Tuesday, April 27, 2010

TZA

TZA is a highly leveraged ETF that is an inverse index for the Russell 2000.  I watch it mostly on an intermediate daily basis, but adding the hourly provides a head start for traders.

TZA sustained downtrend from mid-February


This short from about $10 has been an excellent way to trade the recent market strength, with gains of about 45% in two months.


TZA 60 minute trend model

The hourly model above is on a fresh Buy signal, but prices have fallen back to intersect with the trend reversal line.  One of two outcomes is imminent,  either prices find support and rally off of the trend line, or, prices fall below the line and enter a fresh Sell mode.  One way to trade this is to enter Long here, with a tight stop at the hourly reversal level (5.45) and if TZA closes below that level, cover and reverse Short.  

As long as the daily model is in a Sell mode, that bearish trend gets the benefit of doubt here.  When and if the daily flips Long, TZA's bias becomes bullish.

5 comments:

Anonymous said...

AH..............
The ANTI-CRAMER is warming my heart with this particular post.

All I gotta say is:

YOU can't touch these results! :-)

Lucky

Anonymous said...

Hi Allan,

Are these charts using your trend 2.0 settings or 4.0 settings?

Thanks,
Eric

Allan said...

Default settings are 7, 2.0; unless otherwise stated.

TZA did bounce nicely off support, next threshold is daily model reversal.

Lou said...

XLF, SPX and Comp have all broken their respective early Feb channels ... RUT still comfortably inside it's channel.

Looks favorable for FAZ, SPXU and TZA ... keep talking Goldman Sachs.

Lou

Stan Trenton said...

On my platform,
TNA daily keeps flipping long-short-long.
If at the close TNA is on a Sell,
I will buy UCPIX.
Stan