First October Trade

The following information is for educational and entertainment purposes only. Rio Verde Trading and the author make no claim that anyone can or will achieve similar results in their trading

IWM Setup of October 12 was confirmed on Friday October 13.

October 13: bought to open 70 IWM at 149.53, net $10,469.10.
October 16: Sell signal, sold to close 70 IWM at 149.39, net $10455.30.
Net Loss: $-13.80; ROI -0.5%.

The IWM sell signal was a false signal, I should have added 70 IWM as a continued buy signal. Therefore the morning of October 17 I bought 70 IWM as a continuation of the original trade. See comments below for a better explanation.

October 17: At the market open, bought to open 70 IWM at 189.22, net $10,446.46.
October 17: Buy signal at the close bought 70 IWM at 148.90, net $10,425.00.
October 18: Sell signal, sold to close 140 IWM at 149.52, net $ 20,930.40.
Net Profit: $59.34, ROI 2.25%

Net Profit From Combined Trades: $45.54, ROI 1.73%

Comments: This trade needs a little explanation. The buy and sell signals, as explained in the 74% Solution trading manual, are based on the closing price. Occasionally, as happened on this trade, the market was trading so close to the closing price that it was hard to determine if the close would be a sell signal or a buy signal. I thought I would get a sell signal so I sold 70 IWM to close. After the market closed for real and the dust settled, the actual close was a buy signal. It was too late, of course, to buy, so I entered the trade the next morning with the opening price. That day also signaled a buy at the close so I added another 70 IWM at the close.

My sell signal for October 16 was any price above 149.37; the market as it neared the close was oscillating around that key number. As the close approached with less than a minute to go, I thought I had a good sell signal and sold.   However later that evening when updating my charts, I found the official close at 149.24, a solid buy signal. So I entered the trade again the next morning at the open. From there every thing went more smoothly.

It is good to be back trading and extra nice that my first trade is profitable.

Back In Business

Since my last trade of March 28 I have been in a trading hiatus. This was because I felt there is an excellent potential profit opportunity in gold and silver mining stocks at this time, especially silver. Therefore I had committed all my  cash balance to precious metals mining stocks which left me with no cash balance that I would need to protect myself from potential losses from trading.

Yesterdays I was happily surprised to see one of my mining stocks up 24% in one day, NICE!. That more than doubled the value of the stock and allowed me to sell half of my position, recouping my entire investment in that stock. This now gives me a large enough cash balance so that I can resume trading the 74% Solution trading system.

While I have been out of the market since March 28, The 74% Solution trading system generated 25 trades, 23 winners and only 2 losers.

As of today IWM is setting up for a potential trade for tomorrow, if that trade is confirmed I am back in business again.

No Trades Since March?

In trading and investing it is always important to use assets in the most efficient way possible to maximizes returns. To that end I have become fully invested in gold and silver mining stocks. so much so that my cash balance is too low to allow me to trade my The 74% Solution trading strategy.  I do not have enough cash to cover potential losses, therefore I am not trading until I get my cash balance high enough to cover potential losses.

This is a temporary situation and I expect to be able to sell some of my gold and silver stocks for a profit and get my cash balance back to a level allowing me to resume my trading program.

In the meantime I continue to track and record all trades generated by the The 74% Solution trading system. Since March the system has generated 13 trades with one losing trade and 12 wins. The system still works, just need to get my cash balance back to a level allowing me to continue trading.

Stupid Jokes and Killer Presidents

As I turned on the TV to watch the news this evening I was appalled at the news that another stupid actor made a stupid joke about killing Trump; this time it was Johnny Depp. But what is really appalling is the hypocrisy and hysteria now focusing on Johnny Depp.

Really what is worse making stupid jokes about killing the president or the president who is actually killing people? All these worthless presidents have blood on their hands; Trump, Obama, Clinton, Bush, Bush II, Nixon, Johnson… And the wannabe presidents Hillary and John McCain.

Of course they do not actually kill anybody themselves, except John McCain; they farm out their dirty work to the military, CIA and others.   It is worth noting that there is no record of Adolph Hitler personally killing anybody himself, but he Shure left a lot of dead bodies in his wake.

