MISTAKE: DIDN'T STAY WITH THE TREND

Unless DAILY STOCHS start to turn, STAY with the trend.  DON'T WORRY.  There will be lots of opportunities to take profits.  A trend once in place is too strong to turn quickly.

MISTAKE - FOCUSED ON THE ST TIME FRAME!!!!

FOCUS ON DAILY AND WEEKLY CHARTS!!!  LOOK AT THE FRIGGIN TREND, MF.  LOOK AT THE DAILY STOCHS.  NO WAY RECOVERY, JOSE!!!

RE-SHORT SRS ON MONDAY! TZA looks cool!!!

Also really like TZA.  

Current fav. Bear ETFs:

1. TZA - Small Cap 3X

2. SRS - Real Estate 2X (could quadruple)

3. FAZ - Financial 3X

4. TWM - Russell 2000, 2X

5. ERY - energy 3X

6. EEV - Emerging Markets 2X (could go 4 times) 

7. AMZN Puts.

FOR EXTRA LEVERAGE GO SHORT INVERSE AND LONG ULTRA AT THE SAME TIME.

ETF List and Favorites

DXO - Double Long Crude Oil - very cheap.

DZZ - Double Short Gold

EFU and EEV - Emerging Markets Double Short

 

FAZ - could go up 400% from these levels $37 - 38

SRS - could go up 500% 

Complete list:

http://etf.stock-encyclopedia.com/category/leveraged-etfs.html

Mistake - Shorted Bank 2X ETF

Errors:

1. Greed?  Saying I'm not making as much as I could.  I only made this much.  I could make so much more.

2. Implemented trade even though TICK was flashing contradictory signals.  ALL INDICATORS NOT PRESENT.

When to cover?

1. If TICK and TRIN are in your favor, don't cover.

2. If you think you have made big profits, relative to the market, and you won't be around, cover.  Eg. Yesterday was a 40 point break, over two days in a market that up to that point had been rising.  That's enough.  The indicators were saying "this is enough for now."   WAIT.  Go outside.  Meditate.

Thursday EOD

Wow, getting hurt on my shorts.  

Very ST Indicators:

1. 5 min TICK is very high and above SPX.  (BULLISH).

2.  TRIN is going down and below 1. Bullish.

3.  Bonds are going down.  Bearish.

4. ST trend is still down.  May be a good time to go short - if we get a bump up tomorrow.

Conclusions:

0.  IF WE GAP UP, SHORT IT.  IF WE GAP DOWN, COVER YOUR SHORTS.

1. STOP out of short FAS. 22.30 if possible.  $40 - $100 loss. 

2. Go short (long FAZ) at day high.  Then forget about it.  Or set a 940 stop.

3. Look at DXO.  Consider SHORT at $3.25 - $3.3.

4. Or Buy FAZ at $35 - 36. (BEST.)

LT Thoughts

INDICATORS

1. AD Issues line looks very bullish.  5 DMA and 10 DMA was never this high in all 2008.

2. Bullish percent index is also above 2008 highs.

3. McLellan is at 2008-2009 highs.

4. Summation index is a straight shot up.  Wow.  

5. AD Volume looks very bullish.  5 DMA and 10 DMA broke 2008 highs.

6. Weekly Stochs on all indices are up.

7. Daily Stochs on all indices are now bearish.

8. 15 minute Stochs are bearish.  30 minute Stochs are mixed.,

9. Daily Tick is headed down and BELOW SP after a while.  (SELL.) 

10. Caution: 5-min Tick is above SP now; this is a very ST buy signal, if supported by other indicators.  Watch 5 -min Tick.  IT WILL TELL YOU WHEN TO COVER.

11. TRIN looks terrible.  (5 min and daily.) STAY SHORT until it turns.

12. TNX strength is a bit worrisome, but no biggie.  KEEP an eye on it.

CONCLUSIONS

1. Long term (6 months +) trend is down, but may be changing. Weekly Stochs are up.

2.  Mid-term trend (1 week+) is changing to down.  (as seen in daily chart.)

3. ST trend (1 day) is down.

4.  Watch TRIN.  Cover shorts when TRIN falls back.   At 880-95?  

Re short at 910 - 920, depending upon market strength (TICK AND TRIN, etc.).  

Short 50% at SPX 915 or so

Will double down at 925, out at 935.

If continues down, will double position at 910.

First target 890 or so.  I don't think we'll go far beyond 880 this time. 

LT the AD line looks very bullish.  5 DMA and 10 DMA was never this high in all of 2008.

Jan 7, 2009

Covered shorts at 914, waiting to short again.

Considering shorting at 920.

Retracement levels guy wants to go long, but everything tells me otherwise.

- Will is bearish.  Has already gone long triple short ETFs.  

Will says short the rallies.  We are not really rallied yet.

If I short now, at 917 - 920, we could get a rally.  Cover at 930?

Short at 917-920 with 50% of trade.  DD at 930.  Out at 935.  

ST Top

Short SP at 929.5 or so (or, actually, long SDS, at $65.90 and $66.37).

50 shares at average price of $66.51 (including commission).

Short SSO at SPX 932 or so. (SSO at $27.8 after commission.)

Stop out at 938.

Target SP 885?

Update - 12:40 p.m.  Market has surprising strength today.  We are up to 935 now, and I shorted at 930 or so.  It looks like the market is in a slow turnover process.  Maybe a double top at 943; if so we should go down tomorrow and the day after.  I'm a bit nervous about having to cover my shorts, but I can always sell one or two shares of the longs if I get a margin call.  

STOP out at 938?  I feel pretty strongly about my shorts, though.  And there is no leverage involved.  Stop changed to 940?

The reassuring thing is that this rise is on low volume; middle of the day chop?