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Overbought Market? ... Shorted DJIA

Tuesday, April 2, 2013 - 10:41 AM
Dear Readers,

US Market appear to be overbought.  I shorted the DJIA using leaveraged ETF by ProShares - DXD.

The DXD tracks Dow Jones Industrial Average with a daily factor of -200%.

Yours Truly,
- Anon
2
ytytytytytytytyt158 posts since
Jan 28, 2013
Rep Points: 623
1. Tuesday, April 2, 2013 - 10:51 AM
Yes, my over-bought indicator says 729.  But one never knows how long the over-bought situation will continue.
3
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,351
2. Tuesday, April 2, 2013 - 12:56 PM
Dear 51hh,

Indeed .... Noone knows.

What indicator are you using?  Is it a standard TA indicator or you've created a custom?  Standard CCI (19) is nearing +200. Which appears like overbought.

We'll have to wait and watch how well DJIA does over next few days/weeks.

Yours Truly,
- Anon
2
ytytytyt64 posts since
Feb 28, 2013
Rep Points: 197
3. Tuesday, April 2, 2013 - 2:17 PM
I have a buddy that gives us overbought/oversold indicators; have no idea how/where he develops it.  But it seems pretty reliable and serves as one of my flags to buy/sell/hold.
3
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,351
4. Wednesday, April 3, 2013 - 4:30 PM
Dear Readers,

I am generally wary of shorting, and more so when I'm using a security that make gains/losses double the losses/gains of the index it tracks.

Today DJIA suffered a reasonable loss. I look forward to more deep/quick losses in DJIA.

Yours Truly,
- Anon
2
ytytytyt64 posts since
Feb 28, 2013
Rep Points: 197
5. Wednesday, April 3, 2013 - 5:10 PM
This is a one-day-up one-day-down see-saw market; shorting it will not be profitable IMHO.  Unless you are doing day trades.

I bought in FSCRX months ago; now I am regretting.  I am stuck for 90-days (with short-term fee of I bail).
2
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,351
6. Wednesday, April 3, 2013 - 6:06 PM
Dear 51hh,

Maybe ... maybe this is a see-saw market ... maybe not.  What I'd like to get a rather sharp/quick downturn, so that I can cover the short at-profit.  If the market goes side-ways or up, then I'll have to cover at-par or at-loss.  What happens after the downturn will have no effect on this trade!

How much is the short-term trading fees for FSCRX?  I'm sure you must have made calculation, before entering, at level the loss becomes intolrable, and if reached you must exist whether 90 days are over or not.

Ages ago I used funds that had early redemption fees and used to factor such fees into the stop-loss level.  Then  slowly new products came into play that have no restrictions of short-term-demption-fees, and switch over to those.

Yours Truly,
- Anon
3
ytytytyt64 posts since
Feb 28, 2013
Rep Points: 197
7. Wednesday, April 3, 2013 - 7:05 PM
This is a one-day-up one-day-down see-saw market; shorting it will not be profitable IMHO.  Unless you are doing day trades.

 Actually, I would think that one-day up-and-down "seesaw" markets are exactly what you'd want if you are going to use double/triple short ETFs. Be aware that these things are used for daytrading. They are not for buy-and-hold.
2
WilWil242 posts since
Feb 26, 2010
Rep Points: 1,281
8. Wednesday, April 3, 2013 - 7:36 PM
Dear Wil,

Indeed ... In generation caution is required for trading anything that can lose its value. Which is almost everything in the market. :-)

The double/triple levarage amplfies the price swings.  If it goes in the desired direction, then that's great, else the losses can be breathtaking.  A very caution calculation for the stop-loss is required before taking a short position.

 
Be aware that these things are used for daytrading.

Not necessarily. 

These instruments possess certain characteristics, and it is upto the acumen of the trader how exactly to use these instruments.  One usage of course is day trading (or week or month or ...).  Other usage is hedging.  Hedging open long positions, hedging Structured Notes etc.

If a trader views these as merely instruments available in the toolbox, then s/he can determine how/when/if to use any of these.

Yours Truly,
- Anon
4
ytytytyt64 posts since
Feb 28, 2013
Rep Points: 197
9. Thursday, April 11, 2013 - 10:30 AM
Dear Readers,

The amazing bull-run has continued.  My trade of DXD iated April 2 is in red.  I shorted DJIA using DXD again today (April 11, 2013).  Often times this is referred to as (in a rather derogatory manner) as doubling-down.

