Aspen Trading Technical Update

Featuring Dave Floyd

Dave Floyd returns for the June update from Aspen Trading, with the usual mix of Technical Analysis and chart based market forecasts. Find out how last month’s trades worked out and see what been trending on Dave’s screens, including a short related to sub prime auto loans and a new position on silver. Filmed on June 6, 2017.

Published on
8 June, 2017
Topic
Technical Analysis, Trading
Duration
18 minutes
Asset class
Bonds/Rates/Credit, Currencies, Equities
Rating
23

Comments

  • DF

    Dave F.

    14 6 2017 05:40

    0       1

    Hi Tim,

    Tough to know where funds will flow. Correlations are always in flux. But one would assume under a rising rate environment that they would flow towards gold.

  • TV

    Tim V.

    11 6 2017 04:52

    0       0

    Hey Dave, Per Matt D's comment below, long treasuries, I was curious and thinking the same. You mentioned that you see a bottoming in treasury yields coming soon, what are your thoughts on where money flows on equity weakness? Enjoy the vacay! Thank you for sharing your thoughts and positioning!

  • DF

    Dave F.

    10 6 2017 19:12

    1       0

    Hi Mark....yes, I should have said higher. How did I mess that up? Was the best trade of the bunch.....

  • DF

    Dave F.

    10 6 2017 19:11

    2       0

    Sam.....bravo.....I was wondering if anyone would notice that! We have 1 squirrel that descends on the yard each day....the kids have named him (assume its a boy, not really sure) Gary.

    I will see if Gary wants to make a cameo next time.

    Dave

  • SS

    Sam S.

    10 6 2017 13:10

    0       0

    Well done. Love the squirrel in the window too.

  • MN

    Mark N.

    10 6 2017 08:28

    0       0

    At 9:27, he said he was referring to a thrust lower out of the GLD triangle, is my assumption correct that he misspoke and meant higher?

  • DF

    Dave F.

    9 6 2017 14:28

    1       0

    Closed SPY Put Spread that was put on yesterday.

    Guess the market got too cheap at 2425 and the deep value players could not resist. (yes, oozing with sarcasm).

    Small loss, move to sidelines.

    Dave

  • DF

    Dave F.

    9 6 2017 13:52

    0       0

    Vladimir,

    No trading on vacation. I might have open positions but nothing new added or any time spent monitoring markets, even for a few minutes.

  • DF

    Dave F.

    9 6 2017 13:50

    0       0

    Thanks Vlad - I have seen them around here and there but do not know much about their platform. Keep us posted if you make the move.

  • VK

    Vladimir K.

    9 6 2017 13:22

    0       0

    Dave, thanks for great content. too bad we see that with significant delay :).
    But in any case, we can find great ideas to trade, ideas on how to execute trades and think about trading.
    Have a good vacation. BTW, do you manage trades on vacation. what is your policy on trading during vacation?

  • VK

    Vladimir K.

    9 6 2017 13:14

    0       0

    Dave, consider, switching from TOS to Tastyworks for lower commissions and same quality software. I am not solicited :).

  • DF

    Dave F.

    9 6 2017 04:47

    6       0

    Thanks Tshort,

    Just like RVTV carved out a niche that was sorely needed - i.e. REAL financial journalism not the cheer-leading you see on....well, you know the channels. It is also my responsibility to report back to YOU on what I advised on. That just seems like common sense, no?

    So, good or bad, my record is out there. Few others are doing that....I like being different, it gives me credibility....something in short supply among traders in the public's eye these days.

    Now RVTV just need to add a split screen for 6 traders to argue back and forth all the while NONE of them have any skin in the game or will be called out on their next appearance....kidding...

    Cheer!

  • DF

    Dave F.

    9 6 2017 04:42

    1       0

    Hi Forest,

    A couple of additions:

    - I meant to type SBUX not SBX
    - Here is why I limit my risk to 2% AUM on a per trade basis.....the draw-down table....math at its most scary

    www.aspentrading.com/trading-draw-downs-a-practical-overview/

  • MD

    Matt D.

