Volume Reversal Tutorial-Gold-July 25, 2106

From the desk of top market timer Mark Leibovit.

Leibovit Negative Volume Reversals in IAU, GDX, GDXJ - both on the daily and weekly charts triggered our long exit several days ago and now we're waiting for clear signs of a bottom, so stay tuned. It could be days or even weeks away, so we have to wait for the signals.

https://youtu.be/tofnq0GHfpo

Happy Trading.  

Sharpen Investing Skill through Quiz: Gold Miners have a message

From the desk of Sagar Nandi and Superior Profit:

One of the best ways of learning to invest profitably is to identify a robust system and then practice it till the signals for Entry and Exit become second nature. Our investors and traders alike use CUE Trading System. There are plenty of learning material on the system in Superior Profit Education Center. Videos. Books with chart illustrations. Blogs etc. Once one goes through such learning, what next?

There are several possibilities.

One might start trading with a paper money account. Practicing the learning to see if one is able to make money in such simulation account. If one is able to make money, it might be time to move on to a real money account. Probably starting slowly with small quantities and gradually increasing size as one becomes more experienced.

Whether one is novice or experienced, it is still necessary to remain alert. And keep the investing blueprint fresh in mind. For Superior Profit Investors, that blueprint would be the CUE Chart Signals and the CUE Guidelines for Trend Following Go With Flow, Trend Reversal Headwind and Bounce trades among others.

We, at Superior Profit, have started a novel and publicly accessible way to keep that blueprint fresh in a traders mind.

Using Quiz Playground.  Where we present regular stock market quizzes - in different markets / time frames / instruments / sectors / industries etc. And invite you - serious traders and investors to respond to them. Challenging a traders ability to make a decision on the "right edge of the chart" - not looking at past chart and make easy decisions where one "could have bought and made a lot of money". Right edge of the chart is always more challenging. And the quizzes will make us get used to that. And to investing profitably as a result of that.

You reap multiple benefits by taking the quizzes.

One benefit is to test oneself. To see for oneself how confident one is while answering the quiz. Whether one is able to follow the disciplined way or succumbing to temptation to hop on a trade prematurely Is one able to stand aside when the chart is not clear? Is one able to commit to a trade without second guessing when the signals are aligned?

Second benefit - once multiple traders start responding to the same quizzes - is to see how different traders approach the same situation on the chart. Invaluable learning may be grasped from that. And one might even fine tune one's own approach from that learning.

Thirdly, you might have another golden opportunity. To gather appreciative Thumbs Up from fellow traders worldwide who are also looking at the same quiz. Once sufficient Thumbs Up is collected by you, you might be even invited to join Superior Profit Graduates Club - where all traders share their investment ideas using CUE Trading System. This is an opportunity to join smart and disciplined traders from all over the world.

Needless to say, we encourage you to give Thumbs Up to a response that you like - that is if you find the response disciplined and detailed and accurate as per (say,) Superior Profit Investment Guidelines.

Note that it does not matter if the quiz is on a stock / market that you trade or not. The aim here is to sharpen trading skills that are applicable across stocks / markets. And you would learn something through the quizzes irrespective of what stock / market the quizzes are based on.

Finally, it is of course fun to take the quizzes. Sometimes to make mistake and laugh about it and make sure next time in quiz and in real investment we are more disciplined and more careful.

Gold Mining Industry Rank worsened - What would you do? This quiz was posted over the weekend on 17th July at Superior Profit Quiz Playground - aimed at sharpening skill on Sector/Industry as well as Stock Analysis. You may find the latest quizzes from home page. And you would find all past quizzes at Quiz Playground in Superior Profit Community.

The quiz on Gold Miners went like this (the actual quiz is accessible through this link):

"Here is the Superior Profit Industry Group Ranking of 158 groups ... (full list at http://www.superiorprofit.co/) showing Gold Mining is deteriorating fast for last 2 weeks. While other Metals and Mining groups are holding strong."

"What would you do with Gold Mining stocks?".

What is the right answer?

