Tuesday, November 25, 2014

The Relative Strength Factor

The Relative Strength Factor is a vital member of the trading strategy toolbox for many longer term investors.

It is used to measure performance of one instrument against a group of instruments and from that measurement an investor can quickly determine if he will do further work or look for another instrument to invest in.

ETF investors use this measure constantly as they are evaluating. Several sites on the internet have screeners available for their version of the Relative Strength Factor.

There is more than one way to develop a Relative Strength Factor, eg you can use the current stock price move against the related index value, or compare percentage change in the price versus percentage change of the index price.

There are a few places on the internet that offer screens related to the Relative Strength Factor'

  • Investors Business Daily for Stocks
  • ETFSCREEN for Etfs
  • Microsoft
  • ETFdb
  • TMXMoney
  • Morningstar

Here is an article regarding screening Wall Street Journal including a number of resources.

ETF Information Overload!

According to Dorsey Wright

'Relative strength strategies have a long history of delivering market-beating returns.'

ETF Chart of the Day, November 25, 2014

This ETF, Direxion Daily Healthcare Bull 3X ETF is showing considerable strength of late and probably deserves a close look.

Some information from the management of the fund, Direxion Investments:

Fund Symbol CURE
Daily Target 300%
Intra-day Indicative Value CURE.IV
Bloomberg Index Symbol IXV
CUSIP 25459Y876
ISIN US25459Y8764
Gross Expense Ratio 1.21%
Net Expense Ratio 0.95%*
Inception Date Jun 15, 2011


The Daily Healthcare Bull 3x Shares seeks daily investment results, before fees and expenses, of 300% of the performance of the S&P Health Care Select Sector Index. There is no guarantee the fund will meet its stated investment objective.
This leveraged ETF seeks a return that is 300% the return of its benchmark index for a single day. The fund should not be expected to provide three times the return of the benchmark’s cumulative return for periods greater than a day.

NAVs and market price information as of November 24, 2014

All data as of 10/31/2014
Ticker Fund Name 1 Mo % 3 Mo % YTD % 1 YR % 3 YR % 5 YR % 10 YR % Since Inception Inception Date Expense Ratio* (Gross/Net %)
CURE Daily Healthcare Bull 3x Shares NAV 14.81 32.62 71.99 100.25 96.12 71.22 1.21 / 0.95*
Market Close 14.92 32.69 71.80 99.16 94.06 71.21

From WallStreet Scope Nov 7

Direxion Daily Healthcare Bull 3X ETF (CURE) of the Financial sector (Exchange Traded Fund) lost -2.75%, a change from open of -3.5700% ($-3.23 per share) at the close of the normal trading day Friday with a volume of 95712 shares.  Direxion Daily Healthcare Bull 3X ETF (CURE) ended the day at $117.43 with a market cap of ,  insider ownership of , volume of  095,712 and a weekly performance of 2.84%. Direxion Daily Healthcare Bull 3X ETF (CURE)’S monthly performance stands at 13.27% and Direxion Daily Healthcare Bull 3X ETF (CURE) is considered a stock to watch for the upcoming trading day.

Here is a chart made after the close on Tuesday Nov 25, you can see that this stock has had a long advance and is still very strong.

In fact, the Relative Strength Factor for this ETF is 99.6

I want to draw your attention to the Point and Figure chart for this instrument, you will see a Bullish Price Objective of $215.00

This ETF is certainly deserving of a place in your watchlist and may well become a part of your trading strategy.

Good Trading..!

Some additional information on the Relative Strength Factor

Renko Trading Strategy

Renko Bars are not the most popular trading strategy but they are quite effective for filtering out the choppy periods and when used judiciously can be quite profitable.

As an example, I have two charts of EURUSD from this morning, one just prior to a sudden drop and one taken a few minutes after the drop. You can see how the chart worked well for me using the Awesome Oscillator for entry and the TSIOsc for exit. I also watch the TSIOSC for warning of a pending shift in trend.

Traders use different bar sizes for their Renko charts and that is a matter of preference. Some people like a 2 pip bar and others use up to 50 pips, depending on how often they want to trade and be at the screen watching charts.

Some trading platforms have a Renko chart built in as an indicator and many do not, meaning that a custom indicator has to be used. Sometimes in the case of a custom indicator there is quite a demand for machine resources which limits the number of charts that can be used .

There are custom indicators for both Metatrader4 and Metatrader5.

Renko trading is a great strategy in that a person can see clearly the entries and place stop losses that work well based on the size of the Renko bars on that particular chart.

I have not found any trailing stop expert advisers that will work on a Renko chart, they have to be attached to the regular chart for that currency pair.

Nor have I found a trade manager that will work on a Renko chart, again the trade manager has to be attached to a regular currency pair.

Those are a couple things that make trading with Renko bars a little awkward.

However, even with a couple negatives the Renko Trading Strategy can be enjoyable and profitable.

