Wednesday, December 16, 2009

TZA system trade


A close above 10.67 is a Buy Signal

11 comments:

Scott said...

I'm not an expert on TZA so I have a question that you may think is relatively basic. The Russell 2000 closed down 0.57% yesterday, therefore TZA should be somewhere around +1.71% at close. It closed +0.75%. Why??? That isn't the 3X leveraged I was expecting.

Allan said...

If you are looking for an exact correlation, simply buy/short 3X as much IWM. The idea here is to be on the right side of a high beta vehicle, not to extract an exact correlation of leverage from an underlying index.

Scott said...

Thanks for the info. I guess I am asking what the differences are in the portfolio of TZA/TNA (or for that matter IWM) and the Russell 2000 index. IWM had the same problem yesterday. The Russell was down 0.57% and IWM was down 0.28%. If IWM truly followed the Russell 2000 it would have been down 0.57% yesterday also.

This comment was on one of your posts on December 8th. "I suspect most readers are not trading full time (like myself) and have regular "day" jobs. It may be beneficial to review daily system ideas. I have taken your ideas and implemented them in a daily system that trades the QID when the Q'S are short and QLD when the Q's are long. One benefit of this system is that all trades are long so it can be traded in retirement accounts."

I vote for this one. I am a trader that has a day job, but is really interested in building a system for trading in my retirement account. No margin and possibly no mid-day transactions.

Thanks for the good work.

Allan said...

Scott:

Seems like half of my readership want to be hands on and learn a few techniques they can easily implement themselves, and half just want to know which side of the market, or trade, they should be in on a day-to-day basis. I think I can accommodate both groups, but there is only one of me and I have to figure out how to stretch me a bit, if there is a will, there is a way.


A

Allan said...

Scott:

Seems like half of my readership want to be hands on and learn a few techniques they can easily implement themselves, and half just want to know which side of the market, or trade, they should be in on a day-to-day basis. I think I can accommodate both groups, but there is only one of me and I have to figure out how to stretch me a bit, if there is a will, there is a way.


A

Anonymous said...

Allan,I would be ever grateful for a little christmas present this season.Ive been very good. heres what I wish for. maybe you can find santa's elf and come back with something...
I want something like another nnvc... but specifically, I want a small clue from your special Priory of Scion friend....whats their next big play, or one of their small but nice ones, even. just something that would fit into the christmas stocking. and it has to be fresh, not 3 months stale like the platinum trade.
fresh and discreetly presented.
thank you santa.
Cant they dish out a few crumbs for us??

Ray said...

Hello Allan, New here. What is the thesis on NNVC? They are a developmental stage company that burns a fair amount of cash that they raise though additional equity offerings. The technology sounds good, but is that enough to invest now? Thanks in advance for your thoughts. Best wishes.

Anonymous said...

Hi Allan,

Thanks for the charts on TZA! I have a question though... Are your in/outs on the close of trigger bar or the open on the next bar after the trigger point? Thanks.

Allan said...

Re: NNVC

Every 10,000 shares of NNVC (cost today $8,300) will be worth $1,000,000 no later then December, 2014. You want details? Make use of the Search function and 5 years or archived blogs.

Re: Entry/exits on TZA

It doesn't really matter, half the time entering at the close works better, half the time entering the next open is better. Overall, it doesn't really matter.

Allan said...

Re: Priory of Scion

want something like another nnvc... but specifically, I want a small clue from your special Priory of Scion friend....whats their next big play

This was passed on last night and I am awaiting a response. With permission, I will post.

Ray said...

Hey Allan, Any reason you know of for the big jump in NNVC? The stock was up about 17% on about 3x average volume. Seems bullish as in "someone may know something". Thanks, Ray.