I would not like to give the answer here and ruin your fun answering the quiz in your own way. I rather would have you try the quiz (and indeed the other quizzes) in the Superior Profit Quiz Playground (also accessible from home page: http://www.superiorprofit.co/).

You might answer through the poll answer mechanism as well as "reply" to the quiz with detail explanation/CUE Charts etc. if you would like. 

Hint ... a note on Industry Ranking. While I would not answer the quiz directly, here is some useful note on how to use Sector or Industry Ranking.

Superior Profit Investors regularly look at Broad Market State through Market Internals. These are posted regularly in Superior Profit home page as well as in Broad Market forum. Superior Profit traders also look at Sector and Industry Analysis and Ranking which are posted at Superior Profit home page as well as in Sector & Industry Analysis forum.

The Industry Ranking mentioned in the quiz is part of that Market/Sector/Industry weekly review by our traders. By looking at the analysis/ranking at Superior Profit site.

Now - let us have a look at the Industry Ranking that was mentioned in the quiz.

It is clear that Nonferrous, Aluminium and Industrial Metals and Mining groups (marked by tag 1 in the snap) are performing very strongly since last 6 months and are continuing to do so. They mostly held to a rank of 10 or better in last 6 months period. Very good rank considering that the best possible rank is 1 and worst possible rank is 158. For last 2 weeks and for last 1 week, these three Industry Groups are holding on to the top 3 Ranks among all the 158 industry groups. Their strength is undeniable. And if one is holding Long position in a stock in those Industry groups, one might feel confident to let profit run (of course booking some profit when the time is right - using CUE Hop Off Template for example ...).

Now about Gold Mining group: Marked by tag 2 in the snapshot, Gold Mining started out strong. Ranking between 1 to 4 for most of last 6 months. But in last 2 weeks Gold Miners Rank fell to 55. That was a sharp decline relative to other industries. But it did not stop the decline there. In the week that just passed (ending on 15th July 2016), Gold Miners Rank fell to 136. That is continued sharp decline in ranking for 2 weeks in a row.

All that is clear from the Industry Group Ranking. And it only takes few moments to read that conclusion from the Ranking Table.

What is however not clear immediately is whether individual Gold Mining Stocks are falling? Or that they are still rising but rising slower than other Industry Groups' stocks.

To know that, one might look at some actual Gold Mining Stock charts through CUE At A Glance template.

Note: If you are trading in another country, you might look at some Gold mining stock traded in that country as well. Metals and Mining companies tend to follow a global trend.

Here is one such view on well known gold miner Goldcorp (GG) using CUE At A Glance template. Weekly chart using Backdrop template on the left and Daily chart using Hop On template on the right in the snapshot below.

Reading the chart above, a Superior Profit trader immediately recognizes that it is time to book profit in existing Long positions. As the chance of falling down outweighs that of going up through the Weekly Memory Resistance and breaking out of Daily Triangle pattern in short term.

That is, it might be wiser to book profit now - full or partial ... or at minimum to tighten Stop.

One might look at few other Gold Miners. Probably the conclusion would be similar or it might be different. We have to see from those individual charts.

As for Shorting, for Goldcorp at least, the time has not come yet. It need to fall below the Daily Memory Support and then give a Low Risk Entry opportunity. It would probably be a Go With Flow Trend Following Short opportunity that our traders could identify easily using Metastock CUE Explorers.

Seeing that the Gold Miners Rank fall down sharply will let our traders take the Short confidently when and if that signal  comes in coming days.

In this way, Superior Profit traders are alert about what is happening in Broad Market, Sector and Industry. And yet, wait patiently for an actual trade opportunity to come in a stock. They don't hurry into a trade just looking at the Broad Market/Sector/Industry performance.

One might say, Superior Profit traders are able to see the forest and also look at the trees at the same time.

I encourage you to keep taking the quizzes at Superior Profit home page (for now, you might have a go at all past quizzes are accessible from Quiz Playground)and sharpen your skill and also to help others sharpen their skills.

And have fun while doing it.

​Sagar.

