = 5.56%
- Buy 281 shares ProShares Short 20+ Year Treasury (TBF); Stop = -$3.55 Target = +$10.66 Volatility = 3.08%
Let’s first look at EWP. Spain is the hallmark financially troubled European country. However, this fund has moved up smartly and money is flowing into it. The chart illustrates that a local dip may be completing, indicating a good buying opportunity. This might be a good one at that.
The other fund, TBF is a short US treasury vehicle. The treasuries have been in a downturn so this has benefited this fund. This is an interesting chart since it appears to be lifting off a long consolidation. If interested, it should be okay to buy at this point. My only reservation is that the low volatility requires a rather large commitment of dollars to achieve a -1R risk. That’s the tradeoff.
Catch you later.
The BAL conundrum – sell then buy? February 5, 2011
Posted by Marlowe Cassetti in BAL.add a comment
Okay, here is the deal. A few days ago the RSI portfolio holding of iPath DJ-UBS Cotton TR Sub-Idx ETN (BAL) achieved a +2R gain and I reported that I placed a trailing stop on that position. The stop was hit yesterday for an overall +2.2R gain. Today after the market closed, a different module that picks price excursion opportunities issued a buy on BAL. Imagine my surprise to see BAL back in the mix. Here is the recommendation:
- Buy 160 shares iPath DJ-UBS Cotton TR Sub-Idx ETN (BAL); Stop = -$6.23 Alert = +$13.71 Volatility = 9.27%
Certainly the unrest in Egypt has influenced the price of cotton causing the recent gyrations in BAL. With that said, buying this fund after it completes this dip is a calculated, but reasonable risk. RSI expects BAL will continue on its upward path….and maybe another +2R gainer?
Have a great weekend. I plan to do just that. And Super Bowl XLV too.
Another +2R achiever – SPDR S&P Oil & Gas Exploration & Prod (XOP) February 2, 2011
Posted by Marlowe Cassetti in XOP.add a comment
I fielded a question about setting trailing stops and I will share it with you .. How do you compute the trailing stop parameter? Actual it is quite easy. Using our standardized $100,000 portfolio with a risk of $1,000 (1% risk) we need to compute the trailing stop amount for a 0.3R stop. If your holding is 110 shares then the per share dollar amount is equal to $300 divided by 110 shares which is $2.73. Therefor you enter a trailing stop order to sell the entire 110 shares with a parameter of $2.73. This means if the price falls $2.73 from the recent high, a sell at the market order will be placed. It is a simple computation providing the number of shares is scaled to the ATR volatility. When RSI recommends an ETF to buy, the recommended number of shares is always scaled to a dollar risk of $1,000.
Coincidentally, this morning I ran through this same computation when SPDR S&P Oil & Gas Exploration & Prod (XOP) hit the +2R level. I hope this isn’t an isolated event.
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I’m developing a new module to replace some of the existing modules, that are not producing very many opportunities. I hope to debut the new module in the next few weeks or even sooner.
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No new RSI buy signals today. Catch you later.
