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Stock, Options, ETF and Commodities Investor; My educational background is in Computer Science and Accounting with significant entrepreneurial and Fortune 100 Corporate experience in Information Management and Technology services in industries including: Consulting, Oil and Gas, Manufacturing,... More
  • DGAZ - What Is Next For Natural Gas And DGAZ? 36 comments
    Feb 19, 2014 6:31 PM | about stocks: DGAZ

    Since my last article on DGAZ posted over the weekend, DGAZ - Buying on Dips - here, we have been on a wild ride with this latest spike in Natural Gas, today closing over $6/mmbtu. Some traders now say we are going to $7/mmbtu, however, no matter how high we get, someone will always pick a higher target and at some point, there is a failure and the bears take over - at least for a while.

    In my prior articles, I did not expect to see this spike run this high, as our prior spike to 5.7 appeared it was going to hold. But the bulls took control again so far this week in a way that surprised even bull side traders. Early in the day, I read posts from bulls who sold out of their positions and stood in disbelief as the price went even higher. The common comment was, whoever is buying at these levels could be caught in a huge trap. Well, we will see what is ahead.

    Lets take a look at some charts, cover some issues on DGAZ and again look for how to play this going forward.

    First, lets check the daily chart on Natural Gas for spot prices:

    From this chart, RSI is showing that NG is hitting an overbought level and during the time frame covered, this has always resulted in a correction. However, if you look at MACD and momentum indicators - they are very strong (representative of the big move today) and appear to signal that we could move higher - although, price action as I write this is falling a bit lower.

    Lets see what the weekly chart shows us:

    Look at the very similar spike to almost precisely this level in 2009. RSI showed oversold and we had a major correction. In fact, every time RSI hit these overbought levels along the line drawn, we had a significant correction in Natural Gas.

    Now, the monthly chart:

    Again, on this chart, we see that we hit the RSI levels that drove significant corrections in 2005 (from a NG price of 16 - a time when fundamentals were very different and the base of that rally started from the levels we are just touching now), and from the peak we hit in 2007.

    Well, we got a big dip today and I think it was a good time to add to positions. We are yet to see if this is the top, or whether the top is still in front of us in NG, and the resulting low in DGAZ. I do think we are close, if we did not already see this high today.

    On prior rallies, it was the storage report results that turned us downward with big falls and there will be a release of storage inventory levels again tomorrow morning that should indicate if our milder weather over much of the US - although still some very cold weather in the NE, NW and some of the MW states drives a smaller draw than expected.

    With a smaller draw, I think we are in for a good run starting tomorrow following the report in DGAZ. If the report shows a larger draw than expected, we may get to witness more of a run in Natural Gas and have yet another opportunity to reposition DGAZ shares to lower prices. And, as we learned today, when that bull gains steam, it can definitely move. My thoughts are the probability is in favor of a correction in the price of NG and a move higher in DGAZ.

    Looking forward, during the last 2 years, March has been a net injection month, rather than a withdrawal month, with net injections of about 101 bcf in 2012 and 98 bcf in 2013. Once storage reports begin to show net injections versus withdrawals, the bulls may have a harder time getting price runs with much enthusiasm to the upside.

    There are many ways to trade these positions. One can use hedging, options, be both long and short, or take a single bullish or bearish view adding on dips and selling on rallies. It is recommended that positions in DGAZ are managed in order to reposition shares when the opportunities are there to buy into spikes and sell into rallies in order to best capitalize on the moves and work through the turn and longer-term trend.

    I will be looking for a rally starting tomorrow in DGAZ after the Storage Inventory report. If the report shows a larger draw and Natural Gas rallies further, I will be looking to reposition with lower DGAZ prices.

    Disclosure: I am long DGAZ.

    Additional disclosure: I also am long BOIL puts. I may trade and reposition DGAZ shares based on dynamics associated with the Natural Gas Market. I may also trade in and out of UGAZ, or buy/sell calls and puts on BOIL or KOLD (2X Leveraged ETFs on Natural Gas Index).The thoughts and opinions in this article, along with all stock talk posts made by the Author, are my own and are shared on the basis of helping others learn, to provoke other points of view that help us all on our journey to become better investors. My posts are never intended to provide investment advice. Investors should always view multiple sources of information in their due diligence process.

