With BPENER above 95%, anyone else considering buying ERY here ?

On XLE, STO (14,3) is just about to cross below 80 but still early for a MACD cross.

BPENER, ERY, XLE

Atlantis

Nice, thanks for the info. 

Hi Matt, could you pose the link to that chart ? Thanks ! Been in GREK since last week and trailing my stops up. 

Yahoo article

Wonder when TVIX will follow suit. It closes at 1.92 yesterday...

Hi Matt,

Out of curiosity, when ERY crosses the wedge, what would be an objective target for the first bounce ?

Thanks !

Atlantis

Look at my post from last Sunday. Very volatile ETF but seems to behave better than TVIX although far from perfect. 

Some of the material below has been discussed before on the blog, however it's always nice to be reminded how playing these products is sometimes like playing at the casino. The articles below help understand what goes on behind the scenes.

I found this recent article last Friday that should serve as a risk reminder to anyone trading VIX ETNs:

http://seekingalpha.com/article/676731-tvix-surges-but-investors-should-stay-away?source=yahoo

You can find more information here about VXX and similar products such as TVIX (that lost 60% of its value in 2 days in March) and UVXY (-2x VIX from the article, seems to behave better than TVIX, note it lost 20% last Friday due to the -10% drop in the VIX).

This second link referred in the article above is of particular interest. For anyone who is tempted to buy such a product now thinking the VIX will spike in the next few months with everything going on in Europe, READ THIS. The degradation of these ETNs overtime is significant:

http://seekingalpha.com/article/267950-ipath-s-p-500-vix-short-term-futures-etn-swimming-against-the-currents

Here's a sample from this last link: 

"...Pretty clever. However, there's a big catch. When the VIX futures curve is upward sloping, meaning people expect volatility to be greater in 2 months than in 1 month and so forth, there's an ongoing premium that must be paid to continually sell front month contracts and replace them with second month contracts (which, themselves, become front month contracts in a few weeks' time). This situation of more distant futures costing more than near-term ones is referred to as contango and the buy-high-sell-low situation it creates is called roll yield. VXX mirrors exactly this strategy, as is clearly laid out in the prospectus.

Recent impact as of this writing, the VIX futures curve looks as shown below. All else being equal (i.e, no shifting of the curve), if you buy a June settlement contract today and hold it for a month, you can expect that it'll trade at a price similar to what the May contract is at today. In other words you'd buy at 19.55 and in a month it would be worth 17.95, a roll yield of about 8%, which is  analogous to paying an 8% monthly premium to maintain a front month portfolio."

Due to the "contango" effect, the author suggests to short VXX... 

You have been warned !

Great calendar, thanks for the link !

Hello everyone,

I found out a quick way to view 60 mins charts and lower timeframes even though you are not a stockcharts member. Just add to the hyperlink &cmd=print and you will be able to save and view any short term chart posted on the blog or in the newsletters. 

For example on the GDX 5 min chart Matt just posted:

GDX 5 mins stockcharts member

http://stockcharts.com/h-sc/ui?s=GDX&p=5&b=3&g=0&id=p18321575445&a=156967817&listNum=61

you end up with a daily chart if you are not a stockcharts member.

Try instead

GDX 5 mins non stockcharts member

http://stockcharts.com/h-sc/ui?s=GDX&p=5&b=3&g=0&id=p18321575445&a=156967817&listNum=61 &cmd=print

It doesn't auto refresh so just click on your refresh button to keep it up to date.

Very useful !!

Atlantis

MILL

My first recommendation on BPT ! :)  I found it this weekend while browsing on wallstreetwindow site (therefore, I won't take the credit for finding it yet). I like the pattern. You can get in with a tight stop at the 50 MA.

Atlantis

Hi everyone.

Last time GDXwent this low, it provided a good buy opportunity. It bounced off the lower trendline.

Will history repeat itself ? Matt, how to make sure this time we don't buy at support and see GDX go lower ? Go to 60 mins charts ?

Thanks,

Atlantis

Will there be one this week? Thanks!

TZA

Hi everyone,

TZA has been holding above 18.13 for 4 days now. Any comments ? Market indicators for intermediate term (if I look at SPX, Russel) have not turned to a sell signal yet however I am watching this one closely. At 18.88 now it would be at a tight stop.

Atlantis

Sold half, raised stops above entry point. Will keep the rest for tomorrow. Thanks guys, nice return in 4 days :)

Good call Matt. Took a shot last week and sold calls today with a nice % gain. Thanks !

You beat me on the posting. Thanks for pointing this one out a few days ago. I'm selling my calls by the end of today for a nice profit.

Hi Matt, thanks for the reply.

I read this article before and did google search on the subject. This part is of interest:  It's important to note that prices may exceed the top (or bottom) of the current brick. Again, new bricks are only added when prices completely "fill" the brick. For example, for a 5-point chart, if prices rise from 98 to 102, the hollow brick that goes from 95 to 100 is added to the chart BUT the hollow brick that goes from 100 to 105 is NOT DRAWN. The Renko chart will give the impression that prices stopped at 100.

In our case with a 0.6 box size and now a change of -1.80, I would expect to see at least 2 boxes to the downside (if not 3) but the chart still hasn't turned to the downside yet. And it's not a question of chart updating at night either. I've seen the same behavior before and the chart was the same the next morning. 

Just saw the reply from Tom. Makes sense. I will check for next time. Have a good week-end !

Hi Matt,

I think I am missing something with the renko charts. On the daily chart, with a box size of 0.6, and GDX down 1.76 as I type, shouldn't we see at least 2 bars down at this point ? What would happen if it exceeds 1.8, 3 bars... It's not the first time I see such behavior and I cannot explain it yet. Thanks for anyone who can clarify this one. I have read on renko charts but obviously not the right articles...

Thanks !

Atlantis

Hi everyone,

Could anyone explain why the Renko chart of GDX didn't change today. The comment on the chart masks the parameters but I think the block size is 0.6. In this case, I would have expected a red block to show up today (GDX down 1.11) but it is not the case. What makes the red down block appear on this chart ? This chart is frequently shown on BPT. Thanks !

http://stockcharts.com/h-sc/ui?s=GDX&p=D&yr=1&mn=4&dy=0&id=p62984766069&a=193397452&listNum=12