Trading For The Non-Trader

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Includes: ROM, UCC, UXI, UYG
by: Mad Hedge Fund Trader

Summary

I start out my day by calling readers on the US east coast and Europe, asking how they like the service, and if there are any ways I can improve it.

You’d be amazed at how many great ideas I pick up this way, especially when I speak to hedge fund managers or other industry specialists.

A common consideration I hear is that readers don't have the time or inclination to execute my market beating Trade Alerts.

Don’t worry. There is an easier way.

I like to start out my day by calling readers on the US east coast and Europe, asking how they like the service, are if there are any ways I can improve it, and what topics would they like me to write about.

After all, at 5:00 AM Pacific time, they are the only ones awake.

You'd be amazed at how many great ideas I pick up this way, especially when I speak to hedge fund managers or other industry specialists.

So when I talked with a gentleman from Tennessee recently, I heard a common complaint. Naturally, I was reminded of my former girlfriend, Cybil, who owns a mansion on top of the levee in nearly Memphis.

As much as he loved the service, he didn't have the time or the inclination to execute my market beating Trade Alerts.

I said "Don't worry. There is an easier way to do this."

Only about a quarter of my followers actually execute my Trade Alerts. The rest rely on my research to correctly guide them in the management of their IRAs, 401ks, pension funds or other retirement assets.

There is also another, easier way to use the Trade Alert service. Think of it as "Trade Alert light." Do the following.

1) Only focus on the four best of the S&P 500's 101 sectors. I have listed the ticker symbols below.
2) Wait for the chart technicals to line up.
3) Use a macroeconomic tailwind, like the ramp up from a 0.5% GDP growth rate to 2.5% we are currently seeing.
4) Shoot for a microeconomic sweet spot, companies and sectors that enjoy special attention.
5) Increase risk when the calendar is in your favor, such as during November to May.
6) Use a modest amount of leverage in the lowest-risk bets, but not much. 2:1 will do.
7) Scale in, buying a few shares every day on down days. Don't hold out for an absolute bottom. You will never get it.

The goal of this exercise is to focus your exposure on a small part of the market with the greatest probability of earning a profit at the best time of the year. This is what grown up hedge funds do all day long.

Sounds like a plan. Now what do we buy?

(NYSEARCA:ROM) - ProShares Ultra Technology 2X Fund - Gives you a double exposure to what will be the top performing sector of the market for the next six months, and probably the rest of your life. Click the link for details and largest holdings http://www.proshares.com/funds/rom.html.

(NYSEARCA:UXI) - ProShares Ultra Industrial Fund 2X - Is finally rebounding off the back of a dollar that will slow down its ascent. Onshoring and incredibly cheap valuations are other big tailwinds here. For details and largest holdings, click http://www.proshares.com/funds/uxi_index.html.

(NYSEARCA:UCC) - ProShares Ultra Consumer Services 2X Fund - Is a sweet spot for the economy, as tightfisted consumers finally start to spend their gasoline savings, now that it no longer appears to be a temporary windfall. This is also a great play on a housing market that is on fire. It contains favorites like Home Depot (NYSE:HD) and Walt Disney (NYSE:DIS), which we know and love. For details and largest holdings, click http://www.proshares.com/funds/ucc.html.

(NYSEARCA:UYG) - ProShares Ultra Financials 2X Fund - These have become the ultimate big-cap value play, whether interest rates ever go up or not. When they finally do rise, probably in 2017, it will instantly feed into wider profit margins for financials of every stripe. For details and largest holdings, click http://www.proshares.com/funds/uyg_index.html.

You can then unload your quasi-trading book with hefty profits in the spring, just when markets are peaking out. "Sell in May and Go Away?" I bet it works better than ever in 2017.

Every year the pundits and talking heads argue vociferously that "Sell in May" is nothing more than folk wisdom, and every year it works like a champ.

ROM
UXI
UCC
UYG

John Thomas

For Those Who Invest at Their Leisure

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.