    Stocks: DGAZ
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Comments (36)
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  • markrpat
    , contributor
    Comments (249) | Send Message
     
    If's ands, and buts. Still thanks for the article.
    19 Feb 2014, 06:35 PM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » YW mark. No one said it was going to be easy.
    19 Feb 2014, 07:00 PM Reply Like
  • bfstrog
    , contributor
    Comments (74) | Send Message
     
    $DGAZ is tracking April NG futures which are currently at $4.87. The March contract is irrelevant to this ETF.
    19 Feb 2014, 06:53 PM Reply Like
  • bfstrog
    , contributor
    Comments (74) | Send Message
     
    http://bit.ly/1doWKRY
    19 Feb 2014, 06:55 PM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » Thanks for the comment, bfstrog. We are well aware that DGAZ is working from the April contract now. What the price of NG does in a substantial way is very relevant to what DGAZ does.
    19 Feb 2014, 06:59 PM Reply Like
  • bfstrog
    , contributor
    Comments (74) | Send Message
     
    Thanks... I do appreciate the analysis. While I agree that the March contract is "substantially relevant" to what DGAZ does, isn't the April contract completely relevant, i.e. wouldn't it be more informative to dissect the April chart? For example, the March contract could spike 30% to $8 but the April contract might not make much of a move, at all... which means the correlation between DGAZ and the spot price of NG is rapidly deteriorating as the last March trade day approaches on Feb 26th. Am I incorrect in my assumption?
    20 Feb 2014, 11:11 AM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » Yes, you are correct on that basis for sure! In DGAZ, glad we are not being affected by the dramatic spike in March. If March were to correct significantly down though, I believe DGAZ would respond more than folks think. Today, the storage report was mostly in line so we didn't get much move in either direction so far.

     

    Certainly my analysis will be looking at spot, March and April charts. Still curious to see what the Mar contract is going to do into next week, especially as next weeks storage report will be based on this week - much milder climate across most of US and lower expected draw and trending that direction into March injection season.
    20 Feb 2014, 11:18 AM Reply Like
  • bfstrog
    , contributor
    Comments (74) | Send Message
     
    Thanks for the response. I'm enjoying the articles.
    20 Feb 2014, 11:41 AM Reply Like
  • Robert Edwards
    , contributor
    Comments (587) | Send Message
     
    Good article Grow! No one has a crystal ball to know exactly where the top in NG is, but we are surely in the midst of the final late winter rally and when it turns, it should turn very hard down to the south in NG and shoot northward in DGAZ!
    19 Feb 2014, 06:57 PM Reply Like
  • 11036321
    , contributor
    Comments (4) | Send Message
     
    Randy, many peoples hopes and dreams are riding on your articles. Highest of respect to you. A short while ago on Yahoo's Market Pulse relating to DGAZ, a couple of guys revealed that the CME had just raised margin requirements for NG by 10%, I presume that to be a good sign for the short side of the trade. Another noted that todays candlestick was a hammer with a long whip tail, another bullish indicator for DGAZ. Like you say though, we'll see.
    20 Feb 2014, 12:33 AM Reply Like
  • vfc1955
    , contributor
    Comments (60) | Send Message
     
    After several weeks of brutally cold weather in the NY Metro area we hit the 40s yesterday and today through early next week the forecast is for milder weather in the 40s and 50s. Big melt down of snow expected today with high 50s.

     

    DGAZ bottoms out very soon if not already.
    20 Feb 2014, 09:43 AM Reply Like
  • rxraider
    , contributor
    Comments (35) | Send Message
     
    Looks like -250bcf draw down for nat gas, which is about what was expected. Nat gas currently holding around 6. DGAZ is around $3.16. I'm averaged in at $3.25. Could this be a peak in NG? What do you guys think?
    20 Feb 2014, 10:48 AM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » Raider, you are correct, the 250 bcf draw was in line. The 7 bcf add back to the prior week was not expected and adds a little to the bear side. When this week gets reported next week, should be warmer and smaller draw - so I think bulls are likely re-calculating whether current prices are warranted.

     

    Not sure NG is ready to fall down hard yet.
    20 Feb 2014, 10:50 AM Reply Like
  • eric1x
    , contributor
    Comment (1) | Send Message
     
    Thanks for the article. New to trading and holding some DGAZ avg $3.70. From everything ive read, its a matter of time... However, how long are you long holds? Ive been warned of decay on these 3x leveraged ETFs. Don't know if I completely grasp it and trying to understand how long to hold.
    20 Feb 2014, 08:30 PM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » Eric, Decay is a factor to consider with leveraged ETF's. Decay works on NAV, when the trend is moving against your position, or volatile within a sideways trading range. Holding during these periods, you will normally see the decay in the price.

