Tag Archive for 'TZA'

Trading some ETFs

Published on August 26, 2010, 9:33 pm in reading, Tools and Trading. Closed Tags: , , .

I like to daytrade the index ETFs….y’know, TNA/TZA BGU/BGZ SSO/SDS and a multitude of other bull/bear pairs. Depending on how the market is doing, I jump on either the bull or bear ETF and scalp it for as long as all day sometimes….and other times for 60 seconds….sometimes for a profit and other times for a loss. You know how it goes. 8O

As I was watching the grass grow at mid-day today, I was daydreaming at where I would be if I had bought some pairs at the beginning of the year. Logic would be that one side would be up and the other side down. But no!

On January 4th this year, TNA opened at $44.66 and closed today at $33.58, down about 12%. The Russell is down about 4% for the year, and since TNA is a 3X ETF, being off 12% is about right.

So TZA should be up about 12%, right? No! TZA opened the year at $47.05 and closed today at $39.06, down about 15% for the year. What!? The bear ETF is down more than the bull ETF? Yes. So if you had decided to put on some sort of spread bet taking both sides to hedge yourself, you’d be a real loser! :cry:

My lesson here is … not to hold leveraged ETFs for more than a day. Yes I have held overnight and have both profitted and lost on the gamble…. But now just daytrade or scalp….make more money and sleep a whole lot better.

Here’s an article that should be read by anyone trading leveraged ETFs. This study is based on 2X ETFs so the issues are greater in the 3X and 4X ETFs available now. The explanation is a lot more technical than what my daydreaming came up with. How Long Can You Hold Leveraged ETFs?

For all the periods studied except one-year, tracking error grows larger … and more negative … as the expected return grows.
The results of the study are clear. As you move further away from the targeted one-day time period, tracking error on these funds grows.

Chop continues

Published on July 28, 2010, 10:12 pm in Opinions and Trading. Closed Tags: , , , , .

The blades have to be getting dull on this chopper. All the indexes ended in the red, off anywhere from a quarter percent to one and a half percent. Volume was extremely low and Advance/decline volumes were barely down two to one.

But which way do we go now? I’m positioned on the long side, so I want the market to go long. Unfortunately, the market never does what I want it to do. So, play the charts. But I can’t tell from the charts. The only play I have is to tighten stops and maybe hedge a bit with TZA BGZ or maybe just S&P futures.

I’ll be listening in on the DRYS conference call on Thursday morning. Earnings came out after the close today and looked good. Now we need some good news…like an IPO or a sale. 8)

Thursday brings us the largest single day of earnings reports of the season. And let’s not forget our weekly headache of Initial Unemployment Claims. Something’s got to move in a confident direction, either up or down….soon, I hope. Good luck tomorrow!

Groundhog Day?

Published on June 17, 2010, 9:51 pm in Trading. Closed Tags: , , , , .

Today was just like yesterday! Yes, boring, but still showing confusion and consolidation, and again another doji. Candlesticks say we need a confirmation candle to tell us which way the market will go…but all we got was a “duh!” Which way do we go?

Oil got slapped around today, but considering that move from $69.50 to $78 in just 2 weeks, it too was due for some consolidation. Gold had a great day, breaking out through the May highs. The US dollar had a down day but may be looking for a move up. If it goes up the stock market goes crap. :cry:

I got a few coins out of TZA in the early morning, but then just stood still for the markets to do whatever they wanted to do. I’m still sitting long and cash….and the long part has a hairline trigger!

Quadruple-witching options expiration day on Friday! And no economic data reports nor any earnings reports may make for a dull opex. The action probably comes back next week.

So far, so good

Published on June 16, 2010, 11:37 pm in Opinions and Trading. Closed Tags: , , , , , .

I can’t ever remember the markets actually doing what I thought they would do! The S&P put in a doji day,as did the Dow, one red and one green. They both are still hanging above their respective 200 day moving averages. Considering the ugly news we had in the morning, bad housing, bad building permits and bad FDX guidance, you would think we would crash. But the markets persisted and came out a winner.

Oil had some bad news also with an inventory build, but oil shook it off and moved higher. My UCO position did well accordingly.

This rally has happened on decreasing volume, which by many accounts they say, is not a real rally. Technically all looks in place to keep on moving up…the break of the 200ma, bouncing off fibonacci retracement, MACDs moving up and all kinds of other indicators. But, and there’s always a but, the markets are very news oriented, and it doesn’t take much of a news blurb or even a rumor to send them tumbling down…again.

Was today enough rest? I don’t think so. I’m still looking for another breakeven to down day and again I’m not looking for much, just a little rest. So I’m mostly long with a bit of hedging via TZA. I’ll see how long I hold it.

See you in the trading arena!

Got Gold?

Published on May 12, 2010, 9:35 pm in Opinions and Trading. Closed Tags: , , , .

Wow, gold is on a rocket….but eventually the rocket fuel runs out. Have you noticed all the gold commercials on TV? On the business channels like CNBC, FBN and Bloomberg, they are trying to sell us coins and bullion. On “regular” channels they want to buy all our chains, bracelets, rings and teeth. So…do you think we’re in the middle of a gold bubble?

Y’know, the SEC could announce a circuit breaker rule soon, but why not instead reinstate the uptick rule and stop the naked shorts from manipulating the markets? But nooo, that would upset all the big boys on the playground…

DRYS and CSCO reported after hours. Neither had blowout reports and both are trading below today’s close, but not in the red…yet. CSCO could weigh on the QQQQ and Nasdaq and all the techs. Tech and banks have been leading the past couple days, so I’d like to see that continue.

We’re going to have to test the 200ma or at least get close to a recent low before we go to much higher, so I’m keeping a close watch on the inverse ETFs like: TZA BGZ TYP FAZ SDS. Play these on a short term and/or to protect some of your long positions.

