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First, we do not engage in Technical Analysis. We advocate for Chart Evaluation. Most might say that this is just semantics. Let us take a look at a definition of Analysis: "The separation of an intellectual or material whole into its constituent parts for individual study" or "the separating of any material or abstract entity into its constituent elements ". Analysis implies disassembling something.
Now let us look at the definition of Evaluation: "Evaluation is a systematic determination of the merit, worth and significance of a subject, using criteria governed by a set of standards" or "Careful valuation or appraisement". Edge Chart Evaluation uses overlays/indicators to perform a "systematic determination" of price change and the following overlay/indicator change to determine its "merit, worth, and significance" as a candidate for price movement that results in positive return on risk in well regulated financial markets.
____________________GLD Position Summary: opened 07.02.2021; closed 07.22.2021_________________
Charts 1-9 explain the charting methodology; Charts 10-12 explain the option strategy; Chart 13 contains trade management updates. The overall cashflow for the GLD July Ladder Rungs A.1-3 was $123; Total ROR = 123/157 = 78%. This position provided cashflow for each of the last 3 weeks with a maximum closing price change of ~ 2%.
When this Public Chartlist was posited on July 2nd 2021, we had no idea what the future held. We made daily decisions based on what price did each day. The option spread strategy that was employed lends itself well for weekly profits.
Please stay tune for our next example of "Right Now Trading" using "Edge Chart Evaluations".
Thanks to all that participated.
07.28.2021: established up-Move GLD July Ladder B.1-3; Total risk capital = $148
Today GLD closed above the upper edge of the Purple Cloud. This is a point of evaluation for establishing a position. Notice in the chart above that The lime Pro-Line is rising and is above the pink Non-Pro Line. Also, the blue Smoothed Close is rising and above the purple dashed line and the Smoothed Close is above the orange dashed line. Also, the Orange dashed line is flat. This is a setup for a continuation upMove.
The GLD July Ladder B.1-3 is built using the following:
Rung B.1: 1st Friday expiration, 168.5/169 spread, qty=2 [168 strike was not available], which expires this Friday, July 30th; risk = $47
Rung B.2: 2nd Friday expiration, 168/169 spread, qty = 1, which expires Friday, August 6th; risk $51
Rung B.3: 3rd Friday expiration, 168/169 spread, qty = 1, which expires Friday, August 13th; risk $50
07.29.2021: Rung B.1 hit limit order target, filled @ 0.475; Gain = $24/spread; total gain = $48; ROR = 48/47 = 102%;
Position risk reduced to $101.
Rung B.2 held, up 60%; Rung B.3 held, up 48%. B.2 & B.3 target limit order set @ 0.95.
07.28.2021: established up-Move MJ July Ladder A.1-3; Total risk capital = $147.5
Today MJ closed above the upper edge of the Purple Cloud. This is a point of evaluation for establishing a reversal position. Notice in the chart above that The lime Pro-Line is rising and is above the pink Non-Pro Line. Also, the blue Smoothed Close is rising and above the purple dashed line and that this reversal is anchored by a Orange Cloud lower edge violation.
The MJ July Ladder A.1-3 is built using the following:
Rung A.1: 1st Friday expiration, 18/19 spread, qty=1, which expires this Friday, July 30th; risk = $50
Rung A.2: 2nd Friday expiration, 18/19 spread, qty = 1, which expires Friday, August 6th; risk $47.5
Rung A.3: 3rd Friday expiration, 18/19 spread, qty = 1, which expires Friday, August 13th; risk $50
07.29.2021: No market action required; Hold positions.
07.02.2021: established up-Move GLD July Ladder A.1-3; Total risk capital = $157
07.06.2021: Hold; GLD up-Channel confirmed today as GLD closed higher than yesterday; up-Move with up-Channel in progress.
07.07.2021: Hold up-Move positions. Rung A.1 spread is up 39%; Rung A.2 is up 25%; Rung A.3 is up 15%. Trade plan is to hold each rung of the ladder until near the close on expiration Friday or a technical/sentimental/market exit is presented.
07.08.2021: Rung A.1 spread hit 0.95 limit order for a fill of 1.02 for a gain of $48/spread; ROR = 48/54 = 89%
Hold Rung A.2, spread is up 53%
Hold Rung A.3, spread is up 14%
07.09.2021: GLD closes above the 168 level. This position has already booked $48/spread when Rung A.1 filled its limit order on 07.08.2021
Hold Rung A.2, spread is up 85%; GTC limit order set at 0.95
Hold Rung A.3, spread is up 25%; GTC limit order set at 0.95
07.12.2021: at 10:31:40 AM GLD July Rung A.2 spread hit 0.95 limit order for a fill of 0.96 for a gain of $43/spread; ROR=43/53=81%
Hold Rung A.3, spread is up 23%; GTC limit order set at 0.95
07.13.2021: Hold Rung A.3, spread is up 28%; GTC limit order set at 0.95
07.14.2021: Hold Rung A.3, spread is up 67%; GTC limit order set at 0.95
07.15.2021: Hold Rung A.3, spread is up 75%: GTC limit order set at 0.95
07.16.2021: Hold Rung A.3, spread is up 43%; GTC limit order set at 0.95
GLD sentiment is > USO, SPY, QQQ, DIA, IWM; < TLT, UUP
This marks the second consecutive Friday that GLD has closed above our top strike at 168. Two rungs of this position have already provided cashflow. The last rung is now risk free, since the gains more than pays for the cost of this rung, which was $50. Gains so far are $48/spread for Rung A.1 & $43/spread for Rung A.1.
07.22.2021: GLD July Ladder Rung A.3 GTC limit order was exited @ 0.82 @ 3:51 pm for a profit of $32/spread; ROR = 32/50 = 60%.
The overall cashflow for the GLD July Ladder Rungs A.1-3 was $123; Total ROR = 123/157 = 78%.
The following charts will explain Right Now Cloud Trading, and provide an overview of how we evaluate charts.
This chart shows what GLD chart configuration looked like when we entered an up-Move position on July 2nd, 2021.
Close Only Line Chart
Smoothed Close Line Chart
Right Now Cloud Trading Chart with Smoothed Close and Orange Cloud.
Smoothed Close Line Chart with Orange & Purple Clouds
We evaluate charts that are based on the close only line chart. Above we see that on 07.02.2021 GLD formed and entry evaluation point [point A]. With our 2 cloud overlay, point A, is now distinguishable from points B & C.
Point A forms a "Purple Cloud" upper edge violations. Points B & C did not violate the "Purple Cloud" upper edge. It is also noted that Point C is not anchored by an "Orange Cloud" lower edge violation and therefore would not be considered a reversal entry evaluation point. If Point C had violated the "Purple Cloud" upper edge then it would have been a continuation entry evaluation point [continuation entry evaluation will be covered at a later time]. Point B on the other hand is anchored, but it did not rise above the "Purple Cloud".
Entering market positions at price points like Point A ensures that we are establishing low risk positions, since we are buying low on the "Price Curve". Point A also shows a market point where price volatility is low, which allows us to capitalize on rising volatility from this point.
Trading in the direction of the current market channel, up-Channel or down-Channel, ensures that "Right Now Cloud Traders" are trading in the highest probability direction. When we couple this with low risk & high probability option strategies, we develop great risk-adjusted returns.
The success of "Right Now Trading" is built upon risk management and money control. We acknowledge that financial markets carry risk, as well as, reward. We acknowledge that financial markets carry volatility, and that it is this volatile nature of markets that allow us to establish low risk, low volatility, high reward, high probability positions and to book profits regularly.
Please stay with us as we build our chart.
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