     

    However, with leveraged ETF's, the trend is your friend - x2 or x3. When you are moving with the trend - you don't have to worry about decay. NAV will climb and price/NAV will often grow as well, similar to PE on stocks.

     

    A long-term hold on a leveraged ETF where the trend continues, no problem. But, hold one long-term that is moving against you or sideways and you will grow to dislike that position.

     

    My theory is that DGAZ should have its day soon. In order to best avoid decay while we wait for the trend, reposition when you can by buying the spikes (cheap DGAZ) and selling when we rally.
    20 Feb 2014, 09:48 PM Reply Like
  • xinxinliu
    , contributor
    Comments (13) | Send Message
     
    Hi Randy,

     

    Thanks for your article. I really appreciated.
    Please continue to share with us your insight and advice, our hopes are on your article.

     

    I am newbie, and was talked into buying dgaz 1 month ago, and it plummpeted just after a couple of hours since I owned them. And I observed my gains from $500 to -$10K. The past month is been a torture. NG is the new high in four year. Guess I happen to witness history. :(

     

    People said it is manipulated. It always said if you are afraid something happen, trust me, it will be worst than you ever thought of. :(

     

    I hold my shares at $7.6 and my biggest fear is people keep talking there is a reverse split coming. Do you foresee that could happen?

     

    Do you think if I should bow out and re-enter when the uptrend is confirmed? I still have some dry powder which I can average down. But I can't afford more losses any more. Since the first biggest mistake (no lost stop) I continued many other mistake :(

     

    I appreciate your confidence as for me now NG seems like a fairy that never ends. :(

     

    Thank you again for your great article. I read every single post of $dgaz from stock twits for the past month and people post your articles there as confidence and encouragement. :) Your article is one of the reason I am still holding my shares because you said it might up to 11. But dont worry it is my decision. :)

     

    Have a good night! Hope tomorrow will have a green day.
    21 Feb 2014, 06:43 AM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » User204...,

     

    Sorry to hear you have been holding on to DGAZ since the 7.9 levels. You can see why it is so important to reposition shares to continually drive your cost basis lower when you are working as a contrarian to the prevailing trend and looking for the turn. I believe this winter weather has caused a lot of grief for many. You even see the FED statements including weather factors as a reason for some of the weakness in US economic reports recently.

     

    I will continue to update my analysis but make sure if you are continuing with this trade, to reposition shares by selling on any strength and buying on the extreme dips. Forecast is calling for some more cold next week that may give an opportunity to position with some lower shares.
    21 Feb 2014, 09:29 AM Reply Like
  • xinxinliu
    , contributor
    Comments (13) | Send Message
     
    Thanks!

     

    Will next week another killing to dgaz? Do you think dgaz will go 2.5 or under?

     

    We are on April contract now and April is only at $4.99, March is at $6.18 and they roll next week so April has allot of room to move up.

     

    Any concerns?
    22 Feb 2014, 08:12 AM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » I will be working on another article that will take a look at this and anticipate what is ahead this next week. Certainly, there is potential the bulls will move the April contract up some, before we start to see the downside, providing an opportunity to get DGAZ at lower prices.
    22 Feb 2014, 11:02 AM Reply Like
  • xinxinliu
    , contributor
    Comments (13) | Send Message
     
    Thank you Randy. Look forward to see your article about it. We are quite concerned at this point. We all know ug might stop at some point, just like sprint will come, however, what's the destination of dgaz, will it see that day coming w/o being r/s?

     

    Thank you so much!!!
    23 Feb 2014, 09:34 AM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » XinXinliu,

     

    The latest article is out. I would not be concerned about a reverse split. If there is a reverse split say 10:1, that just means instead of closing Friday at 2.81, we would be at 28.10. Psychologically, that might even be an advantage for DGAZ. But, if you look at the volume on DGAZ over the past couple weeks, I think you will see that others are getting more enthusiastic too about what DGAZ should do in the near future.
    23 Feb 2014, 11:06 AM Reply Like
  • wbarboza
    , contributor
    Comments (3) | Send Message
     
    Today it still does not seem to be a good day. The index for April is +1.36% and DGAZ is going -9%... I think my math is not matching the 3x de index...
    21 Feb 2014, 03:33 PM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » That is the trend working against us at present that shrinks the P/NAV. Some see value in this for the rise as, today there have been 44MM DGAZ shares traded so far. UGAZ, 1.358MM
    21 Feb 2014, 03:41 PM Reply Like
  • wbarboza
    , contributor
    Comments (3) | Send Message
     
    And forecast is for more cold next week, so I dont think we will see our portfolio turning green in the next 7 days...
    21 Feb 2014, 07:00 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (587) | Send Message
     
    The cold weather of next week has been known for some time now, that it was coming. There has been plenty of time to factor next week's cold into prices. They say stocks price in what will happen over the next 6 months. Surely Nat Gas can price in this week, what will occur next.

