GUNNER24 Trade of the Day 10/13/2016
The 1:3 Trade: Sell US Crude Oil at 50.70
Dear GUNNER24 Traders,
The 1:3 Trade: Sell US Crude Oil at 50.70
Our 1:3 trades are A) adjusted to a longer term, having a spacious stop-loss for the development not to be endangered and B) have to show a risk-reward ratio of more than 1:3.
On 11th of February at 26.05$ US Crude Oil (WTI) found its year low at # 1 and started a strong uptrend. This first monthly uptrend cycle stalled after a textbook 21 Fib number advance in weekly time frame and a classic 5 month first initial up impulse at absolute year 2016 high on 06/09 at 51.67$. Then market corrected for the summer low, followed by next strong rally that pierced dominating yearly resistance 3 days ago:
The first 5 month up impulse defined future important Blue Arc resistance. Cause current year high defined Blue Arc, this threshold is resistance in yearly time frame. Of course Blue Arc is also a resistance in the monthly time frame. Blue Arc is precisely at 50.58$ for current month of October = # 9 of uptrend.
Crude shows visible reaction to the Blue Arc cause now below the yearly resistance arc. There is danger of important double top pattern in the monthly time frame.
==> October high is small lower high than current absolute 2016 high. 51.60$ vs. 51.67$.
October # 9-high nailed also a weekly resistance magnet and a natural lower line arc resistance, which is always important target for a market:
Current trading week is week # 36 of 2016 uptrend. Week is close to 34 Fib turn number. The week high has once again tested a Resistance Angle from below. We count now two-week highs in row at Resistance Angle. See light and dark red arrow for the tests. And as mentioned a few lines above the oil reached lower line of 2nd double arc at month high.
Week candle also shows reaction to that weekly resistance magnet cause candle has a relative long upper tail, which points to up exhaustion for now.
==> Crude Oil reached monthly + yearly + weekly resistance magnet at October highs and could have stalled. If true that pullback is underway obvious backtest target is the 1*1 Bull Market Support Angle that was tested positively several times during summer. See the green arrows for that tests.
Within setup above I emphasized a 47.22$ sell target = downtarget for the crude. Shortterm downtarget is located at the 1*1 Bull Market Angle for the trading week 05-09 of November... US Presidential Election is on 8th...
Elaboration of Sell-Limit and shortterm downtarget with help of daily time frame and the dominating daily GUNNER24 Up Setup
Do you remember this next chart?! On 08/09/2016 I´ve presented and analyzed that daily 5 Candle up the last time. Setup starts at the final low of 2016:
Then we wished to try a long at 41.40$ for a 50.00$ target cause the 4th resistance = former dominating arc resistance in the yearly was finally overcome. 50$ uptarget was expected to be worked off at end of setup according time.
See what has happened since in the daily time frame:
The likely very important 51.60$ month and week and small lower 2016 high accurately has arrived at end of GUNNER24 Setup according time factor. Crude began to decline once time support of setup has ended.
So setup above signals at least the start of a pullback/consolidation period/cycle in the daily time frame. Cause of double top danger and cause October high was made at combined weekly + monthly + yearly resistance magnet also a very deep retracement is possible. Maybe even the yearly trend has changed at October highs!
At first step, we should just expect a pullback/minor decline underway. Think the green dotted Daily Support is the most reliable target for the awaited pullback/daily down cycle. Interestingly the Daily Support is at 47.22$ for 8th of November, the US election date. Daily Support and 1*1 Bull Market Angle in the weekly time frame get married at 47.22$ shortterm downtarget on 11/08/2016.
==> Shortterm downtarget at 47.22$.
Most strongest daily resistance is obviously the red dotted 50.73$-GUNNER24 Horizontal. This horizontal resistance is more or less equal to the Blue Arc yearly and monthly main resistance for October 2016. Blue Arc main resistance is at 50.58$ for October.
==> We sell a possible and allowed next test of US Crude Oil (WTI) the daily horizontal resistance horizontal till Tuesday, 18th of October. Our 1:3-Sell-Short limit is placed at 50.70$!
==> Shortterm downtarget is usually strong 1*1 Bull Market Angle in the weekly time frame at 47.22$. Target additionally is at the daily uptrend support for 7th, 8th of November 2016.
==> Please place SL for the trade setup 1 Cent above October high at 51.61$.
Risk = 0.91$. Potential reward = 3.48$. Risk-reward ratio 0.91/3.48 or 1:3.82
Please use ETF, options, CFDs or warrants reproducing this trade. Sell when CLX6 Crude Oil (WTI) November 2016 contract trades at 50.70$!
