For the last year or so, life’s exigencies have driven me away from stocks and toward the ETF market. My trading these days is greatly reduced and probably 80% ETFs; and I am more and more pleased with the results. As most know by now, ETFs come in all flavors and power, and I’ve settled mostly on the ProShares 2X.There is one trade I take routinely and since we don’t recommend commodity trades for Spike, I thought I’d mention it in the Blog. I like to trade the long bond with the opposing ETFs, TLT and TBT, or the 3x ones TMF and TMV. It’s a simple trade–simple is good–I buy either ETF at the outer Bollinger Band and look to sell a couple of days later around the 20 EMA. I use the 2 RSI as a trigger, so when it gets into oversold territory, I get ready. While I use the 3X ETFs–TMF and TMV (they have crummy volume so use limit orders) to trade, I use the TLT and TBT for the pattern.Every once in a while, the bond goes on a major trend trade as measured by the ADX (see fall 2008); at that point I try to trade the trend. But the rest of the time, the bond goes back and forth from overbought to oversold without much fuss. I usually get 2-3 of these counter-trend trades a month at the extremes. The gains average about 3-5% on the 3X in 2-3 days, with a low-risk, high percentage average (use tight stops). No one will get rich on the trade, so think of it as cigar and wine money.
This message came from Susie W – a Spiker based in Mexico.
Nils F, a SpikeTrade Member, sent us this photo and message:Thought you guys would appreciate this story featuring my son Eric, a recent college graduate who just recently landed a job in Investment Banking!When Warren Buffet was a business student at Columbia University his mentor was David Dodd, co-author of the most famous book ever written on the topic of investing, Securities Analysis. After he graduated and started his investment company Professor Dodd gave Mr. Buffet a modest sum of his own money to invest.Tragically, Professor Dodd’s wife passed away at an early age leaving him to raise his daughter Barbara as a single parent. He decided to send his daughter to a Quaker boarding school in Newtown, Pennsylvania called George School. The experience made a lifelong impression on her due to the care she was shown while there. Two years ago, after Warren Buffet decided to give much of his money to the Gates Foundation, Barbara Dodd Anderson, with Buffets’ encouragement, decided to donate some of the gains from her fathers investment with Mr Buffet, and gave $128,000,000 to George School. This past weekend was the dedication of the new library. Eric (graduated from George School class of 2004, Emily class of 99) went to the reception and had the attached picture snapped with the Oracle.”
For many months traders/investors have been trying to understand the markets move to current economic conditions, many have wondered how a market can continue to rally in face of a weak economic rebound. First one must understand that the current DOW move back to 10,000 level is basically not the same representation of the 2008 market. The 2008 move to DOW 10,000, and the current move to DOW 10,000 does not reflect the same stocks that made 2008 highs. If one were to look at the original DOW stocks in 2008, the DOW would NOT be at a new high. The indexes conveniently remove the weakest stocks that drag the indexes down to lower levels and replace them with stronger stocks.The 2008 DOW index is well below the 10,000 level. When the DOW replaced the three weaker DOW components of GM, C, and AIG, with stronger participants, it allowed the indexes to make new highs quicker. As Traders we are taught to “dump the losers” and “ride the winners” this holds true for the Indexes as well. The indexes all rebalance every few years and some more than others. This is one reason why you can see an index improve and march to new highs when the economy is not in sync. Technicals get us in the game early and fundamentals follow breathing life into long lasting trends and mutli year bull markets. We have seen the early technical signs and if we are in a new bull market cycle that is to last for years (3 -5) then we should see improvements in the economy as the market continues its uptrend. If the fundamentals cannot support the move, then the market will begin to discount this information and the probabilities increase we could see weaker prices in the future.
Hi to Pat, Alex, and Kerry,Checked out of the DanHilton [John stayed with Spiker Dan K during the Reunion]
Vladimir writes:It was a great pleasure to meet Spikers last time in Zurich, share ideas and experience. It was definitely worth it! I would also like to thank Alex & Kerry for joining the meeting via remote, answering questions and supporting us.Today I am glad to announce our next SpikeTrade meeting in Zurich.
Alex, Kerry:You both are
As many of you know, I used to work as a lawyer and senior vice president of purchasing for the parent of Western Union (WU).
When I saw this picture last week, my immediate response was that retailers are not going to have a good Christmas. This picture represents 12% of the world’s container ships that are sitting idle in the ocean off Singapore. The article said that the cost of transporting a 40 ft container of merchandise from China to the UK has fallen from
Did anyone notice that the DOW closed at 9605 today? What is significant about this close?
It is not so significant other than on September 10, 2001 the day before the tragic 9/11 attacks occurred. The DOW closed at 9605.