    9 6 2017 02:55

    0       0

    Hey Dave, great trades last month! I was wondering what your reasons were for a bottom coming in treasury yields? You implied this could play out through to the end of the year. I know Raoul has a longer term view of yields dropping to around 0.5%. Would a move higher in yields in be a short term bounce? Looking at the long term channel, I would have thought there is greater potential for a drop in yields. I was thinking about getting long treasuries on a pullback but now you have me second guessing myself.

  • T~

    Tshort63 ~.

    9 6 2017 01:57

    1       0

    Thanks, Dave, I love this reflection format. Your insights help me better understand the trade lifecycle. Great baseball players seldom share their experience outside of teammates and a few close friends. Love to hear how you see the ball and adjust your swing or let the ball go by. (FX) Jumped into gold and miners in a big way early 2016 and am watching the round trip to almost even, I'll be relatively satisfied when gold settles above $1,325 for a week. When this illusion breaks I expect to see a face ripping rise. * crosses fingers*

  • T~

    Tshort63 ~.

    9 6 2017 01:57

    0       0

    Thanks, Dave, I love this reflection format. Your insights help me better understand the trade lifecycle. Great baseball players seldom share their experience outside of teammates and a few close friends. Love to hear how you see the ball and adjust your swing or let the ball go by. (FX) Jumped into gold and miners in a big way early 2016 and am watching the round trip to almost even, I'll be relatively satisfied when gold settles above $1,325 for a week. When this illusion breaks I expect to see a face ripping rise. * crosses fingers*

  • DF

    Dave F.

    8 6 2017 21:56

    0       0

    Ouch - that spike lower in GBP did not help my short EUR/GBP position that I have been wrestling with for over a week now....sigh.

    Let's see if we can get some sort of a reversal.

    As I said at the beginning of this video, FX markets are trading like crap in here.

  • DF

    Dave F.

    8 6 2017 21:30

    2       0

    Forest, thanks for the questions:

    1. I was bearish GM, I was long a Put Spread
    2. SBX - long stock
    3. Charting I believe can help ones timing thus offering a bit of an edge with options to hopefully avoid much of the time decay
    4. 1-2% on a per trade basis...anything greater you start to get into dicey waters with draw-downs

  • FC

    Forest C.

    8 6 2017 19:53

    2       0

    Great video Dave, appreciate the effort and insight!

    Some things I want to ask/ point out:
    1. Think around 5:46 should be "Put Spread" instead of "...Call Spread" for your GM trade
    2. How did you ended up playing your Starbucks trade? Through option or pure equities?
    3. Being a newbie in the option game myself, do you think your charting skills has somehow enable you better express your view through option for having a better time frame and expected target and exit?
    4. It seems that contributors on RV who trade actively do manage the risk aggressively, like Peter Brandt and Samuel Guren, in terms of AUM risked per trade - just wondering whats your number on it as well... Thanks!

  • DR

    David R.

    8 6 2017 19:51

    1       0

    Dave, greetings from singapore. You do a good presentation. One thing, I've actually found most dollar crosses to be very clean for months, on parallel trendlines. Do you do those? Not just elliot's simple TL but more like andrew pitchfork etc. That's helped me this year in FX. Check it out. Would post the charts if i could... (by the way, gold weekly broke the 6-year 2011 TL last week on the weekly, barely, and its back down retesting that TL today so pay attention folks to this week's close - looking good right now). But, my energy model for gold is weak so gold may rise but it'll disappoint again unless it can accelerate off this retracement. If oil collapses like I expect and stocks stay strong that'll hamper gold too, just sayin. And I think you're back on track on EURUSD, as in my book you suggested 2 good trade setups for eurusd (retest & reload). Good luck!

  • JC

    John C.

    8 6 2017 18:42

    0       0

    Thanks again for these Dave - always great to watch! Wondering just how bearish you are on the USD longer-term. Seems like the Euro sure has come a long way fast. Is it reasonable for me to be short-term dollar bullish, medium term bearish but longer-term (i.e. say year end) bullish?

  • DF

    Dave F.

    8 6 2017 16:01

    0       0

    Hi Thomas,

    I do not monitor gold and silver futures - trade GLD and SLV to express my directional bias.

    Also, rely more on technicals than the scenarios (which are un-knowable in my opinion) you outline to determine which way to trade.

    Hope that helps.

  • EH

    Eric H.