GUNNER24 Trade of the Day order for 10/13/2016:
Market: US Crude Oil (WTI)
Orders: Sell-Limit at 50.70. Stop-Loss (SL) at 51.61. Sell-Limit order valid 10/18/2016. Shortterm downtarget at 47.22.
Market: McEwen Mining Inc. (MUX)
Orders: Buy-Limit at 2.75. No Stop-Loss(SL)!! Midterm uptarget is 6.00. Main Target is 9.00-10.00. Buy-Limit order is valid till 10/31/2016.
Market: Atwood Oceanics (ATW)
Orders: Buy-Limit at 8.80. Stop-Loss (SL) at 7.60. Shortterm uptarget is 12.80. Buy-Limit order valid till 10/21/2016.
Market: XES ETF
Orders: Buy-Limit at 19.05. Stop-Loss (SL) at 18.45. Shortterm uptarget is 21.60. Main target for 2017 is 30.00. Buy-Limit order valid till 10/21/2016.
Market: Skyworks Solutions Inc. (SWKS)
Orders: Buy-Limit at 76.65. Stop-Loss (SL) at 73.95. Shortterm uptarget is 81.00. Midterm uptarget is 86.00. Main target till April/May 2017 at 95.00. Buy-Limit order valid till 10/21/2016.
Long Torex Gold Inc. (TXG.TO) at 32.80 CAD$ since 09. September 2016. No Stop-Loss (SL)! Shortterm uptarget is 39.00 CAD$.
Long McEwen Mining Inc. (MUX) at 4.60$ since 19. August 2016. No Stop-Loss (SL)! Shortterm uptarget is 5.50$. Midterm uptarget is 6.00$. Main target is 7.40$.
Long SOYB Teucrium Soybean Fund at 18.60$ since 05. October 2016. Stop-Loss (SL) at 18.20$. Shortterm uptarget is 20.00$.
Long Diamond Offshore Drilling Inc. (DO) at 17.00$ since 04. October 2016. Stop-Loss (SL) at 16.00$. Shortterm uptarget is 20.50$.
Long Golden Star Resources Ltd. (GSS) at 0.81$ since 29. September 2016. Stop-Loss (SL) at 0.69$. Shortterm uptarget at 1.00$. Midterm uptarget is 1.35$.
Long Ivanhoe Mines Ltd. (IVPAF) at 1.50$ since 08. September 2016. Stop-Loss (SL) at 1.34$. Shortterm uptarget at 2.00$.
Long The Joint Corp. (JYNT) at 2.65$ since 30. August 2016. Stop-Loss (SL) at 2.04$. Shortterm uptarget at 3.50$-3.70$. Midterm uptarget is 5.00$.
Long Valeant Pharmaceuticals International Inc. (VRX) at 27.78$ since 10. August 2016. Stop-Loss (SL) at 19.80$. Midterm uptarget is 60.00$. Shortterm uptarget is 38.00$.
Long Abraxas Petroleum Corp. (AXAS) at 1.20$ since 13. July 2016. Stop-Loss (SL) at 1.10$. Shortterm uptarget at 1.50$.
Long Global X Lithium ETF (LIT) at 23.40$ since 27. June 2016. Stop-Loss (SL) at 21.90$. Shortterm uptarget at 28.00$.
Long iPath Dow Jones-UBS Coffee Subindex Total ReturnService Mark ETN (JO) at 21.00$ since 09. June 2016. Stop-Loss (SL) at 19.20$. First target at 25.00-26.00$. Midterm uptarget is 29.80$.
Long PureFunds ISE Junior Silver ETF (SILJ) at 9.98$ since 14. April 2016. Stop-Loss (SL) at 8.98$. Shortterm uptarget is 13.13$.
Short S&P 500 Index at 1880 since 14. January 2016. No Stop-Loss (SL). Shortterm downtarget at 1740.
Long Market Vectors Junior Gold Miners ETF (GDXJ) at 43.09$ since 09. July 2014. No Stop-Loss (SL). Longterm Buy-Target in 2016 is 60.50$.
Long GLOBAL X Silver MINERS ETF (SIL) at 13.79$ since 18. March 2014. No Stop-Loss (SL). Shortterm target is 15.48$. Main targets 17.42$ and 20.00$.
Short S&P 500 Index at 1820 since 11. February 2014. No Stop-Loss (SL). Shortterm downtarget at 1740.
