I am still toying with the idea of blogging on a more consistent basis - but the cons outweigh the pros. I have until X's return in June to fill space on the blog - maybe 2010 will be more motivational than 2009 when it comes to blogging.
I wanted to revisit the longer-term view of the major indexes. The S&P (I use SPY as a proxy) has been stuck in a range since the end of August, but looks like it is trying to break out as of the last few weeks (the blue line is the 100MA). This week's price closed above the 50% level of the previous year's high/low, so an end of year rally may be in the works.
The Dow (I use DIA as a proxy) also closed above the 50% level this week. Nasdaq (I use QQQQ as a proxy) has fared the best, with price crossing the 50% level in mid-July and rallying 10% to close solidly above the retracement zone (RZ) over the past few months.
Note - I don't trade any of the major indexes, I just look at them weekly because I like to know what is happening in the broader, bigger picture.
2nd note - as always, credit goes to TRADEthemove.com where I learned to frame price in this manner.
On to a longer-term trade I did make this year. GLD opened the year in the RZ, but below the 50% level. Price rallied above that mark in the 3rd week, and I watched for a pullback. At the end of February, price began to pullback and in mid to late-April it bounced off support at the 50% level (previous resistance becomes support). I entered on a break of the 04/12/09 week's high (black arrow), and held until price hit the Fiboancci extension (FE) two weeks ago. I actually added to my position on a trendline (black line) break at the end of August. My best trade of the year, with a 30%+ gain.
I hope everyone has had a great 2009, and I wish everyone all the best in 2010. I will try to make another post or two in December, but no promises.
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12 comments:
Nice to see you posting Tom, hope you decide to do it more often. I agree the indexes are poised to move higher. Nice trade, I had some gold stocks off and on this year and made money, but not like that.
Cheers.
Nice GLD trade. Do you always use trendlines?
So, if I understand, in January you will plot fibs over 2009. If we close strong this year, Jan will be trading at the high of that range. Does that indicate the liklihood for a pull back?
I noticed that in the past few years there was a discount for tradethemove at the end of the year if you mentioned this site. Does it apply this year as well?
Ronnie - no, not always. But I find that trendlines on a move from the RZ up or down usually work well.
Newb - it can go either way...I don't try to predict, just trade what I see. I think you could see price continue to rally to the new FE, it could pullback and if it bounces at the RZ, that bodes well for a continuation. Then again, it could completely fail and fall through the RZ!
Aaron - I don't know the answer to that. I suggest emailing Kernan at TRADEthemove.com.
*work well provided price has not reached the previous high/low yet, or broken the high/low and pulled back.
(add to my t/l comments above)
I made a little off GLD as well, but that was a nice ride!
If anyone is interested in the follow-up, I emailed Kernan and he will honor the end of year special as he did in the past. Mention TraderX and he will send you a $15 Amazon gift certificate after you purchase. Thanks Tom.
Good until the end of December, btw.
Trader-X, it was great to meet you. Please give me a call when you are back in January.
Just found the blog, very nice job.
A question though, a lot of your setups are triggered by gaps. Do you filter out those gaps caused by events such as post earnings, M&A etc.?
Anon - actually, the watchlist is comprised of only gaps. To answer your question, no - the reason for the gap isn't considered or filtered. A good setup is a good setup.
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