I will add one more chart, a 40 pip move that just occurred, actually the move was for a bit more than 40 pips.

Stock Scan Results by the Rambunctious Pig As At 8:15 am EST November 25, 2014

Todays Stock scans are more or less a comparison between the NYSE and the Nasdaq exchanges, they seem to move in harmony. I have done several comparisons as you will see below.

These results are for November 24 close.

I was surprised to see the similarity in the results.

Later I will add 56 Forex pairs to the mix as well as  a couple more stock scans.

Good Trading..!

Sunday, November 23, 2014

Have a Look at the 50 Moving Average Trading Strategy

The 50 moving average trading strategy can have some excellent points.

The 50 moving average can be used in combination with other moving averages such as the 200 or 100 or 20 to pinpoint moving average crossover entries and exits.

Another use for the 50 day moving average is to compare what may be happening between different groups of currencies.

For example, I have placed several charts on this page which show the relationship of price to the 50 day moving average, you will see price reverting to the mean and crossing the average and approaching the average.

Notice that all of these prices are below the 50 moving average with the exception of the US Dollar.

As you can see, a review of the 50 Moving Average can give you a quick idea as to what is happening to many currency pairs with regard to the other and similar pair.

You will also notice that from time to time there are some good price moves signaled by the 50 moving average.

Have a great week ahead..!

Magic Bands Scalp Trading Strategy as at November 23, 2014

The Magic Bands Scalp trading strategy will do well again this week for trend traders who are patient enough to find a trending market.

The tip off to a trade entry for this system is the crossing of the 15 BB and the 50 BB.

Probably a trader will want to have several charts open so as to be able to be in the market as different  currency pairs are trending at different times throughout the trading day

I have three charts below from Friday past.

Entries are best in the Magic Bands scalp system when there is a slope to the trend lines, the Bollinger Bands.

Personally I do my best to avoid the choppy periods with no slope to the lines..... I have had terrible experiences trading in chop. lol

Good Trading..!

My Gold Trading Strategy as November 23, 2014

The new week is about to test our trading strategies. Governments will be making their moves, traders will be in and out of the market and who knows what is coming for Gold.

There are a lot of opinions, Gold is going to $5,000 and Gold is dropping to $800, I will post some opinions further down in this post.

First I will post a couple charts, Ichimoku Kinko Hiyo charts, reason being is, they have something to tell us about support and resistance.

Here is the daily chart of XAUUSD

It is easy to see that the is going to be resistance at the Ichimoku Cloud. It appears that the Cloud becomes narrower as days pass, maybe resistance to a price rise will lessen.

The weekly chart is next.

Once again we see the Ichimoku Cloud creating resistance although the Cloud is much thinner than on the daily chart.

Finally, the Monthly chart.

It took a couple months for price to break down through the Cloud and then finally support was broken. The November bar has a long wick, showing that the bulls are making progress....

As mentioned earlier in the post, I found some recent articles and opinions about Gold as follows:

Russia's Central Bank Buying Gold Isn't Quite What You Think It Is - Forbes

Sat, 22 Nov 2014 11:42:03 GMT
The Russian central bank has been buying more gold this year. This could be taken as some form of support for the price of gold, could be taken as simply the bank deciding that t ...

Read more ...

Swiss Central Bank Chief Warns on Impact of Gold Vote - Wall Street Journal
Sun, 23 Nov 2014 13:31:49 GMT

ZURICH—The head of the Swiss National Bank reiterated concerns that a popular vote on requiring the central bank to keep a fifth of its assets in gold would hi ...

Read more ...

Gold No Longer Slumbers - Barron's
 Sat, 22 Nov 2014 03:15:13 GMT

But after pummeling gold steadily lower from its peak around $1,900 an ounce in September 2011, he is showing signs that he could be done dumping on the metal, which hit a low of $1,131.85 an ounce this month. Gold-mini ...

Read more ...

Many are seeing the moves by China as bullish for the price of Gold.

Chinese rate cut pushes gold, silver to highs - Resource Investor
Sun, 23 Nov 2014 11:44:43 GMT

The rate reduction was the first since July 2012 as the Asian nation heads toward its slowest full-year expansion in almost a quarter century. Russia added to gold reserve ...

Read more ...

This infographic is really well done!

InfoGraphic on the Swiss Gold Referendum to take place on November 30th - CoinWeek

Sun, 23 Nov 2014 14:37:40 GMT

On November 30, Swiss nationals head to the polls on three separate issues: abolishing a flat tax on resident, non-working foreigners, an immigration cap, and a proposal o ...

Read more ...

Gold / Silver / Copper futures - weekly outlook: November 24 - 28 - Investing.com
Sun, 23 Nov 2014 13:38:11 GMT

Despite Friday's upbeat performance, gold prices are likely to remain vulnerable in the near-term amid indications a strengthening U.S. economic recovery will force the Fed ...

Read more ...

Good Trading in the week ahead...!