Markets, Money Management and Trade Size
I will merely analyze the market. There are so many instruments in the world outside our GUNNNER24 Traders use to trade, and hundreds of popular ones among them, often depending on a trader’s time horizons... I don’t consider me able to adjust the market recommendations to all the popular ETFs, different CFD or futures contracts. All I’ll analyze is pure market action - the index, stock or most current contract and forex!
The trade size you should use depends.
A) On your account size:
I usually follow the rule of thumb which says, never bet more than 1% of your account size for each trade. So I avoid overtrading...
Let’s say you have got a 30.000US$ account granting you a nominal buying power of 300.000US$ up to 500.000USUS$ and even more, depending on your broker and instrument. In that case your trade size shouldn’t be more than 3.000US$-5.000US$ taking into account your buying power.
Another - more conservative - method is taking into account the available margin. Usually, 30.000US$ account value equals 30.000US$ available for margin trading. So the trade size is 300US$ taking into account the margin.
Within Trade of the Day I ask you not to bet more than this 1% per any trade.
The other point to consider for determining the trade size is:
B) if your trading style is rather active, supposing you regularly have 30-50 open trades, just as I have - CFD/ETF, here some stocks, there a future contract. So I often trade risky somehow, but I split the money/bets. Even in such a nice trend as the stocks are showing currently, I never ever trade too risky. I never load the boat with 70% let 90% of my account size. 50% is the maximum.
I trade for my living and for my kids and wife as well. A regular income is important. The big-bang bet isn’t! The market would win such a big-bang bet for sure!!
When I have a lot of open trades, maybe up to this 50% of my account size/available margin I avoid trading more. So if you are an active trader having a lot of trades running at rev limiter (50% account size) please avoid trading even though we/I give you some fresh recommendations, because this would rise YOUR risk!... During the test phase that happened frequently. We had 3-5 open trades sometimes and that’s why it’s elementary important that we/you have to use tight SL. Order management is absolutely crucial for Trade of the Day.
You’ll have to place really each and every order accordingly, you know. Forgetting only one time the SL would make this trade getting worse and worse…
Based on the George Douglas Taylor Trading Technique that I’ve been studied and originally traded for years transferring it onto the modern markets by constant observation a five day pattern of the single days of the week has resulted.
The crux is not so much that the entire week has to work perfectly. Perhaps it does just at a 50% because the day patterns may shift by one or two days. In the strong upwards trends sometimes you see 4 buy days and only 1 sell day. It’s important to recognize that the day proceeds ideally-typically and to trade accordingly.
My personal trading style has always been the contrary to that of the crowds because the crowds always loose. Especially in gold and silver trading I like to buy the corrections Monday to Wednesday and on Friday if the day patterns correspond with some important GUNNER24 Signals.
I use to go short intraday just on Thursday when the week high is sold off AND provided that the corresponding GUNNER24 Setups signal so covering the shorts when the cycle is resumed.
The ideal five day pattern in an upwards trend – precious metals and US stock market – Do use those patterns for your intraday and swing activities!
Monday: Buy day. Strong up-day. Low established first. It often ends at the day high. Unthinkingly you may buy all the intraday corrections because the week high comes later in the course of the week.
Tuesday: Buy day. Weaker up-day. A higher high is produced. As early as now the crowds ponder whether the prices mightn’t run too high partially going short already. For me it’s the day when I can cover my Friday and Monday longs. In intraday I try to go long in case of corrections until the Comex opening.
Wednesday: Sell day. Actually the day for covering the longs and for the first short entry. It’s got some different forms. It closes at the same level as it had opened. Frequently at first the high is established because more and more traders short the market. Here the longs fight against the shorts. You recognize that if many teeth, many nicks, many spike candles are to be seen in the chart. On Wednesday I use to do nothing. Only at a 20 to 30% the shorter hearts are pleased because during the whole day there’s only sell-off.
Thursday: The classical sell short day. Because the Wednesdays often close as they had opened the market participants have to cover their shorts because in the beginning the market runs quickly upwards…! And frequently they turn their positions into the high direction being caught on the wrong trail again. Then the market often lays down a beautiful sell-off. In the evening mostly a strong rally follows. That’s where we cover the shorts.
Friday: Classical buy day in the upwards trend. It’s nothing for weak hands. Here’s where you buy the positions near the Thursday lows which you cover again next Tuesday/Wednesday. If you discover that the prices have steadied or even are rising a little bit by closing the five day cycle should continue in the following week.
In the charts we work with the following symbols: