Posts tagged Why
Why Shorting SDS is in my opininion the greatest long term strategy for the average investor
Nov 8th
IF you look at the chart located HERE, you will see that over time, SDS does worse than its non leveraged counterpart SH.
This is caused by the Constant Leverage Trap, a problem with double leverage that causes below 200% returns.
The solution to the issue, and the way to achieve an over 200% return, In periods of volitility.
If you short this, or any of the leveraged ETF funds listed below, you may be able to better use ETF’S to maximize your profit
Short & UltraShort MarketCap ETFs:
| ETF Name | Ticker | Benchmark Index |
|---|---|---|
| Short QQQ | PSQ | Nasdaq-100 |
| Short Dow 30 | DOG | DJIA |
| Short S&P 500 | SH | S&P 500 |
| Short MidCap400 | MYY | S&P MidCap 400 |
| Short SmallCap600 | SBB | S&P SmallCap 600 |
| Short Russell2000 | RWM | Russell 2000 |
| UltraShort QQQ | QID | Nasdaq-100 |
| UltraShort Dow 30 | DXD | DJIA |
| UltraShort S&P 500 | SDS | S&P 500 |
| UltraShort MidCap400 | MZZ | S&P MidCap 400 |
| UltraShort SmallCap600 | SDD | S&P SmallCap 600 |
| UltraShort Russell2000 | TWM | Russell 2000 |
UltraShort Style:
| ETF Name | Ticker | Benchmark Index |
|---|---|---|
| UltraShort Russell1000 Value | SJF | Russell 1000 Value |
| UltraShort Russell1000 Growth | SFK | Russell 1000 Growth |
| UltraShort Russell MidCap Value | SJL | Russell MidCap Value |
| UltraShort Russell MidCap Growth | SDK | Russell MidCap Growth |
| UltraShort Russell2000 Value | SJH | Russell 2000 Value |
| UltraShort Russell2000 Growth | SKK | Russell 2000 Growth |
UltraShort Sector:
| ETF Name | Ticker | Benchmark Index |
|---|---|---|
| UltraShort Basic Materials | SMN | Dow Jones U.S. Basic Materials |
| UltraShort Consumer Goods | SZK | Dow Jones U.S. Consumer Goods |
| UltraShort Consumer Services | SCC | Dow Jones U.S. Consumer Services |
| UltraShort Financials | SKF | Dow Jones U.S. Financials |
| UltraShort Health Care | RXD | Dow Jones U.S. Health Care |
| UltraShort Industrials | SIJ | Dow Jones U.S. Industrials |
| UltraShort Real Estate | SRS | Dow Jones U.S. Real Estate |
| UltraShort Semiconductors | SSG | Dow Jones U.S. Semiconductors |
| UltraShort Oil & Gas | DUG | Dow Jones U.S. Oil & Gas |
| UltraShort Technology | REW | Dow Jones U.S. Technology |
| UltraShort Utilities | SDP | Dow Jones U.S. Utilities |
Short & UltraShort International:
| ETF Name | Ticker | Benchmark Index |
|---|---|---|
| Short MSCI Emerging Markets | EUM | MSCI Emerging Markets Index |
| Short MSCI EAFE | EFZ | MSCI EAFE Index |
| UltraShort MSCI EAFE | EFU | MSCI EAFE Index |
| UltraShort MSCI Emerging Markets | EEV | MSCI Emerging Markets index |
| UltraShort MSCI Japan | EWV | MSCI Japan Index |
| UltraShort FTSE/Xinhua China 25 | FXP | FTSE/Xinhua China 25 Index |
Now I included the regular short ETFs because I wanted to make a point. **The following Idea is a derivative of something I am trying to start a fund based upon** You can go 100% pro the s&p, dow, nasdaq.. etc. and get a better than 100% return against the index. Now some will argue that the Double Leverage trap dosent exist but I believe that it is an effective way to game this market.
My reccomendation for this week is to wait until tuesday to go long. I will Post another brief on monday night.
Diversify your bearishness, toss in the nasdaq: or why i like UltraShort QQQ ProShares (QID)
Nov 1st
Dont worry, Im not just gonna keep my hate located on the s&p 500, of all of the indexes, the nasdaq seems to be behaving the most bearish, as such I am recomennding UltraShort QQQ ProShares (QID).
It is important to make sure that you dont through all of your bags on to one new york city bums shopping cart.
That strand of geinus being said, although it might have better been left unsaid, the market could go anywhere right now, probably down, but it is my wholeharted opinion that by friday we will have an intense fear based sell off (probably on the gdp #s)
TooLongDidntRead: long QID
Take the 50% gain,or why i would be long UltraShort MSCI Emerging Mrkts ProShares (EEV)
Oct 30th
So, id like to thank all of my readers for their responses, I appreciate the emails. (use the contact me link above)
That being said, I stand by my claim, you SHOULD NOT BE SHORT THIS STOCK ANYMORE!
