Update on recommendations

08 May

A couple of problems. Firstly, the pair of Sara Lee (SLE) v Archer Daniels Midland (ADM) had started off well but there was a big up day for ADM last week, moving it to a 2012 high against the S&P 500 Index.

I would cut this pair now but the SLE part remains an outperformer of the S&P 500 Index.

ADM v SPX

Secondly, the Research in Motion (RIMM) v NASDAQ 100 (NDX) made a new low and I have said on Twitter to stop this out.

RIMM v NDX

It may be that I have to introduce a formation break element to the RSI divergence trades, as in forming a higher high on a short term chart. That might make the RIMM trade one to come back to and this is the difference between it and the Agnico Eagle (AEM) v XAU trade, which now has a 27% gain! You should have taken at least some profit last week and now run it as you see fit.

Reviewing trades

As long as you review each trade, try to identify what was wrong and cut it out next time, you’ll make progress. I have spent a long time identifying the set ups that I have described. They are correct but they still may require fine tuning through some tighter rules.

Upcoming trades

The Coca-Cola Femsa (KOF) v iShares Mexico (EWW) set up continues to develop favourably. I’m looking for an end of week move beyond the Bollinger bands for a buy signal. With today’s move for the pair, that may come this week.

KOF v EWW

Natural Gas rallied from its bullish RSI divergence but none of the stock pairs I’m watching have set up correctly yet.