METASTOCK LEIBOVIT VR TUTORIAL LOOKING AT SLV - SILVER ETF - JULY 8, 2016

From the desk of top market time Mark Leibovit

In this video we take a brief look at the Silver ETF - SLV - which is rallying in part in my opinion to both the financial and political upheaval that lies before us.  Leibovit Positive Volume Reversals have recently guided the way as seen in both the Daily and Weekly charts.

Speak to you soon and don't forget to tune in to Wall Street Raw radio on iTunes or at gcnlive.com.

https://youtu.be/vigoIVry64M

Sector Analysis to Identify Stock Trading Opportunity

From the office of Superior Profit and Sagar Nandi.

Since more than one year, S&P 500 has hardly moved. However, individual Stocks may be moving up and down significantly within the same period.

Sometimes large players may come out of one Sector (book profit) and enter new position in a then poor performing Sector. Such Sector Rotation, if identified timely may lead one to anticipate a Stock move and enter a position at the right time (or book profit just as the Sector of a Stock is starting to go out of favor).

One way to anticipate movement of a Stock or a group of Stocks is to look at broad Sectors. And rank the Sector's performance on a regular basis to see how and when a sector is changing from an under performer to out performer.

Where to find such Sector Analysis and Ranking?

Superior Profit Investors rely on the simple and robust Sector Analysis presented regularly on Superior Profit Home Page. This is based on the most reliable data - Thomson Reuters data. Which is available through XENITH.

As Sector is a Stepping Back view of the Market relative to looking at Stocks, it tend to me more useful to look at Sector Analysis on a Weekly basis instead of looking at it Daily. This is the same concept that Superior Profit investors use for Broad Market Internal Analysis. Such Broad Market Analysis is also posted in the Superior Profit Home Page on a Weekly basis.

What information may we gather from Sector Analysis today?  For that, let us look at the latest Sector Analysis and Ranking as presented in the Superior Profit Home Page as of 2nd July 2016. First, we will look at the Sector Charts.

We have plotted the ten major Thomson Reuters Sectors in the chart above as of 2nd July 2016 looking back one year.

We can readily see that Utility is the top performer (the top line in the line chart) - gaining by 20% in last one year. And Energy is the worst performer. Declining by 12% in last one year.  However, since around Feb, 2016, all the Sectors have gained. Including Energy.

What actionable information may a Superior Profit Investor gather from this chart? Several.

For example, one conclusion is that Bottom Catching opportunity for Long Term Investment in Utility Sector has passed long time ago. All major Utility Stocks may be already at Pendulum High in CUE Charts. This is not the optimal bottom catching time for a stock.

For Energy, the Bottom Catching Opportunity had passed in February, 2016. And indeed Superior Profit Investors had traded Energy related instruments between Feb and now. Energy is still rising and there may be good opportunities there - to buy Stocks at relatively low price while they are starting to go up.

Also, if Utility reverses (it has not done so yet - more on this later in the Ranking table) - there may be an optimal point to book profit in any Open Position in Utility Stocks. And probably an Opportunity to Short those Stocks as well.

The chart above is useful to show the trend of the Sectors - however, it is not the easiest tool to choose a Sector for possible investment. Ranking table is an easier way.

Let us look at the Sector Ranking Table as of 2nd July (also from Superior Profit Home Page).

We have two tables here. One is the bottom table - Percentage Performance Table for last 1 Year, 6 Months, 3 Months, 1 Month and 5 Days (i.e. one Week).

How to use it? If a Sector is continuously out performing  for long time (like the Utility Sector - which is in last row in the table), we may look for when it is starting to under perform. And book profit at that time in existing Utility positions - or at least tighten Stop to protect profit (Superior Profit Investors use Protection signal in CUE Charts to do the same).

The Ranking Table on the top makes this task even easier. Rank 1 means best performer. Rank 10 means worst performer. Among the ten Sectors under consideration.

We can see from Ranking Table that for all the time periods, Utility is in Rank 1 or Rank 2. This shows that Utility had been strong and is still strong. If Utility was to fall back and its (say) Monthly Rank / Weekly Rank started to become worse, that is the time to close Utility Stocks (or to tighten Stop).

