Tuesday, October 20, 2009

Inverse ETF's

Question from Comments, last night:

"Good charts Allan, thanks. Can you give a basic list of the short plays that would work for shorting the market? Would inverse etf's work? or are there better ways to play it?"



A core SHORT play would be a basket of inverse ETF's, using a trend following system to trigger entries and if necessary, exits. Here is a list of bear market ETF's that I monitor, waiting for the trigger prices to kick in before entry. The trigger-Long prices are based on the Daily charts and these trigger levels change daily.

Please consider these ETF's and triggers for illustrative purposes only:



EDZ Long @ 6.15
SMN Long @ 10.20
SRS Long @ 10.10
ERY Long @ 11.25
TZA Long @ 11.75
TYP Long @ 12.05
EEV Long @ 12.10
ZSL Long @ 4.75
DUG Long @ 12.60
DRV Long @ 20.75
DPK Long @ 16.30
FAZ Long @ 20.00
QID Long @ 22.70
BGZ Long @ 20.00
SDS Long @ 38.50
DXD Long @ 33.50

Using the Daily triggers will reduce whipsaws, nonetheless, if triggered Long and prices so south and trigger Sells, respect. The above prices are my numbers, generated from my trading systems, so they are not generally applicable unless you are using my set-ups. Triangles from Market Club will work just as well in the long run, so there are many ways to do this.

Find something that works, then use it.


A

15 comments:

Anonymous said...

Thanks Allan this is what i was looking for.
Something else, most small/medium caps stocks been crashing from sometime on prior to serious market move. How is that?
Serge

Allan said...

FYI

I have been triggered into all of the ETF's highlighted on the main blog. My own preference is to use 90-120-240 minute charts for such trading, so its possible that I am early on some of these. But it is also just as possible that they will all scream up from here. Most have the potential to be 10X baggers if the lows of 2009 are revisited on the major averages. So for now, TREND and FORECAST are in sync.

A

Anonymous said...

Hi Allan,

If the dollar moves even lower or crashes, then Oil, Gold and Markets might move much higher. It seems as if this scenario is 101basic Fed Policy lately. "Market goes down, sink the dollar, market goes back up?" Absolutely not in anybodies best interest for every 401K Plan, every state pension plan or every corporate pension plan in the entire country to totally blow up just now. Of course you are and always have been 100% right in your analysis. You are betting against the most greedy politicians who most desperately need to, want and absolutely will be re-elected regardless of the cost or consequences. After all, Allan, we put a man on the moon, making the market go up is not so difficult. Beware the smiling faces of the people you trust the most.

Wish you the best, warm regards from NYC, joe

Anonymous said...

NYC Joe

but what goes up, must also comes down, NO ???

Allan said...

You make some very good points, Joe. It's much easier for me to follow the market above/below the ATR line then figure out all that macro-economic puzzle, so therein lies my entire strategy, simple and effective as it might be. As for my expectations and forecast, all things shall pass, either I will be right or I will change, when reason ignites that passion in my soul to view the future as something other then abysmal, sooner or later.

That said, there is a huge trendline coming down from the mid-2007 TOP that prices have bumped up against these past few days. It would take a leap across that trendline and days if not weeks above it to change my forecast.

So there it is, my line in the sand. As is always the case, the market is unfolding as it deems appropriate, for its own reasons and not as I or anyone else says it should. The one constant in a world woefully lacking of same.

A

Anonymous said...

Well said Allan. You have a plan, trade your plan. These markets, crazy or not, at least will quickly tell you if you are right or wrong.

TY A, J

T said...

Thanks A,for that list.

I see there were a few that exist that you didnt list. curious as to how they figure or dont figure into your trading plans.....(maybe they just havent triggered yet?)

SKF
TBT
DOG
SH
RWM
SEF
PSQ
RYJUX
....or others I left out?
thanks again.
T

also ,I like the idea of playing off the 4 hour,2 hour charts as you describe,and daily chart.
.................................

Boy, the charts,(all charts) are really looking so close to the finish line these days....completing wave 5's ,coming into terminal triangles,major s/r levels, etc... something Has to give before too long.
...................................

I just scribbled a list of dates to stare at after reading one article about the crash of 1929,and 1987, where they coined those 'black monday' days,you know,....and I looked at the calendar....and wondered.imagined a news headline

"BLACK MONDAY - OCTOBER 26"

"BLACK MONDAY - NOVEMBER 2"

"BLACK MONDAY - NOVEMBER 23

.......I havent done the 'black thursdays' yet.lol
('black thursday' october 22,2009...."no one saw it coming,until it was too late...")

of course nov.23 is a big symbolic day in history.

november 2 is the next full moon reversal zone.
the current new moon is happening Now.

I'm closely watching these time periods.

Allan said...

T: The essence of Trend Following is in the path of least resistance for the tradable, which can be anything, it really doesn't matter. I know that is blasphemy in our world of financial analysis, so what else is new?

Thanks for your heads-up on the moon cycles.

Anonymous said...

T,
The Bradley dates are also worth watching. October 22-23.

L

Anonymous said...

everytime you think it is going down for sure, it just pops back up ...

singlengle said...

GRUS doing very well, reverse split doesn't seem to be a problem.
Any comments

Anonymous said...

Hi Allan,
First of all, I want to thank you for your blog. I have really learned a lot and I appreciate you sharing your knowledge and your time with us. Second, I was just curious as to your view regarding NNVC in relation to the expected drop that you feel is coming for the market in general?

I am heavily invested in NNVC for some time now and every time it comes down to these levels I think about buying more, however, with this expected drop for the market coming, do you see NNVC going down with the rest of the market? (after all, it has been going down while the market has been going up). I have read all of your posts for NNVC and I am clear that you do not want to be out of it in case of a huge sudden rise, it is just that I am starting to lose my "faith" in everything about this market, including NNVC.

Do you have any real recent news on this company that you can share or are we still going forward with hopeful expectations?

Thanks again for your blog and for your time.

Allan said...

Re: NNVC & market crash

First of all, I have been forecasting new lows in the market for the past six to nine months while the market has continued higher. So let's not get carried away with my forecast.

Second, NNVC's attraction to me is that they may have created an anti-viral that will eliminate just about any virus from the human organism with no side effects nor collateral damage to the organism. THIS IS HUGE!

These are independent speculations. Either or both could create wealth, great wealth, in a matter of weeks or months. I prefer to evaluate the merits of each one independent of the other and suggest that all do the same.

Anonymous said...

why did the market go down today ???

I heard that Wells fargo got a downgrade ...

Anonymous said...

Allan,

Why are you long DUG? You have significant headwinds, unless you are only playing day to day moves, which is a dangerous strategy. Longer term, oil will move higher.
rsh