    8 6 2017 15:10

    1       0

    gdx looks shaky...descending triangle pattern on the daily chart and a symmetrical wedge on the weekly.

  • TS

    Thomas S.

    8 6 2017 14:35

    0       0

    Hi Dave. New sub here. Do you regularly monitor the front month SI and GC contracts? If so, how does one explain the recurring theme of massive instantaneous shorting and ongoing "commercial" net short positions far in excess of what one would normally expect relative to annual mine production?

  • DF

    Dave F.

    8 6 2017 14:06

    5       0

    Just closed GDX and GLD Call Spreads....long overdue USD correction seems likely...will re-establish spreads at a later time/date

  • DF

    Dave F.

    8 6 2017 13:35

    1       0

    Ahhhh....James, the musings of a VIX trader....a collective head scratching can be heard for miles.

    I assume you mean you are selling VIX puts to get exposure to a pick-up in vol?

    I have never traded the VIX in any form, but you are right, unless your timing is SPOT ON the time decay will kill you.

    Sam Gruen's video talks aboit a Dec 20/25 VIX Call spread...give that a listen www.realvision.com/channel/realvision/videos/9965f5f96526471e95f65041572d2fa8

    I am talking with him next week, will let you know if he has any additional thoughts.

  • DF

    Dave F.

    8 6 2017 13:30

    4       0

    Hey Matt....I prefer options simply from the capital deployment perspective. I trade all my accounts on a notional basis and keep most of my cash outside of brokerage accounts to not only get a bit more yield (Goldman Sachs Bank pays 1.05%) but also I feel better having not too much on deposit at Oanda and Think or Swim....where my trading accounts reside.

    Additionally I just like the way options are structured, a bit more of a puzzle to get the trade just right...I like that.

  • DF

    Dave F.

    8 6 2017 13:26

    1       0

    Hi Matt....those are some valid observations, and may very well prevent the trade from working. I am basing the trade however on quantitative data and some data mining extrapolation via the gents over at Nautilus Capital.

  • JM

    James M.

    8 6 2017 13:19

    1       0

    Thanks for another great video Dave. I have been buying vol via put options and to a lesser extent the VIX with longer dated calls. As your aware it aint working very well so far however I'm convinced vol is extremely cheap just now so I wanna stick with it. What do you think is the best way to buy vol other than vix call options which unless your timing is spot on never seems to play out very well due to daily rebalancing I think? Nancy Davis vid on this subject was excellent yesterday just wanted your opinion. I know your a TA expert and so would probably not agree with buying vol here but just wanted your optimal execution of such a trade. Thanks

  • MS

    Matt S.

    8 6 2017 13:18

    1       0

    Dave what makes you decide to trade an option rather than the underlying stock? Thanks.

  • MS

    Matt S.

    8 6 2017 13:06

    2       0

    XLV is at it's all time high, at the previous high made back in July 2015... it could break out but it could also form a double top? Isn't healthcare a big MESS right now?

  • DF

    Dave F.

    8 6 2017 13:06

    1       0

    As noted in the beginning of the video, I did end up closing the SPY Call Spread late in the day on June 6th. A nice trade BTW. I now have a SPY Put Spread on. This is a short-term play though, only looking out till June 23rd

  • DF

    Dave F.

    8 6 2017 12:50

    3       0

    GM Cesar and thanks for the question. I am sorry you wrote such a a lengthy question as my answer will be very brief: I have never had any luck (translation: no profitable trades overall) in USD/JPY. Thus I cannot offer you any insight worth a damn ;)

    Sorry about that.

  • CL

    César L.

    8 6 2017 12:14

    0       0

    Hi Dave! What do you think about usdjpy? Recently it moved faster to the downside which probably increases the odds of a small correction higher(together with the DXY). But the trend since December really seems to be lower. It has behaved as a risk-off/haven asset, the BOJ appears to be done with their easing program and if the state of the global economy deteriorates, the jpy probably will strengthen. Another aspect that I think is in place is that some EEM carry trades potentially will be unwound if there is some prolonged weakness(specially now that EEM has become such a crowded trade). More weakness in China may be the catalyst for that.

    I really like the the monthly updates and the technical analysis course is amazing(I keep revisiting some parts)! Thank you for sharing your insights!