Most of the other Sectors are up - down. For example, Financials are down about 8% in last 1 Year and down about 3.6% in last 6 months. However, it is also up about 2.8% in last one week. Financials does not look strong as of this time. The Ranking Table makes the scenario clearer. Financials have been in Ranks 7 to 10 for all the periods under consideration. Clearly struggling to go up.

What about Energy? As we saw from the Sector chart earlier, it is the worst performer for last one year. However, Ranking table provides clearer and actionable information. It shows that for last 6 Months, 3 Months and 1 Month periods, Energy ranking had been top level - 1 or 2. That was the precise time to catch Bottom on Energy Stocks and Commodities.

What about now? Is there any stocks that we can try to drill down from the Sector Analysis?

Let us look at Healthcare Sector which includes Pharmaceuticals.

Healthcare is down about 5% in last 1 Year. And down only 0.5% in last 6 Months. However, since then, for last 3 Months,  1 Month and 1 Week, Healthcare has gained by 5.1%, 0.8% and 4% respectively. 

Ranking Table provides even easier to read information. For last 6 Moths Healthcare ranking was 8 out of 10. Pretty poor performance among the Sectors. However, since then, in last 3 Months, 1 Month and 1 Week, Healthcare ranking has been 3, 4 and 1 respectively.

Yes. In last 1 Week (as of 2nd July), Healthcare became Top Performer.

Superior Profit Investor would look for Bottom Fishing opportunities in Stocks at that time. Was there such opportunity? Yes. Indeed.

In the last four hours long marathon class on CUE Trading System that was conducted on 28th June, Amicus Therapeutics (FOLD.O) was identified to have a Headwind Long Swing Trade opportunity. This post in Superior Profit Traders Community explains that trade on FOLD.O. As can be seen, the Superior Profit Swing Traders would have already booked profit in that trade - at least partially. And put a Breakeven Stop on remaining position. To ensure it is almost a Risk Free Trade. In case you are interested, you may watch the video recording of the marathon session and other videos in the Superior Profit Education Center - Video page here. The marathon session videos are under the heading "Summary of All Key Aspects of Superior Profit Trading using CUE System".

Any other opportunity was there? Of course. And below chart (using Hop On Advanced Template of CUE Charts) of Celgene (CELG.O) explains the easy and quite profitable Long trade in Celgene.

Celgene is down about 12% in last one year (as of this post date that is after 6th July Close) whereas S&P500 Index was up about 1.5% in same period. Celgene was under performing broad market. Healthcare Sector was starting to move up the rank. And at same time using CUE Charts Superior Profit Investors could easily take a Long Trade as shown in the chart above - Long Trade using Exhaustion at Double Bottom and Fake Down Side Breakout plus Headwind Signal. The trade could be identified in minutes using CUE Sonar (Explorer in Metastock) on 28th June. The same day FOLD.O was identified in the marathon CUE Charts training session.

What about today - just before Market Open on 7th July as I am writing the post? You may look at Valeant (VRX). Below is the At A Glance view of Valeant.

VRX is down by a whopping 89% in last one year. That is the stock is at rock bottom. VRX had its fair share of issues as the stock declined that much.  It may still a large player in the Pharma group of stocks. There is inherent risk in such stocks. However, if one could catch such bottom and quickly book partial profit and leave the rest at Breakeven and then Trailing Stop, one might get a substantially profitable trade. The other positive is that if VRX drops from here, Stop would be narrow. Allowing one to exit the trade and cutting loss quickly.

The Valeant chart was also shared in Superior Profit Traders Community Forum for USA Market. And the latest posts are automatically reflected in Superior Profit Home Page.

Whatever is your decision on VRX, Long or Stand Aside (probably it is not at all advisable to Short the stock now as it is already so low - chance of Short was long long ago that could be easily captured using CUE Charts), the above analysis shows how Looking at Sector Performance Charts and Ranking helps a Superior Profit Investor to capture and even anticipate profitable Swing Trades and Long Term Investments.

You may like to bookmark the Superior Profit Home Page for such useful and actionable Sector Performance / Ranking as well as potential trade ideas as posted in Superior Profit Traders Community.

Sagar