Hi, these are just ideas not recommendations, sometimes I trade my ideas, sometimes I don’t.
Always remember, yours is the responsibility for your trades,
Good luck,
Erick



Monday, September 24, 2012

My own US Dow Jones Oil & Gas Index short analysis.

Around here, a country with a US$ 300.00 a month minimum wage, a gallon of gasoline cost US$ 6.19. Dominican Republic gas prices are supposedly indexed by law to international oil prices, and as they say in the Commerce Ministry “si sube sube, si baja baja”, meaning that if oil prices go down our gasoline will follow, so personally and for obvious reason I would like oil prices going down forever, and hope that the Ministry will uphold the law.

Oil and Gas reached its immediate target at 646.02, surpassing it by almost 2% briefly; the volatility is increasing slowly reflected in the increasing BB bandwidth, growing volatility signals decreasing prices most of the times.


My support line at 629 is still holding, it was touched briefly last week but price managed to close higher, the uptrend is still on, a daily close this week below 629 will signal the end of it.

So this is what I would do with this group:
If long, I will be selling soon.
If with no position I would not buy or short oil&gas now, a closing below the support line does not necessarily means an instant drop, prices could zig-zag for a while and start going up again. The last is my line of thinking right now.
I don’t have a position in Oil and Gas.

שָׁלוֹם to all,

Monday, September 17, 2012

Dow Jones and Technology support lines

I don’t understand the need to positionate for a drop before it starts; the Dow lost 7311 points or 53% from mid-December 2007 to march 2009, a 15 months period in which we had plenty of positionate-opportunity. Now, I am sure the indexes will go down in the future, how far, well…, for me what works better is going in the trade after it begins trying and getting most of the time a 50% of the move. Shorts and longs are completely different, longs take their time like going up a hill in an all-terrain 10K, shorts start and end before you realize it, that’s why is easier getting profits in an up move. If you are a profitable trend trader like me you know what this is about.



Having said that, this is a prediction of what will happen in the near future, and remember “Prediction is very difficult, especially if it's about the future.”: The indexes will keep last days levels marginally, maybe going up a little but soon it will come a big drop day that will take the indexes near today’s level, or worse, they’ll start going down immediately this week. After a drop of about 3 to 10 percent it will follow a whipsaw period and then the uptrend will start again. Anyway I am completely out of the markets having selling my last positions today, I am not short and don’t foresee going short soon, for shorts I need special confirmation: first a quick move down followed by a trendless period and then I will take the second short after it is confirmed by traditional technical analysis.

One last thought about markets dropping in the near 2 months future: I am a Dominican national and resident, we don’t have a “bourse” here since there isn’t a single publicly traded Dominican company, but if we had a stock exchange here there is no way our markets are going down two months before a presidential election.


The Dow Jones met its target at 13250 but it is above the stop line at 13272 so it is a trade-off, either you keep your long and sell at the closing below the stop hoping it keeps expanding weekly or take profits at target, I sold today.


With technology is more or less the same, Tech gave the long signal after the Dow so it is supposed to end the uptrend later, the target is not met yet, I bought with leverage so decided to sell today, no one goes broke taking a profit.

מזל טוב all,

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About Me

I am a civil engineer who likes charts, to me, speculating in the markets is both a hobby and a second profession and in my view the stock market is the most honest environment, since it is only your knowledge and preparation that matters. I live, and work in the construction industry, in the Dominican Republic. I read and answer all my mail so please feel free to write sternloinaz@gmail.com Thanks, Erick