I am on full confidence saying that you should be going long this stock at the first oppourtunity.
I think we have peaked.
I think we are due for a nice turnaround. As such i have a small portfolio for you to use with your new gains
LONG Short
EEV UYG
SDS SSO (Yes i realize sds is right next to this, this is to negate the constant leverage trap)
DUG
Why if you listened to my position on UltraShort MSCI Emerging Mrkts ProShares (EEV) You Made 40%+ today
Oct 28th
If you did win with this trade today, my humble advice to you is to take the trade.
You got a 40% gain off my advice today, I fully expect a sell off day by close of thursday, as such, I am reversing my position on this stock.
Why I would be short UltraShort MSCI Emerging Mrkts ProShares (EEV)
Oct 27th
It is afterall an emerging market, and as such, its much easier to sell at a obvious peek like we have right now, The constant leverage trap is providing you a excellent oppourtunity to make a quick 20% (remember to set out prices, otherwise this one might sting.
P.S. im going to be posting alot less from now on due to work, quit emailing me, it just pisses me off, use the contact me link above.
Why if I was still able to, I would be buying Apple Inc. (AAPL)
Oct 21st
So AAPL is reporting tonight.
My suggestion is that this is a buy the rumor sell the news earnings report, in full reverse of the normal way to play a mac-rumor, I personally believe that no matter what happens to AAPL, the stock will be up 5+% tommrow.
I personally have gotten out of this market, I need to make sure my money is safe, because i may not be able to take out student loans this upcoming semester.
I firmly belive we have bottomed, or why I am holding SSO
Oct 12th
In my opinion, we found a bottom last friday.
It was textbook, the fall in the open on heavy volume, the high that followed. There is even a cup and handle pattern in there.
I expect the dow to be back above 9500 by the end of the month, so I am going to hold my 2x the s&p results etf, sso.
Also, i have gotten emails asking if you should liquidate like Jim Cramer says. I say, no, that would be the very definition of buying high and selling low.
If you are young, just wait it out.
I hate Charlie Gasporino(sic), or why my worst trade ever turned into somewhere around my 2nd best day
Sep 16th
Let me start of this blog post by saying that I love it when companies survive the night but are tremendously trashed, as you can usually tell the direction of the stock within 5 minutes and they tend to be good for MAKE-YOUR-YEAR returns.
This should have been one of those stories for me today.
I had been trying to pick up 1k shares for 2.5 for a while this morning after getting rid of a bad O/N airline short that i had to keep due to the worst rule in the world, the Pattern-day-trader rule.
So I cover my lcc and take to trying to by 1k shares of lcc (I was only really 5-10 cents off) and guess what happens, Charlie Gaspoino (I am relatively sure.) Says, (AND IM PARAPHRASING) ” Yeah, I know some guys, and they are high up in the fed, and they talking bout extending AIG teh bridge loan”
Of course im trying to buy, each time, the stocks already shot up by the time i place my order, SO eventually I manage to put in a market order, I buy at 4.01
Click on the chart to enlarge the chart part of the story.
Long and short is, Sometimes, the best move is to do nothing in times you really shouldnt be in there.
My advice for tommrow, if the company is still alive, and goes below $1.00 It might be a good time to buy.
Even with an 80% share dilution off of a recent pre-fnm panic, (20*.2) you would still value the stock at $4.
In addition to this, the company’s health is no longer in jeopardy. And there are buyers out there expressing interest.
Your medicine for a broken market: Why I bought SSO today
Jul 29th
First off the good news,
I WAS GRANTED MARGIN
That means I can finally go in and out of stocks like I have always wanted to, and in this volitile market, that is the most valuable thing you can hope for.
The market was set for a turnaround and looking at where oil was going I decided that An investment in the S&P 500 was a good idea.
SSO is a double leveraged etf, so if you apply another 2x layer through margin to it you are getting a BROADLY diversified portfolio, yielding 4x the daily result of the s&p 500. You could also short the market 4x with SDS. Now this may seem like a risky move, but lets consider what could concievably happen in a three day period. Lets say the market moves up 1.3% a day. This would mean that SSO would be yeilding 2.6% a day, with compoundment this would mean that you would have yeilded 8% on a regular portfolio. And 16% on a leveraged 2x portfolio. In otherwords, the market retraces less than 3.9% (Which I believe it will.) and you made 16%. Mind you, the exact opposite could happen, so be careful, and ask an investment advisor before doing anything.
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