Gold Miners, GDX / NUGT

I mentioned NUGT / GDX a few times today, I believe the earliest was in this market update at 11:23 a.m.

" the possible Friday pin is a consideration so keeping an eye on the market in this area may yield some trades that may be worthy of consideration, I mentioned VXX /UXVY and the market averages, GDX and NUGT would be another 2, actually there are quite a few, but let me show you what I expected just as  a part of a reversal process (so this is more of a broad market concept) and what we specifically want to see as an edge for a trade (and that may not really emerge until the 2:30-3 p.m. hour as is often seen on Friday's."

NUGT ran +7.6% off today's lows, but still closed down -10.09% which would have been worse if not for the EOD run, probably around -19%.

NUGT's Intraday move. 

The typical tight/flat range we often see during accumulation or distribution was clear, usually I'd watch for a shakeout move below such a well-defined area of support.

This 60 min chart should give you some perspective on the probability/possibility of the overall move as this is a large leading positive divergence / base. I'd say the gap around $8.00 would be a reasonable target, however the market is usually not reasonable and often overshoots these price-pattern implied targets.

 This is a more detailed view of the same area with a 10-min chart.

Intraday, the 1 min

2 min and because this is such a beautiful chart, I thought I'd show it with no drawings on it.

NUGT 2 min

The 3 min hit a new leading positive high today, there was good overall migration through many timeframes so it looks like a very strong divergence and thus my willingness to take the position even after it had started an end of day run.

 The migration to the 10 min chart.

It's hard to believe, but migration occurred on the 15 min chart as well as the 60 min chart today alone, something bullish is going on in NUGT.

It looks like GLD and SLV are going to be seeing upside as well shortly.

XLK / XLF Option Positions P/L

I closed both of these earlier, I saw little point in keeping them open and would rather take a small loss now than have to deal with a larger loss or an option position I have to spend a lot of time in.

At the $.82 fill, the P/L was a loss of 7.8% (of position) the loss according to risk management (which is different for options) was closer to one half of one percent, about a quarter of the normal 2% rule.

The XLK position at a fill of $1.15 came to a P/L loss of -7.2% of position and about 1/4 of 1 percent for portfolio risk management, so the loss is VERY acceptable.

I'll be posting a few charts talked about toward the EOD.

Closing Market Update

Really despite price action, nothing in trends changed today at all.

Here are some example short/mid-term charts and the ES chain.

 IWM 2 min intraday distribution in to higher prices... ? Higher? They're more or less at or below the open except for the closing move above resistance, still no confirmation even at a 2 min chart, looks like selling all day in to the IWM.

IWM 60 min

QQQ 2 min intraday, again no confirmation.

 QQQ 15 min

SPY 3 min intraday/trend leading negative.

SPY 15 min.

ES intraday as I mentioned earlier needed to make a lower low, almost did earlier, it did near the close.

 ES 5 min still leading negative as it was this morning pre-market.

 ES 15 min leading negative so this should be a fairly sharp downside move.

ES 30 min is the same as this morning, it's where there's a transition between the negative and positive as it is in line.

ES 60 min strongly leading positive.

Essentially what the string of charts points to is the same thing expected starting with initial signals last Thursday.

Short term action today seemed like it was in a pin as the market stayed in the same area almost all day.

The 5 min is pointing to the move down represented by the 15 min Es chart, as starting soon as 5 min charts are leading negative.

Once we are through with the 15 min down trend, we have a much larger, more powerful up move that really started last week.

It's just typical market behavior, nothing moves in a line, there's too much money to make in making as many people wrong as possible.

In fact, very surprisingly to me... Our options tracking portfolio came in at

The rank out of 670 competing portfolios is 27, the monthly rank (as the month just started) is the exact same return and a rank of 26.

My point is this, early in the week I decided I wasn't going to be that active, in fact at first I didn't think any trading was worth the risk this week until we found 2 trades that looked decent, it was the +40% and +25% gains from those two (small) positions that put us in this rank.

So for hardly trading, not having any amazing triple digit gains and only 2 small trades, there were a lot of people standing in the place and were bull-dozed by the market this week.

