morpheustrading
Active member
- Messages
- 166
- Likes
- 3
One potential ETF trade setting up to explode in the near-term is $GLD, which has now formed a tight “bull flag” formation over the past four days. But rather than buying $GLD, we are targeting the leveraged Gold Double Long ETN ($DGP) for buy entry instead. As annotated on the chart below, our technical buy trigger for $DGP will be a breakout above the 4-day high:
Although leveraged ETFs like $DGP have a tendency to underperform the nonleveraged ETFs over longer holding periods, some of these ETFs are fine for trading shorter-term, momentum-driven trades, while providing the benefit of using less capital to achieve potential upside gains.
In addition to $DGP, we are now also targeting $JJG for “official” buy entry. Yesterday, it provided us with the slight pullback we were looking for and bounced perfectly off of support of its 20-day exponential moving average. As such, we are now looking for a buy entry above yesterday’s high, with a stop below the 20-day exponential moving average (plus some “wiggle room”). Subscribers should note our preset trade parameters in the ETF Watchlist of our newsletter. The technical swing trade setup in $JJG is shown below:
When we are doing our jobs by simply buying stocks and ETFs with solid bases of consolidation and relative strength, it frees us from the concern and worry of having to pay attention to how much the Dow moves up or down every day (unlike the talking heads of financial news networks who constantly dwell on the performance of the popular market indexes). For now, our objective, rule-based market timing model remains in buy mode, so we will continue to be positioned on the long side of the market, albeit with reduced share size. The beauty of commodity ETFs is their overall low correlation to the direction of the major indices.
Although leveraged ETFs like $DGP have a tendency to underperform the nonleveraged ETFs over longer holding periods, some of these ETFs are fine for trading shorter-term, momentum-driven trades, while providing the benefit of using less capital to achieve potential upside gains.
In addition to $DGP, we are now also targeting $JJG for “official” buy entry. Yesterday, it provided us with the slight pullback we were looking for and bounced perfectly off of support of its 20-day exponential moving average. As such, we are now looking for a buy entry above yesterday’s high, with a stop below the 20-day exponential moving average (plus some “wiggle room”). Subscribers should note our preset trade parameters in the ETF Watchlist of our newsletter. The technical swing trade setup in $JJG is shown below:
When we are doing our jobs by simply buying stocks and ETFs with solid bases of consolidation and relative strength, it frees us from the concern and worry of having to pay attention to how much the Dow moves up or down every day (unlike the talking heads of financial news networks who constantly dwell on the performance of the popular market indexes). For now, our objective, rule-based market timing model remains in buy mode, so we will continue to be positioned on the long side of the market, albeit with reduced share size. The beauty of commodity ETFs is their overall low correlation to the direction of the major indices.