Futures mildly unexciting this evening, hanging around where they closed, plus or minus a point or two. Initial claims on Thursday better continue to the upside. The slightest news, good or bad, could move this market in either direction. 8)

Fickled Fat-Finger of Fate

Published on May 7, 2010, 7:45 pm in Opinions. 1 Comment Tags: , , .

Why must someone or something be blamed for the market correction we are having? Is there something wrong with a correction? Sure, they got rid of the uptick rule a while ago, so we all knew that. And we already know that can speed up some downside moves. They were pretty stupid to get rid of the rule in the first place. But, I’ve been accumulating inverse ETFs, puts on the indexes and talking about it in the blog for some time now. So I’m a criminal now because I made money in the 10-minute crash of 2010? WTF? I warned you.

By now you have heard of the “fat-finger” error. I didn’t believe it the first time I heard it on CNBC. Then I started seeing it on “civilian” TV. First of all, who would put into production a software package that would allow such a mistake? C’mon programmers, tell me you don’t put in safeguards for human error….I want to make sure I don’t ever hire you. Finally today, we started seeing blogs and news agencies talk about that stupid excuse…“Fat finger” role in selloff likely a myth or this one, Fat Finger Error?

Today was a bit more worrisome than yesterday for me. I had cashed out all my short positions so I couldn’t really take advantage of the continuing down move. And, as I said yesterday, I was looking for a bounce today. The VIX made another big up move and this time, stayed above the 40 mark. OK, volatility is back!

I’ve also noticed that there are more and more references to the week before the ’87 crash (they must read my blog :-) ). I do think it will be this weekend’s news that governs Mondays market….will there be a resolution, a good resolution to the Greek tradgedy? Will there be a resolution to the U.K elections? Will they cap the oil spill? Or do we follow the 1987 history book?

We live in interesting times :!:

Be careful what you wish for…

Published on May 4, 2010, 10:59 pm in Opinions and Trading. Closed Tags: , .

Well, like a I said yesterday, “…a nice gap down may do me good.” It sure did! And it continued down. A wonderful day for TZA…finally.

I’m looking for more downside movement, maybe after some breath-catching. Did you see the Euro today? Wow, what a collapse. Gonna try to get up real early, like 3AM to watch the European open. Should be quite a show. Goodhart Says Greek Deal May Collapse as Crisis Tests Euro.

Ok, going to bed. 8O

Friendly Skies

Published on May 3, 2010, 10:30 pm in Trading. Closed Tags: , , , , .

The merger of UAUA and CAL really set the market into a takeoff. There was more good news as Greece had its umpteenth bailout and there was more construction spending than anticipated. And let’s not forget…we had this great up move on low volume.

On the other hand, this makes the Dow up 10 of the last twelve first trading days in May. And I can’t remember how many up Mondays….like 30 out of the last 38, or something like that. The only thing we need now is a wild Turnaround Tuesday. :roll:

My long positions doing well: DRYS and GTF….at breakeven: RNN…and not doing so well: ZANE. I also picked up some TZA at the close. Gee, a nice gap down may do me good.

Here’s a real good explanation of “It’s different this time…”
Thoughts On The Intermediate Trend by Matthew Claassen

While we desire never to be caught with those words leaving our lips, in truth every market cycle has something different than the previous. Equally important, each market cycle shares similarities to one or more past bull or bear markets.

And check out this Greece info: Why Greece Will Default.

I don’t think the Greeks can make it and for one good reason: the economy.

The word of the day – “shitty”

Published on April 27, 2010, 9:46 pm in Opinions and Trading. Closed Tags: , , , , .

The question was, “What are CDOs?” And Sen. Levin continued to use that word all afternoon talking about CDOs or the GS sales force or describing Goldman’s deals! As it turns out, Mr. ”Shitty” Levin doesn’t know a thing about what he’s asking! And here’s the best joke I saw today… from Lloyd_Blankfein: “The joke’s on Levin. I had my boys put the Senator Pension Plan in Portuguese bonds this morning.” heeheehee! :mrgreen:

Here’s how the market reacted to the GS grilling: Financials (-3.4%), Materials (-3.2%), Consumer Discretionary (-2.9%), Energy (-2.8%). Of course there was more to that than just GS…we had the downgrading of Greece and Portugal debt. I’m sure that was worth a few points.

Personally, I had one of the best days of the year. The short positions via TZA, QQQQ puts and TWM calls were all golden, but I spent most of the day playing the S&P emini to the short side. The best position would have been just to short in the morning and cover in the afternoon, but I was in and out 4 different transactions….but all to the good.

Tomorrow is Fed Day with the rate announcement coming at about 2PM EDT. Before that we have today’s continuation…maybe a gap down with a bounce? A lot will depend on if we have any more downgrades like Greece and Portugal today. Play ‘em like they’re dealt!

My takeway after watching hours of Senate grilling of GS on TV: Throw away all email servers!

Never write when you can speak, never speak when you can nod, never nod when you can wink.

What to do?

Published on April 25, 2010, 10:14 pm in Trading. Closed Tags: , , , .

Oh what to do? The market is way overbought, but price action keeps moving on up. Markets still making new highs and also 52-week new highs…except for the Naz, the index made a new high Friday but did not make new highs in the 52-week new highs….a slight divergence maybe?

I’m still sitting in mostly cash, but have now split my longs/shorts at 20%/30%. My longs are DRYS ZANE TBT. My shorts are via TZA, IWM puts and QQQQ puts.

Futures this evening are already frisky to the upside….just reflecting tha happy openings in Asia. The melt-up continues. Be long or be wrong! But be careful.