jpcavin's Account Talk

[Uptrend]

Is NUGT really overbought?

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Not to hijack jpcavin's thread, but I was referring to the daily timeframe, not the weekly. IMO one should not trade any 3x leverged instrument on a weekly basis. On the daily, for NUGT the slow sto has declined from 87 2 days ago to 80 today. A buy would have been when the slow sto was below 20 12 sessions ago, and a sell by today, for about a 60% gain!

 

[MrJohnRoss]

Not to hijack jpcavin's thread, but I was referring to the daily timeframe, not the weekly. IMO one should not trade any 3x leverged instrument on a weekly basis. On the daily, for NUGT the slow sto has declined from 87 2 days ago to 80 today. A buy would have been when the slow sto was below 20 12 sessions ago, and a sell by today, for about a 60% gain!

Yes, that would have been a good trade, wouldn't it?

 

[jpcavin]

Not to hijack jpcavin's thread!

I enjoy seeing how different minds think. The advice, insight, and different points of view are always welcomed.

 

[MrJohnRoss]

Yes, my point in looking at the historical prices of NUGT, is that it had been much, much higher in the past. Downside risk seems to be relatively small compared to upside potential.

But if you're looking for a short term day trade, it's a whole different ballgame, and anything can happen.

Hope you get the chance to nail a perfect short term trade on it!

 

[jpcavin]

In my endless search for understanding of trading and trading indicators, I've came accross some interesting information that I want to share with you guys. Maybe some of you more experienced traders/investors have heard of this already but I never had until recently. Nor have I heard anyone else mention it on this board.

Most traders use the 14-period RSI but according to Larry Connors, "statistically, there is no edge using the 14-period RSI. The better way to use it is by shortening the period, especially to a 2-period RSI. Using a 2-period RSI, the, the lower the reading, the greater the performance. This means that traders should look to begin building strategies around stocks with a 2-period RSI readings below 10. A reading below 5 will give you a greated gain. A reading below 2 is even better. This strategy has correctly predicted the short-term direction of the S&P 500 83.6% of the time.

There are 4 rules to this strategy.
1. The S&P 500 Index is above its 200-day moving average.
2. The 2-period RSI of the S&P Index closes below 5.
3. Buy the S&P on the close.
4. Exit whent he S&P closes above its 5-period moving average.


Results from 1995-2007
Number of Signals: 49
Percent Correct: 83.6%
Total S&P Points Made: 522.92
Average Hold: Three Trading Days

Stocks, ETFs and other indices all show edges using this strategy. I've been observing a few instruments this last couple of weeks and it really seems to be right on the money. Using this index I would have taken a position in NUGT yesterday at $5.08 (RSI readign was below 1) and sold today at $5.79 or higher...As of this typing the RSI reading is above 71 and the price is 5.92.

Not bad huh? Of course, this is not the type of stock to invest in according to the rules, because it is below it's 200 day moving average. The reason Connors advices against it is because of the risk of investing in companies that are trading this low. He gives a few historical examples (Bear Stearns, Washington Mutual, United Airlines, Citigroup, Countrywide to name a few). I just like to live dangerously.

Anyway, hope this information pique's your interst. Happy trading!

 

[Birchtree]

Finally the 'Holy Grail' has come to TSP Talk - pun intended. I'm glad you are learning a lot of information.

 

[jpcavin]

Finally the 'Holy Grail' has come to TSP Talk - pun intended. I'm glad you are learning a lot of information.

Yes BT, this is known as the Holy Grail of indicators. Who needs an encyclopedia with you around? :laugh: Is there anything you haven't heard yet?

 

[Birchtree]

Hanesbrands (HBI) recently bought Maidenform and I'm now waiting for them to buy Fredricks of Hollywood - I've earned a nice gain in HBI so far.

 

[jpcavin]

Hanesbrands (HBI) recently bought Maidenform and I'm now waiting for them to buy Fredricks of Hollywood - I've earned a nice gain in HBI so far.

If you have that much affinity for lingerie, you should invest in LTD. I hear the Angels look heavenly.

 

[Birchtree]

I sold my position in LTD a few years back to help pay my taxes - I actually still own an odd lot so I get their annual report. Since you are a real estate investor would it be time for MTG (Magic) to rebound? It's a great time to be an investor.

 

[jpcavin]

I sold my position in LTD a few years back to help pay my taxes - I actually still own an odd lot so I get their annual report. Since you are a real estate investor would it be time for MTG (Magic) to rebound? It's a great time to be an investor.

You asking me? I'm sure you already had a theory before you even asked. The games people play!
I don't know anything about the real estate market or any other market for that matter :laugh: I'm just playing the markets for now because the odds are better than Vegas.

 

[jpcavin]

I'm loving AAPL right now!

 

[MrJohnRoss]

I'm loving AAPL right now!

You got that right!

 

[jpcavin]

You got that right!

I should probably sell it now though..:laugh: Everytime a stock spikes up, it drops just as hard. But then again, September is APPLs best month..isn't it?
I'm just a lowly investor. What to do, what to do...:nuts:

 

[EricDeLee]

Are you loving it more so than the $3 dividend per share!? Lol I was hoping this would stay down for a few more months... but should have known better.
perhaps I'll just dump money into Kellogg. LOL

 

[jpcavin]

Are you loving it more so than the $3 dividend per share!?

Absolutely!

 

[EricDeLee]

Absolutely!

4.8% increase for the day! Of course you love that!

 

[MrJohnRoss]

I should probably sell it now though..:laugh: Everytime a stock spikes up, it drops just as hard. But then again, September is APPLs best month..isn't it?
I'm just a lowly investor. What to do, what to do...:nuts:

If you sell now, you'll be kicking yourself later if it returns to the $688 level, and beyond. It's looking awfully strong right now, IMHO.

 

[GUCHI]

im holding apple long. theres talk about a new Iphone coming out in sept with fingerprint recognition. aapl needs a good catalyst to push it up again the new phone might bring it back.

 

[RealMoneyIssues]

jpcavin,

I really enjoyed our jabs at each other over the years. Too bad now that you are getting back on the forum, I am leaving. Enjoy the fair weather (I'll be in Tampa next week, again) in FL and keep those Sailors in line.

Congrats on your investing success, and Good luck to you in all things!!

-RMI