We need a lot more outrage over the people Trump is killing and less hysteria over stupid jokes. I can choose not to listen to the stupid jokes, I don’t have the option to stop the killing

Third March Trade

The following information is for educational and entertainment purposes only. Rio Verde Trading and the author make no claim that anyone can or will achieve similar results in their trading

SPY setup confirmed on Monday March 27.

March 27: Bought to open 20 SPY at 233.65, net $4,675.00.
March 28: Sell signal; sold to close 20 SPY at 234.90, net $4,696.00.
Net Profit $21.00, ROI 2.3%

Not a spectacular trade, but it does make me break even for the year.

 

Second March Trade

The following information is for educational and entertainment purposes only. Rio Verde Trading and the author make no claim that anyone can or will achieve similar results in their trading

SPY, the S&P 500 ETF, developed a potential trade setup on Friday March 17. The following Monday, March 20, confirmed the trade setup. This is that trade.

March 20: Bought to open 20 SPY at 236.78, net $4,737.60.
March 21: Bought 20 SPY at 233.97, net $4,681.40.
March 22: Sell signal, sold to close 40 SPY at 234.02, net $9,358.80.
Net Loss $-60.20, ROI -6.37%

Two losing trades in a row; and now I am down $21.85 loss for the year.

First March Trade

The following information is for educational and entertainment purposes only. Rio Verde Trading and the author make no claim that anyone can or will achieve similar results in their trading

IWM generated a trade setup on Friday March 3. Monday, March 6, market action confirmed the trade setup, resulting in the following trade in IWM.

March 6: Bought to open 30 IWM at 137.29, net $4,129.70.
March 7: Buy signal continues, bought 30 IWM at 136.69, net $4,102.70.
March 8: Buy signal continues, bought 30 IWM at 135.78, net $4,075.40.
March 9: Buy signal continues, bought 30 IWM at 135.27, net $4,060.10.
March 10: Sell signal, sold to close 120 IWM at 135.71, net $16,283.
Net Loss $-84.90, ROI -8.16%.

While I was fully committed to this IWM trade, MDY, SPY, and TLT also had trade setups confirmed.

These trades would have worked out as follows:

MDY: March, 9 buy signal at 310.02.
March 10, sell signal at 311.55,  profit per share 1.53.

SPY: March 8, buy signal at 236.56.
March 9, sell signal at 236.86, profit per share 0.3.

TLT: March 9, buy signal at 116.84.
March 10, sell signal at 117.25, profit per share 0.41.

Because I was already in the IWM trade I was not able to take the MDY,SPY or TLT trades.

It is always disappointing to take a loss, however I am still showing a trading profit for the year.

The ROI of -8.16% is a little distorted because I am trading with the smallest cash reserve that I have ever traded with. That makes the ROI much larger than normal.

The reason for the low cash reserve is that the gold and silver mining stocks have been experiencing a pretty good correction for the last couple of weeks. Lower stock prices means the stocks are on sale, time to buy, so I did, just couldn’t help myself. So low cash position, but this is only temporary and am working to rectify the situation. Having a low cash reserve makes trading a very nerve racking experience.

Because of the low cash position I also reduced the size of my trade, so this loss, though unpleasant. wasn’t serious.

This Friday the gold and silver stocks made a nice and welcome up move from there recent correction. Many of the stocks were up 4-7% and one up 9.86%. The loss on the IWM trade pails in comparison to the gold and silver profits.

The world economic situation still very uncertain and dangerous. The stock market is in a full blown bubble and ripe for a serious correction. Donald Trump is the proverbial wild card as the coming week the FED will raise rates and the US budget crisis begins in earnest.

How does that famous curse go? “May you live in interesting times” well this is it!

Have Your Cake and Eat It Too

This is an update of my Blog originally posted on February 15, 2015

Most TV commercials are just plain boring or worse, usually worse. Every now and then a commercial comes along that makes an impression. I usually don’t remember what they were selling, I just remember the commercial. In this recent commercial the father is repairing a lawn mower when his young daughter enters and asks why the father is not watching the football game. He offhand replies that “you can’t have your cake and eat it too”. Then the commercial continues, but at the end the girl makes a statement referring back to the beginning, saying “dad, if we have cake we should eat it”.

Yes indeed, if we have cake why not eat it? So how does this apply to our investments? If our investments could be thought of as the cake, then eating the cake could be looked at as enjoying income or profits from our investment.