NUGT Went With August $4

Opening a Long in NUGT

Even with the move, the signals are fantastic.

AAPL Update

This, for me anyway, is more of a "What to do with AAPL?"

I opened a 2/3rds full equity long in AAPL because I believe AAPL is starting a counter-trend rally, these are some of the strongest rallies you'll ever see (in a bear market, which AAPL is technically in). 

People often don't believe that a rally during a bear market can be stronger than a rally in a bull market, well look around at some and you'll see. The reasoning is simple, in a bear market rally the move HAS to be strong, no one will buy the move as their sentiment is already bearish unless the move seems to defy the laws of physics and make an incredibly strong move.

From there, Greed takes over (emotions), as in, "I already missed half of this move,".

The long equity AAPL position is a 4+% gain, but I'll be honest (and this is a great REASON TO KEEP THE KIND OF TRADE JOURNAL I ADVOCATE FOR) I tried to get  fancy and close a short in AAPL and just take the profits at the time up around $700 because I thought I could get back in at a better level. I probably could have, but one of those rare market events that isn't discounted occurred, specifically AAPL on Third Point's top 5 holdings one week and the next week gone, every hedge fund follows Dan Loeb's lead and they all tried to fit out the same door at the same time and AAPL saw a 45% drop.

 I'm trying to look at AAPL objectively, but if I'm honest, there's a chance that unconsciously there's a emotional trading scar over missing that move and I "could" be biassing my view toward not wanting to make the same mistake.

I say this is possible, not definite, this is just what happens with traders and that's why I advocate for a trading journal, you have to be honest with yourself.

In any case, I figure the most I have to lose is some near term drawdown, I don't think anything stops this AAPL counter trend rally, just as I said this week AAPL would outperform the market, it will continue to do so.

I have decided to hold AAPL long equity and I'll add to it to a full position on any pullback.

 15 min AAPL chart looks like a pullback is probable, but it is WAY stronger than most other assets.

30 min is leading positive, no damage at all so I think whatever "may" happen in AAPL, it is still making that upside move.

the 4 hour chart shows the size of the base in AAPL, it's huge so I'm guessing ...

(This is a positive 5-day chart) that AAPL moves at least to $the $550 area, with a properly position sized long equity position, I'm not worried about draw-down and I'm not worried about the trade failing, I'll wait AAPL out, it's not worth missing this move to try to get too fancy (that sounds a lot like the emotional scar from missing the last AAPL trade, but in looking at the charts, I don't see how AAPL can do much downside damage and the relative strength has been fantastic, if any stock can buck the market, it will be AAPL).

I would not start new longs here, I'd wait for the market to settle first and any possible pullback in AAPL.

Closing July XLF July $19 Call

I'm going to use this bit of momentum to close the XLF July $19 call, probably at a small loss, but when considering the 5/15 min Index futures charts, I don't see any reason to leave them open right now.

SLV Speculative Long Position- Aug. 2nd $19 Call

After looking at liquidity, this is what I came up with, I'd prefer some more time, but...

I already have some July $19 SLV and I hope they do better, but right now they are pretty far from breaking even, but the position size was small enough that I can add, rather I'll open a new position, again speculative in size because this is a speculative position, but it looks really interesting here.

If you like the idea, but don't like options or maybe just don't want that much leverage, you might consider AGQ long (2x long silver) or just SLV long.

Honestly, SLW (Silver Wheaton) as a long equity looks pretty darn good as well.

Here are a few charts.

 SLV 2 min, it's not just the divergence, it's the tight range that is getting tighter as we go. If I were really going to have very high standards and be willing to completely miss the opportunity, you could wait and look for a head fake move below the range since it is so defined. I don't have the time to watch 1 stock all day for the perfect entry when I'm trying to put together the details of a market transition.

SLV 10 min with a positive in June (remember that) a leading negative at the top, that's a very clear distribution signal, a head fake in yellow the day before the drop (this is what I mean about these head fake moves, they are so frequent, but notice it is proportionate to the timeframe, it's not an intraday head fake move on a 10 min chart. As I often say, the market is fractal in its behavior.

