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Paul Mosgovoy
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Truth is timeless: “Markets never change” – Jesse Livermore, 1923 The early masters, Livermore, Wyckoff and Loeb isolated themselves from the crowd and crowd thinking. None of them ever graduated high-school and yet they each became legends in the market. Their techniques have been time-tested.... More
  • Recognition Event In The Small Caps 2 comments
    Jul 15, 2014 10:42 AM | about stocks: IWM

    Most can now see that the direction of the Russell 2000 is down.

    The difference is that a short position in the iShares Russell 2000 ETF (NYSEARCA:IWM) was identified and established way back when there was less risk.

    • As a disclaimer, establishing the long position in the Direxion Russell 2000 Bear 3X ETF (NYSEARCA:TZA) was not perfect and a bit messy.

    However, at the same time that this position was established a review of the comments on Seeking Alpha showed only one trader (a former floor trader) taking the same action much to the derision of others.

    That is good company.

    This is the way of the markets. In retrospect, when the decline in the IWM comes to fruition and is nearing an end, we may look back and see that missing the exact high by 1 or 2 points, did not make any difference in the outcome of the trade.

    We will see.

    There should be no question at this point that the IWM peaked on 7/1/14, and is now in a serious decline.

    (click to enlarge)IWM Daily Chart

    Chart by TeleChart

    Even though it looks like we are on our way lower with the short position, we need to be prudent and select an area for a stop.

    A good stop location would be yesterday's high of 116.46 in the IWM which corresponds to approximately 14.55 in TZA.

    Disclosure: The author is long TZA.

    Stocks: IWM
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Comments (2)
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  • zaw77
    , contributor
    Comments (54) | Send Message
     
    Hello Paul, thx for your updates. I am still 1/2 in TZA, seems well today, the same for my DUST shares (going to sell 1/2 eod with nice profit). Regards, Chris
    15 Jul 2014, 02:12 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (119) | Send Message
     
    Author’s reply » Good Chris,

     

    I am planning on staying in for a long as possible. I am very busy and so do not have time to work the smaller moves.

     

    Nice that you are in the green on your trades.

     

    Paul
    15 Jul 2014, 02:58 PM Reply Like
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