Yours Truly,
- Anon
1
ytytytytytytytyt158 posts since
Jan 28, 2013
Rep Points: 623
10. Thursday, April 11, 2013 - 11:27 AM
Dear Readers,

The amazing bull-run has continued.  My trade of DXD iated April 2 is in red.  I shorted DJIA using DXD again today (April 11, 2013).  Often times this is referred to as (in a rather derogatory manner) as doubling-down.

Yours Truly,
- Anon

I was wondering about your short order on DJIA days ago.  And you have the nerve to double-down today?? :D

Note that the market is brutal and takes no prisoners; both on the way down and on the way up.  There is a saying that do not bet against the market or Fed. 

I would have taken the loss and walked away; but you are a true gambler:-)  Good luck! 

2
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,351
11. Thursday, April 11, 2013 - 1:15 PM
.

Dear 51hh,

No no no ... I'm no gambler. Merely a trader.  The market has moved against me this time, and it is not the first time either.    ;-) 

So far the loss I have is a notional one, but evenif I need to sell at a loss making it real, then that's acceptable.  The fact is every trade that involves risk taking, has a potential of causing a loss.  That's just part of doing business.  I am sure, since you are a market participant, you'd know about this already.

Yours Truly,
- Anon
4
ytytytyt64 posts since
Feb 28, 2013
Rep Points: 197
12. Saturday, April 13, 2013 - 10:37 AM
Are you still long gold ?
2
decadesdecades2 posts since
Jun 22, 2010
Rep Points: 56
13. Sunday, April 14, 2013 - 10:15 AM
Dear decades,

No. 

But I am finding that the precious metals have become more attractive lately.

Few days ago Gold was near 1615 and as of Friday (4/12/2013) it was just under 1480. This drop of about 8% makes it more attaractive.  Palladium, Silver and Platinum have also become attractive.

If these drop another 10% to 12%, then I'll begin buying PMs and Miners.

Yours Truly,
- Anon
2
ytytytytytytytyt158 posts since
Jan 28, 2013
Rep Points: 623
14. Monday, April 15, 2013 - 1:07 PM
.

Dear Readers,

Okay ... Now the market is moving in the direction I want ... which is down !!! ... ;-)

Another 300/400 points drop on DJIA will be nice for me to exit the DXD I bought on April 11, 2013 at a resonable profit.

Yours Truly,
- Anon
2
ytytytyt64 posts since
Feb 28, 2013
Rep Points: 197
15. Monday, April 15, 2013 - 2:33 PM
.

Dear Readers,

Okay ... Now the market is moving in the direction I want ... which is down !!! ... ;-)

Another 300/400 points drop on DJIA will be nice for me to exit the DXD I bought on April 11, 2013 at a resonable profit.

Yours Truly,
- Anon

Don't count on it; it is an oversold day out of fear.

1
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,351
16. Thursday, April 18, 2013 - 3:16 PM
.

Dear Readers,

US Stock markets suffered a nice drop over past few days.  Deeper losses in broad US Stock market would have been nicer for me. But this drop was not bad.

I covered the short (sold DXD I bought on April 11, 2013) for 5% profit in 7 days.  I'll short again if/when DJIA rises above 15,400 ...

... Still holding on to DXD of April 2, 2013.

Yours Truly,
- Anon
2
ytytytyt64 posts since
Feb 28, 2013
Rep Points: 197
17. Thursday, April 18, 2013 - 4:37 PM
Don't do that, yt, you are responsible for the stock market downfall now!!:D
1
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,351
18. Thursday, April 18, 2013 - 6:45 PM
.

Dear 51hh,

I wish I had that sort of power ... power to cause downfall of stock market.  ;-)  ... But that power resides with us. 

Us as in all of us who are market market participants.  Our collective actions/inactions cause the markets to rise and to fall.  (And I try to make some pennies while such actions/inactions are taking place.)

BTW, the Banks are looking rather oversold.  I am watching banking sector closely with intent to buy.

Yours Truly,
- Anon
3
ytytytyt64 posts since
Feb 28, 2013
Rep Points: 197
19. Thursday, April 18, 2013 - 8:49 PM
Yt,

The "wind" is slightly oversold; but the mystery/challenge is whether that will cause the market to go up or down.  It may go downward to more "oversold" or reverse the trend to be an upward buying situation.

Personally I think it is still a see-saw move (one day up two days down) motivated by daily events. 

Unlike you, I am a famous contrarian; i.e., the market will go opposite of my action; if I buy, the market will go down the next day and vice versa.  This indicator is almost with a 100% reliability:-)

BR,

51

 
2
51hh51hh1,461 posts since
Jan 16, 2010
Rep Points: 6,351
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