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Trading Dow Jones ETF IYJ

Stock-Markets / Stock Index Trading Aug 30, 2009 - 09:49 PM GMT

By: Patrice_V_Johnson

Stock-Markets

Best Financial Markets Analysis ArticleWelcome to The J.E.D.I. Way.

LONG-TERM TREND (> 1YR) OF THE MARKETS: UP


This e-mail is to alert you that The J.E.D.I. Way will cancel its previous market order to purchase 100 shares of iShares Dow Jones Industrial Average ETF (Ticker Symbol: IYJ) at the market.

After further analysis of IYJ, The J.E.D.I. Way believes that there will be a trade in the making in IYJ provided that one of the following SETUP(s) below have been satisfied:

SETUP 1: Prices on IYJ "close" at or above $48.60.

or

SETUP 2: Prices on IYJ "close" at or below $47.84.

If SETUP 1 is satisfied, The J.E.D.I. Way will go long 100 shares of IYJ at the market, if and only if prices close at or above $48.60 on higher volume than the previous day and the Slow Stochastic has turned up from oversold levels (between 0 to 20) and the RSI is above 50.

NOTE: If filled, we will place a protective sell stop behind our long position at $48.08. This should limit our loss on this trade to $52.00 before commissions (assuming we receive a fill at $48.60).

If SETUP 2 is satisfied, instead, The J.E.D.I. Way will short 100 shares of IYJ at the market, if and only if prices close at or below $47.84 on higher volume than the previous day and the Slow Stochastic has turned down from over bought levels (between 100 and 80) and the RSI has either turned down or is trading below 50.

NOTE: If filled, we will place a protective buy stop behind our short position at $48.08. This should limit our loss on this trade to $24.00 before commissions (assuming we receive a fill at $47.84)

So, if our first setup is satisified , we will purchase 100 shares of IYJ at the market and follow up with a protective sell stop. But if our second setup is satisfied instead, we will short 100 shares of IYJ at the market and follow up with a protective buy stop.

And this would be in line with the old Korean Trading Principal which says "Don't lose money. If you do lose money, lose very little money."

Until Next Time.

Thanks for listening; Good Luck in your Trading; And May the force of volatility be us!

Best Regards,

Patrice V. Johnson

E-mail : Patrice@stockbarometer.com if you have any questions about this trade or any other questions or comments.

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Important Disclosure
Futures, Options, Mutual Fund, ETF and Equity trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in these markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy/sell Futures, Options, Mutual Funds or Equities. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this Web site. The past performance of any trading system or methodology is not necessarily indicative of future results.
Performance results are hypothetical. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under- or over-compensated for the impact, if any, of certain market factors, such as a lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown.
Investment Research Group and all individuals affiliated with Investment Research Group assume no responsibilities for your trading and investment results.
Investment Research Group (IRG), as a publisher of a financial newsletter of general and regular circulation, cannot tender individual investment advice. Only a registered broker or investment adviser may advise you individually on the suitability and performance of your portfolio or specific investments.
In making any investment decision, you will rely solely on your own review and examination of the fact and records relating to such investments. Past performance of our recommendations is not an indication of future performance. The publisher shall have no liability of whatever nature in respect of any claims, damages, loss, or expense arising out of or in connection with the reliance by you on the contents of our Web site, any promotion, published material, alert, or update.
For a complete understanding of the risks associated with trading, see our Risk Disclosure.

© 2009 Copyright Patrice V. Johnson - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


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