Aug 01

Exit Long $WFC

One more exit signal tonight, bringing us up to 8 for the week, and if you’re keeping score at home so far they’ve been for -0.5%, -1.9%, +2.7%, +2.9%, -1.3%, +2.8%, +5.0%.

$WFC is another one with a small profit that closed through its trailing stop today. You may recall we had already seen it close below its 50-day MA two weeks ago only to recover as it had done previously, but it wasn’t able to withstand getting caught up in this week’s market decline, gapping below that previous low this morning and failing to sustain any subsequent attempts at recovery. It also coincides with a 20/50 MA cross, and marks the third consecutive weekly close below its 10-week MA. That’s enough for us to step aside.

Long $WFC 5/23 +0.9%

AlphaCapture

 

 

 

Jul 31

Exit Long $SRE, $UNP, $PPG

We’re staying another night in Stop City having received three more exit signals. It’s more of the same really, all trailing stops for small wins and losses. That was a huge one day move in the market, but as big as it was, in the context of the length and magnitude of trends we typically play, it’s of little consequence so far. We don’t need to have a view on what happened or why, we just go with the evidence price gives us. Many trends remain intact and we’ll stay with them for as long as that’s the case, but for our timeframe we have to bid farewell to these three:-

Long $SRE 3/17 +5.2% (incl 3/25 div $0.66, 6/27 div $0.66)

AlphaCapture

 

Long $UNP 4/22 +2.9% (incl 6/9 split 2:1, 6/12 div $0.455)

AlphaCapture

 

Long $PPG 5/30 -1.3%

AlphaCapture

 

 

 

Jul 31

Exit Long S&P

Exit Long S&P ($ES_F) 5/13 +$2,000.00 per contract

Well that was interesting. I had been concerned that our most recent trailing stop level was one of those ‘obvious’ ones, a combination of the most recent swing low and the 50-day MA that can result in a marginal break that reverses on you after you exit, but even if that still proves to be the case, it’s hard to think of a more emphatic move than what we saw today. The S&P sliced through the level in question and just kept going. It’s halved our profit on the position in one fell swoop, but a profit it still is. We’ll now step aside and watch what develops from here.

AlphaCapture

After the exit in the Yen yesterday, and the S&P tonight, that just leaves:-

Long 30yr ($ZB_F) 2/3 +$5,781.25 per contract

Long Live Cattle ($LE_F) 3/28 +$5,290.00 per contract

Long NASDAQ ($NQ_F) 6/26 +$1,690.00 per contract

 

 

 

Jul 30

Exit Long $CMS

It’s not for me to speculate the reasons behind any market move or whether anything is justified or not, but  I find it interesting that those that do, have glossed over the fact in the recent weakness ‘defensive’ names have acted anything but defensively. In fact, they’ve been leading to the downside. Of course, those with a bearish narrative will jump on any weakness as a confirmation of their view, but it’s noticeable to me the exits posted on here recently have mostly been in names defensive in nature, coinciding with the weakness seen in consumer staples, utilities and transports. And yet, just today in another weak session we saw a momentum name like $GILD make new highs, something conveniently ignored by the bears. They seem to have overlooked the possibility that what we’re really witnessing is simply a case of further market rotation rather than the beginning of the much-anticipated correction.

Either way, we will let price decide. For now, we have another exit, with a trailing stop hit on $CMS for a small profit. Even adjusting for the dividend which I know some of you like to do, this has still done enough to warrant us leaving the scene. We still have a long in $SRE on the books which doesn’t look far behind.

Long $CMS 3/17 +3.8% (incl 4/30 div $0.27, 7/30 div $0.27)

AlphaCapture

 

 

 

 

Jul 30

Exit Long Yen

Exit Long Yen ($6J_F) 5/21 -$1,850.00 per contract

It’s been two months since we had an exit signal on the futures portfolio, usually an indication there are some strong trends underway, and while that’s the case elsewhere with equities, bonds, and live cattle, it wasn’t the case here in the Yen at all. It didn’t do much of anything for the longest time, and after looking like it was about to resume higher it slid back in the last week culminating in a steep move through our stop today to trigger an exit for a loss of $1,850 per contract.

AlphaCapture

That leaves:-

Long 30yr ($ZB_F) 2/3 +$6,000.00 per contract

Long Live Cattle ($LE_F) 3/28 +$6,530.00 per contract

Long S&P ($ES_F) 5/13 +$3,887.50 per contract

Long NASDAQ ($NQ_F) 6/26 +$3,090.00 per contract

 

 

Jul 29

Exit Long $AIG, $CL

First off I should note that I’ve had a handful of entry signals in the last couple of weeks that I haven’t been documenting here in my usual manner. This is part of the adjustment I need to make on what I publish now that I am managing client money. I still haven’t finalized exactly what I will show here going forward, I may start to do a summary at the weekend after the fact, but all will become clear in the next few weeks. There will be other changes too going forward which I will detail in due course. Please bear with me as I make the transition.

In the meantime, we have two exit signals tonight. Neither of these require much explanation, both are trailing stops for small amounts:-

Long $AIG 4/25 +2.2% (incl 6/6 div $0.125)

AlphaCapture

 

Long $CL 6/2 -2.1% (incl 7/16 div $0.36)

AlphaCapture

 

 

 

 

Jul 25

Exit Long $BF.B

Long $BF.B 5/19 -0.3% (incl 6/2 div $0.29)

$BF.B had initially continued to edge higher after our entry, but it’s since pulled back over the last 4-5 weeks. The pullback in percentage terms is minimal, but it’s been enough to take out its 20 and 50-day MA’s and close below a trailing stop to trigger an exit for a small loss. Longer-term this is still a huge trend, but we don’t need to hang around to find out if it’s going to eventually resume higher. For our timeframe and our risk parameters it’s done enough for us to step aside; a break of MA’s, a pattern of lower highs and lower lows, and the second straight close below its 10-week MA, which hasn’t happened since October.

AlphaCapture

 

 

 

 

 

Jul 18

Forbes Interview

This week I was interviewed by John Navin at Forbes where we talked about how I approach trend following, how to explain it to your neighbors, and some of the people who have influenced me. You can read it all here:-

Forbes Interview

 

 

 

 

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