Tuesday, November 27, 2012

Rectangle Consolidation Pattern

















The market seems to be consolidating sideways in preparation for another bullish leg. When the market first topped on Friday, I was inclined to see a proper Fib retracement to test the trend average and perhaps the 200 DMA but so far it looks like another bullish wave needs to be in before a complete retrace. There seems to be a rectangle pattern in place and it seems close to completion so maybe we'll get a breakout in the next session or two. This pattern can fail (like any other obviously), so I'll be watching for key support at 1397 and resistance at 1409. I ended up closing my VXX position today out of frustration since it doesn't make sense to hold something that's out of synch with what I am tracking but perhaps I'll re-visit this trade should another bullish leg be put in.

Main S&P 500 Trends 

Short Term Trend = Bullish
Medium Term Trend = Bearish
Long Term Trend = Bullish

Long Term Portfolio

  • 100% Long in Red Chips traded in HSI (Mainland China stocks traded in Hong Kong).

Short Term Trading Strategy 
  • Bought 500 VXX @30.77 on 11/23/2012 - Closed @29..68 on 11/27/2012. = -1.09
  • Bought 500 VXX @31.54 on 11/20/2012 - Stopped out @31.11 on 11/21/2012. = -0.43
  • Closed position 500 @ 18.26 on 11/20/2012. Sold 500 @ 17.79, raised stop to break even on the other 500 as of 11/19/2012. Bought 1000 XIV @15.98 as of 11/15/2012 on margin - position trade cost improvement 4 cents, so net cost $15.94 as of 11/16/2012 - Profit = $2.05 
  • Bought 1000 XIV @16.88 as of 11/14/2012 on margin - Stopped out @ 16.66 on 11/14/2012. = -0.22
  • Bought 1000 XIV @15.67 as of 11/08/2012 on margin - sold 1000 XIV @ 16.25 on 11/12/2012 = +0.58
  • Margin positions in Gold initiated 11/06/2012.

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