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Rank: Advanced Member
Joined: 6/15/2008
Posts: 240
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If we are going into a prolonged bear market rally and we will know if we go above 9500 which is resistance in the channel we are trading in now. I suggest you start reading this thread if you feel I have credibility in my thinking and you will find stocks like: http://finviz.com/publish/103108/NL0dl0227.png
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Rank: Advanced Member
Joined: 10/24/2008
Posts: 52
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Although a perpetual optimist (long or short), I tend to be a realist when it involves my money. s/r and channel trendlines on longer time horizons get little respect during the silly season and this is especially true with the current (and somewhat unprecedented) global financial picture.
Don't get me wrong, I am sitting on a pile of investment cash as well as for swings and positions, but I firmly believe TA, GANN, sun-spots, g-spots, oija boards, dart boards, etc., are risky in this environment.
Intra-day and scalping massive sizes of the ultras or e-minis is, in my abilities, much more predictable and profitable. And no "over-night bad news" is much easier on the nerves.
My $.02.
Also, the new 3x ultras offer even greater leverage/volatility as needed. Calc those R:R's and use probabilities in your favor.
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Rank: Newbie
Joined: 8/28/2008
Posts: 6
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Hi Stockman, I'm assuming you're still sitting on the sidelines in cash, since we haven't heard from you. What are your latest thoughts on the overall market?
Thanks,
Tom
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 240
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Hi Tom:
I watched the market yesterday go down while the bear etf's went up. I am 100% cash and didn't trust that the rally was over. When it opened lower this morning, I bought SMN,SRS, DTO, EEV, SSG, and FXP. As I discussed in my "Looks like we are going lower" section in stock tips, I bought small quantities and as the market goes lower, double my ownership to average the buys. I almost tripled, but fear the unemployment number in the morning may be lower than estimated or Obama's press conference in the afternoon may turn the market up. These are double etf's so had I bought yesterday, I would've been up close to 20% in two days. If the market go's up tomorrow, I will sell because they go down as fast as up. I have the largest ownership I have ever had in these because we were near the top of the trading range yesterday morning and have a potential 1000 point to thee last low. If I am wrong, I will liquidate with stops I will put in tonight.
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Rank: Newbie
Joined: 8/28/2008
Posts: 6
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Thanks Stockman. Your opinions are valued and appreciated. One thing that always surprises me is that these news events that have the potential to move the market, more often than not seem to have the opposite effect. For example, Obama wins(or no matter who won), the market was expected to go up, because the uncertainty of the election would be behind us. Instead, the market tanks for two days straight. Now, the feared Friday jobs report that had all of the talk and hand wringing on the news programs all week, came out pretty ugly, and the market is heading higher. I wouldn't be surprised if Obama's press conference makes the market go lower, for no other reason other than doing the opposite of what is expected! Not that I would bet on that outcome! I'm content to be in cash and have been since Dow 10,500, thankfully. It's just going to be tough to figure out when we've reached the bottom once and for all. Have a great weekend!
Tom
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 240
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Let the record show that on a 1000 point range for the day, the 3x leverage etf's had the following results today:
ERX +30%
FAS +21%
TNA +25%
BGU +14%
From the bottom. BGU went from 31 to 42. ERX 37 to 52. fas 30 to 39. tna 29 to 41 which were best timing numbers.
With the Dow closing up over 500 points today, there were only 2 new highs on the NYSE and 614 new lows. You have to question the validity of today's rally.
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Rank: Advanced Member
Joined: 6/22/2008
Posts: 51
Location: Santa Clara
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stockman wrote:
With the Dow closing up over 500 points today, there were only 2 new highs on the NYSE and 614 new lows. You have to question the validity of today's rally.
Wow!!! Thanks for that insight Stockman, I never would have thought to look at these statistics. Finviz summarized the entire market this way - 18 new highs and 1508 new lows!!! If you exclude the ETFs from the new Highs, then there are only 8! and if you exclude the low volume ones, then there are only 3. Of these 2 are the ones in IBD 's recent top stocks .
Here is the screener link
netbacker attached the following image(s):
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 240
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Rank: Advanced Member
Joined: 6/15/2008
Posts: 240
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If we go into a bear rally next week, these are the winners: http://finviz.com/screener.ashx?v=141&f=ind_exchangetradedfund&ft=1&ta=1&p=d&o=-change&r=1http://finviz.com/screener.ashx?v=211&f=ind_exchangetradedfund&ft=1&ta=1&p=d&o=-change&r=1The previous post is a history of a bear market and this post is a rally so if you own a mix of etf's from both groups, you are ready for a morning that is down and an afternoon rally or the opposite situation. I am thinking while I type. If you add to the potential rally stocks when the market is down, you are buying low to sell high in the afternoon. If you see the market, start to rally, you sell your bear etf's and rebuy at the end of the day when the price has gone down. The opposite would happen with a morning rally. You would base your buy/sell actions on your opinion of market direction in the following days. If you have a bear rally or a down market all day, your bear's would lose/win and your bull etf's would gain/lose and the two would roughly offset. This is all happening in my mind as I think about the dynamics of it all. An offset is a break even unless you know we are in a sustained multi-day direction and you would weigh your mix more heavily to the gaining side. Sudden market direction changes, give you protection while you are re-allocating the mix. I have no idea if this would work because I just came up with it while looking at this magnificent sites info. I would be interested in getting opinions on this as I will start implementing Monday.
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Rank: Newbie
Joined: 11/1/2008
Posts: 5
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Hi Folks,
This is my first post so let me start by thanking Eric for this wonderful site.
Very special thanks to Zigzagman for your amazing tuition and charts which give so much confidence even in a difficult trading environment, Stockman for all your suggestions and expertise on how to search for stocks and everyone else that is so kind and helpful. I'm proud to be a new member.
Stockman, I don't know squat about options, but this sounds like a synthetic straddle where you bet on both sides. One insures the other. Maybe an options expert could chime in? Paper trading the idea could produce some answers.
Best regards,
DougB
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