     

    Only if we are colder than normal in future forecasts, should NG rally. If the future forecasts stay unchanged, or we get a bit warmer than expected, then NG could fall.

     

    The expiration of the March Contract next week could have an impact since we popped a lot when the February Contract expired a month ago. There was a major short squeeze on traders holding their shorts till the last minute, hoping for some relief. The same could occur again. Whether there is a short squeeze or not in the March contract, in my opinion, will dominate the trade direction over the next few days, making the weather or anything else virtually meaningless.
    21 Feb 2014, 07:07 PM Reply Like
  • markrpat
    , contributor
    Comments (249) | Send Message
     
    wbarboza..please see my posts and read other articles. I see you are new. Careful about where you place your money. Lots of attention on natgas lately, no need for you to lose on the front end. Good Luck.
    21 Feb 2014, 07:18 PM Reply Like
  • wbarboza
    , contributor
    Comments (3) | Send Message
     
    Thank you. Indeed I was used to invest in Brazilian market. For Dgaz my average price is 4$ and as I dont need the invested money now, I have no problem waiting its coming back.
    Also, I can say I dont choose the timing for repositioning very well, specially as DGAZ is very volatile.
    22 Feb 2014, 08:18 AM Reply Like
  • GJN
    , contributor
    Comments (53) | Send Message
     
    Hello Randy - could u explain to XINXINLIU what u mean by repositioning herself? I read her question & your response and it's not totally clear. She stated that she has DGAZ at 7.6. How do u think she should reposition now? Sell her 7.6 holdings at a loss and rebuy at below 3 here? Add to her 7.6 holding to reduce the 7.6 average price? Also interested to know how exactly u reposition? Do u use stop loss if the trend continues against you once you take a position. Do you add on the way down to reduce your overall cost? Also - what about the reverse split question?? Thx.
    22 Feb 2014, 10:25 AM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » GJN,

     

    Very good questions on repositioning. I may touch on this in my next article in more detail as well, as I have communicated with several readers who have felt they were stuck in some positions at the higher basis. It may be difficult to reposition from where we sit today and, my view is that we have experienced and ridden the worst in working to find the bottom in DGAZ and having the rollover in the top for Natural Gas.

     

    Repositioning would essentially be replacing higher priced shares with lower priced shares by selling on rallys and buying on dips (Natural Gas spikes). Here are some thoughts I had working through this:

     

    1) First, I did not want to sell out of all shares on a rally, in the event the DGAZ rally would continue. While we are looking for the bottom, it is hard to know when we are finally there and we don't want to miss the ride up.
    2) Creating tranches of cash to move into a position is helpful. Lets assume someone wants to move $9,000 into the full position. Separating into 3 tranches of $3,000 a piece, the deploying those as prices get lower, helps to average the cost basis down on the full position.
    3) Repositioning, one could sell shares (even if at a loss) on a rally - especially if the view is that lower prices will offer a better buying opportunity. This is the hard part for some people - to take a loss, in order to buy back at lower prices but, it is better to do this, than to take the loss all the way lower. Then, when prices get to new lows, buy back the shares.

     

    For example, lets say someone entered their first tranche at 7.9. But, the first severe winter storm moved in, NG price began working up and we find ourselves at DGAZ 5. We might put some or all of tranche 2 in place at 5 and this averages the position cost down. Then after the storage report a week later (and we did have this happen, NG falls and DGAZ rallies 35%. That would have been a great time to work on a reposition. One could have sold the 7.9 shares at say 6.5 (taking the 1.4 loss) but reposition those shares when we get back to 5 or lower. Net effect is, you would take the 1.4 loss instead of finding yourself at 4, still carrying shares at a 3.9 loss position because cost basis is 7.9.

     

    Another way of doing this is, each time you work your way to a new low that seems to be a good buy price, purchase the shares. Then, when you get a rally, offload some percentage of the shares. While searching for the bottom, I actually found this to work easier for me. Sometimes on a rally, it was hard to know if another severe winter storm and rally in NG was coming or not, so hard to know to reposition.

