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I am an independent investor writing at Scott's Investments (http://www.scottsinvestments.com). My site is dedicated to discussing and publicly tracking historically successful investments strategies and sharing free investment resources. I emphasize empirical, historical, and quantitative... More
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Scott's Investments / Stock Loon LLC
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Scott's Investments
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  • GLD And SPY Signals

    The MarketClub ETF Portfolio/strategy created earlier this year has been quiet this summer as all four ETFs were on either a neutral or short (sell) signal. At its core, the service is a trend-following trading system. The strategy I created tracks MarketClub's Trade Triangle buy/sell signals on four ETFs - USO, SPY, FXE, and GLD. For background on the portfolio please see my initial article on the portfolio here.

    This portfolio should be looked at more as a collection of trades, rather than a comprehensive portfolio. The reason the "portfolio" has been so quiet this summer is the four ETFs tend to be highly correlated, so when one is on a signal, the other ETFs have a high probability of sharing the same signal. This is not a fault of the signals, but in my choice of ETFs. I may add some uncorrelated ETFs, such as TLT, in the near future in order to increase the number of signals and offer a better overall representation of potential applications of the signals.

    MarketClub is a sponsor of Scott's Investments, but these trades/tests are conducted in near real-time (I typically don't have time during the day to publish the trades, so I post them in the evening). My objective is to track and test, out-of-sample, the effectiveness of their trade signals.

    Two long trades have been signaled on GLD and SPY in the past week. A monthly trade triangle was triggered today (8/23) for GLD at 162.18. SPY had a monthly trade triangle signal last week (8/16) at 141.66. My blog update regarding the SPY signal is tardy, but I will track the portfolio using the 8/16 signal price.

    The MarketClub chart for GLD is below:

    The MarketClub chart for SPY is below:

    (click to enlarge)

    To track the historical performance and current trade performance click on the "Marketclub ETF Portfolio" on the right hand side of Scott's Investments.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: GLD, SPY
    Aug 24 11:45 AM | Link | Comment!
  • Gold & Apple Analysis

    It has been a volatile week in global markets and an update on gold is overdue. I last wrote about gold and its corresponding ETF, GLD, on May 4th. For several months I monitored the long-term channel in gold, which was broken in April. GLD did not break drastically below the channel, and depending on how precise the trend line was drawn you could argue it did not break below the channel until last week:

    You will notice in the chart above the words "neck" and "head" drawn. GLD had been setting up for a potential inverse head and shoulders pattern, but last week's sell-off violated this potential pattern. The next price target is the low from December 2011 which we came close to touching this week. After the $148 level, $140 appears to be a potential level of significant support. The $140 level also corresponds with the 38.2% retracement level.

    All of this does not imply that gold is doomed - these are simply key patterns and price levels to monitor. Gold could just as quickly reverse course, but a longer-term reversal would need to be confirmed by price action. A break-out above $174 and then obviously the all-time high around $186 would confirm an uptrend.

    To see some fibonacci analysis on Apple (AAPL) from April 18th, see my chart on Chart.ly here. AAPL is fast approaching the $510 price level, which corresponds with the 23.6% retracement level:

    Note on the chart above that the fibonacci price levels for AAPL all correspond with key levels of support and resistance. The points at which fibonacci and prior support/resistance align are important levels to watch as they may serve as potential levels of support/resistance in the future..

    I never offer predictions on this site, although I do my best to offer analysis. Technical analysis and charting is not for those who want to cling to an idea (or price target), because markets evolve, patterns fail, trends reverse, etc. Risk management is the most critical component of any investing plan. With all of that said (can you tell I am leery of being bombarded by emails from AAPL supporters?), if $510 support does not hold on AAPL, the next level of significant support is $425-$430. AAPL is still in a long-term uptrend but it is fast approaching some key price levels.

    The other interesting feature on AAPL's daily chart are the two gaps in January and February. The trading cliche is that gaps tend to fill (I have seen no statistical evidence to verify or refute this claim). The lower of the two gaps is just above the $427 price level, which again aligns with both the fibonacci retracement level and prior resistance (current support):

    For those interested or new to charting, I highly recommend Peter Brandt's blog - he wrote a nice piece yesterday, Chart Trading for Dummies.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Tags: AAPL, GLD, gold
    May 17 10:49 PM | Link | Comment!
  • The Dollar, Gold And Europe

    Chris Vermeulen has a new article on The Dollar and Manipulation Control the Market and JW Jones also posted a longer article, The Dollar and Gold Have Eyes on Europe. It is recommended reading for those eyeing equities, gold, or dollar-denominated investments.

    Tags: GLD, UUP, UDN, euro, dollar
    May 06 11:26 PM | Link | Comment!
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