Week 16 Commodities Trending and Performance
When should I get out of a trade that was made based on my trending and it worked, but is not working anymore? The answer, one would think, is simple. I should get out the moment that the trend reverses. While my entry point for a trend confirmation is solid, the exit point is a bit nebulous. I am talking about GLD and GDX now. The price movement has been week for couple of weeks. But the core trending is somewhat intact although weak. It is a hard decision to be made and I have to make it next week.
Trending Heat Map
A lot of changes in the trending and mostly to the downside. The metals (XME, DBB) look especially weak. The precious metals (GLD, GDX, SLV, GDXJ) also lost some ground.
On the positive side US Natural Gas UNG turned short-term bullish, and the US Dollar showed a little strength.
Performance
So GLD is up close to +20% just in this year, which is a huge move. I have traded it often this year and generated profits. So, I cannot complain. Still the question remains whether the run is over, or it is just taking a breather. For now, I am going to assume it is the latter and will continue to hold knowing fully well that I may be wrong and may need to change tack.
I did see the weakness in DBB early and tried to make a short trade. But the options did not have much liquidity and I gave up on it. I should have tried XME as that could be traded, I think.
UNG may turn out to be a good trade to the upside now that it has turned short-term bullish. But I am still jaded with a trade I tried to the long side couple of months earlier where I lost money. So, I will continue to wait and watch for a little while longer.