Normally you enjoy income from your investments by receiving dividends or selling a stock at a profit. But there are other ways to “eat” or generate income from an investment portfolio. One way is selling or writing covered calls against an individual stock. A covered call strategy is very effective; in fact there are dozens of ETFs that are based on a covered call strategy, such as IRR and GGN, to name two. Most of these types of ETFs pay a healthy dividend in the 8-10% range, attesting to this strategy’s effectiveness.

The only trouble with implementing a covered call strategy, as an individual  investor, is that it takes a lot of time, experience and know how to do it successfully. You not only have to understand your  individual stock, you also have to understand the use of options. Options are a whole new ball game, covered call writing just adds another level of complexity. And if you don’t do it right your stock gets called away.

Never fear, there are other ways to eating cake, that is, generating income from your stock portfolio. I have been doing it successfully since 2002. My income producing strategy, is explained in my newly released eBook “The 74% Solution, Short Term Stock Index Trading With Exchange Traded Funds”.

Basically what I do is make short term trades of one to five days in  several stock index ETFs. Since most of my capital is invested in various stocks, I use margin  on the stock portfolio to make short term trades; always keeping a large enough cash balance to cover occasional losses. Overall the strategy is profitable with 74% of trades closing with a profit. In 2014 this strategy produced an income of $938 which more than doubled my dividend income of $411 from my stock holdings. To provide full disclosure this trading strategy produced a loss of $511 in 2015, no trading strategy is perfect; also none of my stocks were called away, even though I had a loss, I still owned all my stocks, including the ones paying dividends. However 2016 was again a good year, trading income of $646 and dividend income of $466, again more than doubling the dividend income.

This income producing strategy, unlike covered call writing, takes very little time to implement, and no expensive charting or option tracking software is needed.

Every evening, after the market closes and at my own convenience, I use a free stock charting service to track the several ETFs that I use. If a trade setup materializes, I plan a potential trade for the next day, using a clearly defined entry point and money management-position sizing rules. If the next day confirms the trade setup, it only takes ten to fifteen minutes to make the trade.

Easy pizzy lemon squezzy; low cost, low time requirement, low stress, high probability of profit equals extra income for your portfolio. Have your cake and eat it too.

Click on the ebook icon in the sidebar or go to “Products” page to obtain your copy of this amazing trading strategy “The 74% Solution”.

Third February Trade

The following information is for educational and entertainment purposes only. Rio Verde Trading and the author make no claim that anyone can or will achieve similar results in their trading.

A trade setup in IWM, the ETF which tracks the Russell 2000 futures contract, occurred Thursday February 23. Friday, the 24th, IWM market action confirmed the trade.

February 24: Bought to open 40 IWM at 138.66, net $5,548.40.
February 27: Sell signal, sold to close 40 IWM at 139.90, net $5,594.00.
Net Profit $45.60, ROI 2.55%.

2017 is starting out to be a good year. The market volatility is what makes the difference and I expect this volatility to continue. I am still anticipating the real possibility of a serious market correction. See the many articles I link to on the Home Page by Faber, Greyerz, Cashin, Leeb, Stockman and many others, all predicting a serious market correction. As Doug Casey would say, just because something is inevitable does not mean it is imminent.

So I continue trading, keeping the size of my trades small so that a serious loss will not hurt too much. I am also short the S&P 500 and heavily invested in gold and silver mining stocks, which are out performing everything.

It is also encouraging to remember that The 74% Solution trading system performs best in bear markets. It is an excellent contrarian trading strategy, so bring on the Bear!

And The Oscar Goes Too…

This is a repeat of a blog originaly posted on September 21, 2015

All America waits with bated breath to learn of the next recipient of some worthless trophy commemorating  some dubious achievement.

Is it just me or is anyone else sick of these obscene award programs? Hardly a week goes buy without our being assaulted by an incestuous love fest particularly in the entertainment industry; get a room!

Then there is the red carpet arrival of the anointed ones. Along with the  buffoonish outfits worn by the ladies. They look ridiculous, who, in their right mind wears such crap, check this out. I read somewhere that women don’t dress to impress men so much as to impress, or more accurately intimidate other women. You can see that clearly at these events. What man thinks wearing these ridiculous dresses makes a women beautiful? None!

I predict some day there will be an award program celebrating the best award program. I, for one, will be doing something else, anything else.