Inverse ETFs

In my opinion, you should NOT use inverse ETFs to trade against the larger trend, even for short periods of time. It is too risky and too hard. Trading should be easier than that.

The exception is when the larger trend is at a crossroads or changing. Then you can make a few bucks by betting against the larger trend at extremes.

I have made a lot of money by using inverse ETFs. If I'm in a bull market, and I buy the dip (at support) with them, I will make money. Also vice versa.

It's all about reading the larger trend correctly. Right now, IMO, the intermediate-term (3-9 month) trend is long, the short-term trend (1-2 month) is uncertain and the the very short-term trend is uncertain (1 week). So I am looking to buy the dips for an intermediate term long.

Trade update

Bought dip (too early) TSL (target 9.4), FSLR (target 34.5 in 1-2 weeks)

Changed mind on GDX. Looking at going long GDX for a swing.

Also looking at INDL, EDC, FREE, DRYS, SLW, DUST.

LT Views

I am very confident that we are in a long term bull market and have been (mostly) trading accordingly for at least 6-8 months (thank god). Further confirmation came about a month ago with the very important break up in TNX and down in TLT.

I am not an EW-er but if i were, I would count us as in Wave 3 of 5 of a move that begun last October 1. Wave 1 ended December. Wave 5 is still to come, and will probably take us to 2007 highs. As you know, $COMP and $NDX have already confirmed that this is a bull market. $COMP, which is a 3000+ stock index, broke 2007 highs.

At some point there will be a Wave 4 (we might be in it) and at some point $COMP may retest 2007 highs, but in my very strong opinion, in this environment, any consistent swing trading strategy other than buy the dip is a losing proposition. As a good researcher and guinea pig, I have tested other strategies.

GDX, TSL, FSLR

Looking at a possible short.

Bought dip (too early) TSL (target 9.4), FSLR (target 34.5 in 1-2 weeks)

Changed mind on GDX. Looking at going long GDX for a swing.

Also looking at INDL, EDC, FREE, DRYS.

Shorty shortz

Coming close to a possible tradeable top. 10-20 ES points from here. 1330-1340 ES. 2800 NDX. 760 TF. AAPL 680.

Trade Update

Out of all shorts. Sold SLW -- nice profits but a bit too soon. Still in NUGT for a few more points.

Bought FSLR @ 26.65 -- too soon. Will try to add at 25.2 or so.

Bought TSL at 7.95.

Will try to buy TNA on Monday.

My Views of Manipulation

"Manipulation" is a fact of life. The fed's policies in the past four years mirror its policies in the post WW2 era when they flooded the market with liquidity and kept rates down to help the economy recover. In the early 1950s, the Fed decided to let rates rise and stocks took off for a 20 year bull market. Such a move has started.

It is the Fed's job to intervene to provide liquidity in deflationary crises and to sap liquidity in inflationary times. That is in the Fed's charter, it is monetary policy, and it is reality. The fed has a dual mandate -- employment and inflation. And IMHO, over the past four years, in the face of extreme pressure, in spite of sometimes unhelpful fiscal policy, the Fed has done exactly what it should have.

And, IMHO, all Fed policy is reflected in charts. I, and many traders who have traded this rally more successfully than I, have been trading based on TA. Look at bluechipbulldog.blogspot.com for one example.

Shorty Shortz

I took partial profits but then shorted more TF, QQQ and FAZ. Will short more if it goes up. Will go long PMs (NUGT) soon.

Update: Closed most shorts. Long NUGT, SLW.

Switching short

IWM Puts; TZA 830-835 TF. Small position.

Update: Ouch. Will Add at 840-841.

Looking to buy SLV, SLW Puts; DUST calls

Looking to buy the RUT

Soon. TNA will be my friend.

Bought TNA 61.6 and 60.8.

Targets

Staying long EDC, TQQQ until at least 119 and 115 respectively. Will sell FSLR, TSL around 30 and 8 respectively. This is Wave 5 of 3 of big bull.

Should take us up to 1440 on the ES. Air pocket. Inter market relationships change, but charts don't lie.

DUST, TQQQ, EDC, TSL, FSLR

Still long DUST, in the money quite a bit. Plan to stay short for another 10% at least.

still long TSL, small position.

Tomorrow and Wednesday, I plan to go in big long -- long FSLR, TQQQ and probably EDC.

Short Again

Lots of DUST

A few IWM puts

A little CTRP and TSL as hedges. Will likely exit these tomorrow.

Out of shorts; Long for a bounce

Small long -- DUST puts, QQQ calls, TSL, bought at lows. Some support here. Will take a quick buck and run.

Upcoming trades:

1. Will short miners, long FAZ again, probably by EOD tomorrow. Looking for XLF 14 in a week or so. That would be a great FAS long.

2. TF has strong support around 770- 778, SPX around 1330. Will look to go long IWM at those levels. Showing some signs of bottoming.

Update -

3. Also looking at DUST and DUST calls at around DUST 35.

Update

Bought BGZ at 22.22. Will wait and see, but I'm looking for 1340 ES right now. Might go long a couple of solars at that point. Miners are going down big time. Will add to DUST tomorrow on expected bounce in miners.

Still long FAZ and DUST. Watching FAZ carefully.

First target is 775 or so on RUT.

Week Ahead

I expect continued weakness in risk assets until at least March 8.

I plan to stay long DUST until at least $33.5 or so (but possibly much higher), and also stay long FAZ until at least $29.

$USD is going to 81.8.

I will watch the dollar closely for further clues on the metals and indices.

COMP will be a great buy at around 2900;

I am also planning on going long the solars around $25 on FSLR and $6.80 - 7 on TSL.