Note the recent positive and don't forget June

 SLV 15 min, looking at a bigger picture, this looks a lot more like a "W" bottom, implying a much larger and stronger base than what we've seen above thus far. That means (if it is indeed what I think), that this base could support 1 heck of an upside move and the July SLV calls would most likely not only break-even, but be at a nice gain.

 SLV 30 min leading positive, this makes an even stronger case for a larger base.

AGQ (2x long Silver) ETF and the tight intraday range, 1 min leading positive.

 5 min leading positive

10 min with two areas again

30 min leading positive also showing the same "W" bottom as SLV.

SLW as I said looks good too, I will look at the equity tracking portfolio and if I have a place, I may put SLW in there.

SLW 30 min leading positive divergence.

I like pure equity positions like this if I think there's a good chance for a trend, they can ride them out with a lot less draw-down which is nice for someone who doesn't have time to watch the market all the time or is more of a trend trade.

Risk management rules still must apply to take advantage of not using leverage to ride out the bumps and dips, it does no good if you but 30-40% of your portfolio in one stock like this as you will have drawdown even on normal moves that will be emotionally challenging to hold a position even when it is acting normally.

Closing the XLK $30 Calls

Probably at a slight loss

Going With VXX Aug. 19 Calls

I do like UVXY and have the long equity position there from Wednesday and will keep it as a longer term position, but I think we are at a decent area momentum, reversal, signal and confirmation-wise for an option position which in my case, I like VXX August $19 because UVXY doesn't have the liquidity out to August and I'd prefer a longer expiration than July now for new positions.

Here are some of the charts, as soon as I post them I'll open the Call Position.

 VXX 1 min, momentum in 3C is changing as I suspected. For me it's important with options positions to get in right before the trend changes as they are typically at their best discount in this case, as the underlying asset is still moving down.

Long / Calls in VXX is essentially like being short the SPY as far as market direction.

VXX 2 min-you can see there's migration, uit's early as I want, but it's there.

The 15 min VXX chart turned up as I was hoping, a new high would be great as well, but I think price turns before that happens.

 UVXY 2 min as confirmation of the momentum reversal, it will always start on the fastest charts first.

migration out to the 5 min chart

XIV is the exact opposite of VXX so for confirmation I'm looking for negative 3C signals. 2 min

5 min longer term negative and intraday.

the 15 min

And as far as size, the 30 min is negative so I like equity long VXX or UVXY also as I think this position will have some time, more than I'll probably be able to capture with options.

UVXY

To me it looks like (just from gut feel after having seen so many of these charts) that ES and the intraday SPY are losing 3C momentum.

I'm looking at some moves made in VXX/UVXY that are really predictable and some improvement, I'm not ready to pull the trigger on an options position, I have to look at the UVXY long (equity ) position and see if there's room there to add, if it makes sense, but what I will do is find the strike and expiration for a UVXY call and have them as well as the risk management/position size figured out in advance as we could move quickly from here.

On op-ex pins we tend to see the market move away from the pin and act as it wants to around 2:30 - 3 p.m. because most contracts are closed by that time so it wouldn't be surprising to start to see 3C intraday signals start changing right around now.

 SPY intraday 1 min starting to fall apart.

Notice I didn't draw the divergences on the chart, but rather the areas under it with red for negative and white for positive. I appreciate ALL the feedback I got about the new site (and even if I didn't write back, I read every one), so I'd like some feedback again. 

Are the charts easier to understand with me drawing in the divergences or just outlining the area like above?

ES 1 min, it basically needs to make a lower 3C low, the 5 min chart is just as negative as when posted earlier today.

The TICK could provide early warning, we'd need to see a move more volatile than the current channel, hopefully BEFORE it shows up in price.

 UVXY 2 min leading positive and as a new support range was formed intraday, it's not surprising at all that it was hit.

UVXY 15 min, this is still where I'd like to see a turn to the upside for a option (call) position, I would add to the UVXY long without that, as long as there's an obvious change from the pin to something uglier.

There is another potential support area that could be targeted for UVXY as we aren't far from it, just watch volume as these areas are hit, the object is to create supply / volume.

*As far as expiration for a call here, since this is a 15 min leading positive and longer, I'd go out to August if there's liquidity.