Thursday, August 18, 2011

Buy signal confirmed.

3:50pm: Buy signal is confirmed. I'm closing my shorts now and initiating a small-ish long position. The system is suggesting a 50% long position, and while there is a good chance we could get a bounce tomorrow, I'm not brave enough to risk that much...not after what happened a few weeks back. I'll probably stick to 25% or so. Reason being is that I'm not convinced we are in a "healthy" market for obvious reasons...and my unhealthy signal is still a "hold" which would keep the short position open. I will not go heavily long until I get a strong buy signal. (Where both healthy and unhealthy modes are showing a "buy".) Good luck!


11:05 am: Most likely we are going to see a buy signal today. It is not a strong buy signal, and there is a plenty of risk here (on both sides), but I think we may see a snap back rally tomorrow. At the very least, covering shorts today would be a wise move.

13 comments:

  1. RMI ,i'll do it if you give me your bank account :P lol and a letter of consent

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  2. hmmm, can you say 'loss of clearance'... :D

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  3. lol with ur bank account i'm sure i can retire in china

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  4. Pick a really cheap 3rd world country, cause thats as little as you will get... lol

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  5. As J-trader stated, very small position in TNA. I am personally flat on overnights because of market uncertainty. Bring market news into your positioning as well as his system when making trades.

    ****Important news today. Philly Fed numbers were off by disastrous calculations today to the negative. The Fed just gave a Swiss National Bank(thought to be very stable) 200 Million in Liquidity Swap Lines, most they have ever done since October 2010. Gold at new highs again(LOL). That's short term.

    Long Run Outlook: Start building a position in TZA for the long run. I am. I'm averaging in more and more in a separate trading account. Here's why:

    Today history is bearing witness to sovereign nations on the brink of failure. In 2008 there was the threat of bank runs. Today there is the threat of currency runs. In 2008 there were government bailouts. Today there are central bank bailouts. In 2008 The FED, Chinese, ECB, and IMF used all their resources to fix the problem, by giving money. This time they don't have the same amount of money needed to fix the problem.

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  6. I hate to say it, but over the longer term, I agree with Chris. Meanwhile Obama jets off to Martha's Vineyard for a vacation. We're doomed.

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  7. Good morning all. Woke up to find ES down 16... lovely. :-/

    I also agree with Chris and Michele. Long term I see us heading back to SPX666 (by next year?) and beyond. I just don't think holding TZA is the way to play it due to leveraged decay. Big up days will kill TZA over time. Better if you can get a hold of TNA shorts and not have your silly broker force you to buy them back. Good luck with that. I'm not sure what the absolute best way to play it is...

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  8. Looks like if I don't get rid of all this damn TNA, I am going to be broke by SPX666...
    I just need a good 'get out of Dodge' point... Monday WOULD have been good... even Tuesdays peak at 48 would have been good...
    Dang it

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  9. Chris and JT - thanks for the thoughtful conversation on TZA for long-term outlook. if time decay is a concern, then, would sell TZA put at topping time handle the time decay issue? just a random thought for your comments

    Thx

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  10. That sounds reasonable although I am no options expert. I'll defer to someone who plays options.

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