Bought 200 LLL.TO @ 47.04, Stop 46.50

Market is tanking (Figure 1). Lots of pessimism in the news. Time for me to load on some growth stocks. I’m passing the goldminers in this move as the dollar seem to be rising from the dead and gold may be consolidating.

TSX, 12500 looks like a fine support, doesn't it?

Instead, I’m picking a growth stock, Lululemon (LLL.TO). Lululemon is holding well in this down move. Furthermore, the intraday test of support at 46.50 looks promising as there were few sellers at that price level. The recent break above long-term resistance at 48 is good too. So is the 19.6% short float… Anyway, you get the picture.

Lululemon (LLL.TO)

Risk is ($47.04 – $46.50) * 200 = $108 + $9.90 commission = $117.9 = 1.2% of account.

Update: Woodshedder’s post today explains his current view of the market, which happens to coincide with mine at this time.

Bought 300 VEN.TO @ 8.95, Stop 8.80

Update Oct 20: I raised my stop to 9.10 this moring. It got stopped out 2 minutes before the close for a small profit.

Following the covering of my short side play this morning, I sneaked back in to the gold bug camp. In particular, I bought some of my recent favourite gold miner, Ventana Gold Corp. (VEN.TO), a few minutes before the close.

Gold held on to the 1330 support as I’ve discussed this morning (see gold chart in this morning’s post). I also watched the closing 30 minutes of the market and VEN.TO respected its 8.90 support level too. See Figure 1. There was a brief touch below 8.90 but it pushed back up quickly (not shown).

This is a play inline with the direction of the recent rally. Just riding the trend. Nothing fancy.

Hard stop is $8.80. Mental stop is $8.88. Maximum risk is ($8.95 – $8.80) * 300 = $45 + $9.90 commission = $54.90 = 0.5% of account. There’s a risk of another gap down open tomorrow. So my position is small in case the market runs away overnight.

Ventana Gold Corp. (VEN.TO)

Paper trade: Closed all CADJPY long @ 88.40 for +152 pips

CAD/JPY reached my target of 88.00 last Friday. It broke through 88.00 nicely and tested 88.50 on Tokyo open just now. I decided to book my profit in the demo account on this CAD/JPY long position entered at 86.88 and 87.87. See Figure 1 for the 3-hour chart with the entries and exits marked.

Main reason for my cold feet is that there’s a lot of resistance on CAD/JPY above 88.50, all the way to 90.70, from the daily chart (not shown). I couldn’t tell if CAD/JPY will continue pushing upward or retrace. So I’m booking my profit now to observe the price action from the sideline. This position has turned out +40 pips more than I expected, so I’m trying not to be too greedy in this volatile time.

The net profit on this paper trade amounts to +0.3% of my demo account. The yellow triangle in Figure 1 shows my exit. I risked 0.1% on the initial entry (first blue triangle). Then added 70% more to the position above a weak resistance level (second blue triangle) and moved the stop on the initial size to breakeven.

CAD/JPY, 3-hour

Paper trade: Long CADJPY @ 86.88, Stop 86.10, Target 88.0

I entered CADJPY long at market for 86.88 just now. This is a continuation of my previous USDCAD short position. However, USDJPY is on a run upward so I’m switching to go long on the loonie with yen instead.

Figure 1 shows the daily chart of CADJPY. Notice the imminent MACD bullish crossover and the already in-play stochastic upturn. I like it.

My stop loss level is set at 86.10. It’s the high of a previous peak on February 3, two weeks ago. My target is the round number 88 resistance. 88.0 has been an important price level for CADJPY for the past few months. So I’m setting my sight there.

CADJPY, daily

Figure 2 shows my timing for this entry. CADJPY is noticeably meeting some resistance at 87.50. 87.50 is also the 61.8% Fibonacci level of a recent down move. This is a cause for concern on my long position as we could very well retrace here. However, the bullishness of CADJPY is apparent in Figure 2. Prices have consistently been bought for the past few days right on the short term moving average (teal line). Furthermore, the intermediate term moving average (orange line) is about to cross the long term moving average (red line) as I enter this position.

Lastly, gold price has taken a dive from 1130 to 1100. Meanwhile, crude oil price is holding the 77 support nicely. Thus, this confirm my previous view that oil has better upside than gold in the intermediate term. Which is why I’ve been trading the loonie these past weeks.

For this particular CADJPY trade, I have another buy order waiting above current support level to add to my long position. Let’s see if CADJPY can break decisively to the upside in the next 24 hours as US and Canadian data comes out.

CADJPY, 4-hour

Paper trade: GBPJPY @ 145.24, Stop 144.70, Target 148

Update: I’ve switched over to long EURJPY @ 125.40 as EURGBP’s downtrend seem to be running out of steam. Moreover, EURJPY looks better on the daily chart with a clear support and an oversold reading.

I’m back in my long GBPJPY play at 145.24. The currency pair is breaking an hourly resistance since consolidating around 145. I had a low ball offer at 144.20 since taking my profit last night at 146.42. But that bid for never filled. So I’m re-entering on a short-term breakout. For this entry, I am risking 0.1% of my account.

This re-entry is a tough decision. Almost all the respectable pros that I follow on Twitter are on the other side of this trade via other currency pairs. However, my long setup is valid as long as GBPJPY is above 144 level. So I’ll take this trade until proven otherwise. Although I must admit that my confidence in this trade is very low.

I also considered long CADJPY instead as it seems to offer more upside potential. However, as I’ve been following the GBPJPY pair this week, I’ll stick with my plan.

I also have a limit order to add more at 145.81 as you can see in Figure 1 below.

GBP/JPY, 3-hour