Trades of the Week

Trades of the Week
Issued Saturday, May 1

BUY - GLD
Monday Open 115.91  Current  118.48  = +2.2%
ATM Calls up about 100%

BUY - TYP
Monday Open 7.24  Current 8.33 = +15%
ATM Calls up about 150%

BUY - NNVC

Monday Open 2.40  Current 2.19  -8.75%


This was in response to the following comment from the prior thread:

The only trend here is the theory that computers and charts can predict anything, so put blind faith in them.

The whole point of this trend following exercise is not to predict anything, but instead to identify and exploit current trends.  In the case of last Saturday, those trends were UP on GLD, UP in TYP (inverse 3X technology ETF, i.e. tech stocks in down trend) and UP in NNVC (still in uptrend on Daily and Weekly charts). 

From an email that I received today from a subscriber, in the heat of the turmoil:

Allan,
I just finished Ch. 4 of Michael Covel’s Trend Following book.  I know you have read this book, but I wanted to share something since it is fresh on my mind.  One of the takeaways I had from that chapter is that trend followers aren’t surprised by market anomalies or strong down/up turns because they are generally already on that side of the market before it happens.  He supported that claim with multiple examples of market downturns and showed how the trend follower would already be positioned on that side of the market due to other indications of an impending trend.

A