May 25, 2017
Machinesaurer! by KaijuSamurai Look I did another stupid!
seen from United States
seen from China
seen from Germany
seen from United States
seen from United States
seen from China
seen from United States
seen from United States
seen from United States
seen from China
seen from United States
seen from Iraq
seen from Brunei
seen from Canada
seen from China
seen from T1
seen from United States
seen from Kenya
seen from United States
seen from Russia
Machinesaurer! by KaijuSamurai Look I did another stupid!
Death Cross and the great Machinesaurer in tokusatsu form. (x)
I Feel Better When I Dump Losers
Today I sold my losing position in SPDR Energy (XLE). And I felt great relief after. I had been looking for a “good” opportunity to close out my XLE position and finally just pulled the trigger today. So I figured I would use this as a self-teaching moment and reminder for all of us of that the real key to successful financial market trading and investing is: Sell your losers short and let your winners ride!
When folks ask me for one piece of trading or investing advice, I don’t wax existential on the merits of seasonality, behavioral finance, technical analysis or old-school fundamentals. I tell them the most important bit of wisdom I have picked up in my short 51-year existence is to go against human emotion, admit error and sell your losers. The flipside is to respect your accuracy and resist being greedy by taking quick profits.
We have generated the greatest gains and outperformance in our track record by letting winners ride. Of course we take some profits along the way by selling-half-on-a-double, using trailing stops, and other sound exit strategies; but our long term outperformance has been generated by letting our winners ride. They were all good stocks with solid fundamentals, strong technicals, picked up at the right time of the year.
That brings us to the matter at hand: Crude Oil. The downtrend this year has been a big story, capped off by today’s big drop. Seasonally, the past six months has been an historically bullish period for crude and the stocks of the companies in the sector, but not so much this year. When markets don’t perform well it is an indication that there are other forces at play that are trumping seasonality and when the seasonality ends those forces may have their say.
We have been in XLE since the seasonal bullish period for oil stocks began in December ahead of the bullish season for crude oil. As you can see from the chart below crude oil has seriously bucked the seasonal trend this year alone with the stocks as represented by the XLE following suit.
Much has been made recently of the death cross in April when crude’s 50-day moving average crossed below the 200-day. At that time we raised out stop on XLE to 65.97 corresponding to long term support. It was breached May 30 and today I finally dumped it out our trading account. I sold a couple of other losers today too. But thankfully, the winners we have let ride are still doing well. We will be getting more defensive as the worst four months of the year July-October are coming upon us.
How to Trade the Death Cross (Strategy Explained)
Death Cross trading strategy: statistics, facts and historical backtests.
The 50/200 moving average crossover is widely discussed, especially when markets get shaky. A Death Cross forms when the 50-day average moves below the 200-day. It is typically framed as bearish, but the data is more nuanced.
Backtests on the S&P 500 show a consistent pattern. Short term returns after a Death Cross tend to be weaker than average. Over longer periods, returns revert to the market’s normal upward drift. In practice, this means the signal can help on the defensive side, but it often exits positions too late and reenters too high.
A simple rule set of selling on a Death Cross and buying back on a Golden Cross produces returns close to buy and hold, but with lower drawdowns and less time in the market. The trade off is missed upside during strong recoveries, as seen in 2020.
Bottom line. The Death Cross is not a predictive edge on its own. It is a risk management tool. Useful for reducing drawdowns, less useful for maximizing returns.How to Trade the Death Cross: A Strategic Guide
I backtested Bitcoin’s Death Cross and analyzed what happens if you buy and hold 1, 5, 10, 15, or 20 days after the signal. See the ROI, dra
The S&P 500 and the Nasdaq-100 have just formed a death cross, a technical chart pattern that occurs when the index’s 50-day moving average falls below its 200-day moving average. This crossover is often interpreted by traders and analysts as a bearish signal, suggesting potential further downside or a weakening market trend. While not always a guarantee of prolonged losses, the death cross reflects growing short-term weakness and can trigger increased caution among investors. The simultaneous appearance of this pattern in both major indices adds weight to concerns about the overall market’s momentum.
Let's talk about a cross on Trump's economy and what it means....
Golden Cross and Death Cross: An In-Depth Analysis