     

    Therefore, once I knew we had another storm and it provided a new lower entry, I would buy the lower price shares and on a rally, I would sell some shares (offloading shares from higher prices). Net effect is, I replaced higher priced shares with lower priced shares.

     

    Example:
    1) I buy 3K shares at 7.9 thinking this may be the bottom. No rally to sell into, price is slowly declining.
    2) Suddenly NG starts to spike on new winter storm warning - too late to get out of 7.9 now as you don't want to sell at the bottom. So, I buy more with tranche 2 at 5.
    3) Storage report comes out and we get a rally to 5.5 so, I sell first tranche shares at 5.5 (7.9 - 5.5 = 2.4 loss).
    4) Next, we look for a new lower entry to buy lower, say at 4 and save ourselves 1.1 on the loss of those shares.
    22 Feb 2014, 11:22 AM Reply Like
  • GJN
    , contributor
    Comments (53) | Send Message
     
    Thanks for the good explanation/clarification on repositioning. However, this may sound easy to do, but the severe volatility and price swings we have seen in this winter's cycle makes it more difficult to implement, as one does not know if a specified repositioning sell in a DGAZ bounce is selling at the top of the bounce action. What if the bounce continues higher and you sold into the bounce too soon? If you're going to sell into a bounce to reposition lower then you would like to sell at the top of the bounce and not midway (to limit your loss). Also, traders like XINXINLIU are now stuck holding shares that were purchased at higher prices and I bet one reason for not implementing any repositioning strategy, is the severe price swings (volatility) we have seen. Nat Gas has been under big money speculator control and many were caught off guard by the severe spikes and price swings and could not enter a normal repositioning strategy and many are now watching DGAZ trade below 3 wondering if a RS is coming and what to do? It also appears the severe volatility has not come to an end. Once again, what are your thoughts on the reverse split question? TY.
    22 Feb 2014, 12:22 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (587) | Send Message
     
    Let me explain something that I have found helpful. Suppose in the example I have 3 traunches of cash to buy DGAZ. I also have 3 trading accounts: 1) my IRA, 2) my wife's IRA and 3) my margin trading account. The first time I buy, I use my IRA as I am a bigger risk taker than my wife and being the man of the house, and I am calling the shots in trading, I go into battle first and take the most risk. Suppose I bought in at $7.90. Well, suppose I got in too early and now I have to deploy a 2nd trauche of cash. I next by some $5 DGAZ shares in my wife's IRA. By being in a 2nd account, I can separate the two transactions easier in my mind. Then when we get the rally to $5.50, I sell out 100% of my wife's shares bot at $5.00 for a nice profit. That frees up the 2nd traunche of cash and being separated, it does really feel like a profit. If I had added to the first account, it would have merely lowered my average price and I would have to sell at a loss, which is much harder to mentally accomplish.

     

    At the $5.50 price, I sell exactly 50% of my losing position sitting in my IRA for a loss of $2.40. I then add $2.40 to the $7.90 price. If it keeps going up, then I just wait for $10.30 to break even on my remaining position, or I wait for a big selloff to buy back the shares at a discount. If we drop down to say $4, I might then decide we fell far enough and I buy back in there. The difference between $5.50 and $4 is a savings of $1.50 on half my shares that I liquidated. I then say I have 50% of my shares at $7.90 and 50% of my shares at $6.40, to reflect the $1.50 savings in repositioning.

     

    Then I just wait for a rally. If the rally does not occur and we fall to $3, and ultimately $2.50, then at $3 and down to $2.50, I buy additional shares with my wife's IRA, employing the 2nd traunche again. From these lows, we get a rally to $4.65. I get antsy and I don't wait for $4.65 high, and sell out my wife's 2nd traunche at $4.17 for a very tidy profit. Then as we rally further up, between $4.25 and $4.50 I decide to sell out 50% of my losing shares at an average of $4.35. Since I own shares at $7.90 and $6.40, I take a loss of $2.05 on the $6.40 shares and add that to $7.90 so now I need a rally to $9.95 to get my money back. Well, it goes down instead of up and so at $2.90 I buy back my shares that I sold out at a loss at $4.35. That is $1.45 lower, which lowers the $6.40 shares now to $4.95, leaving me long half of my position from $4.95 and half from $7.90. That brings us up to the present.

     

    From here I watch for a spot from $2.50 to $2 to buy in using my wife's IRA, employing the 2nd traunche, and I ride up to $3.50. The average price for my wife is $2.25 and at $3.50, she makes a nice profit. Because she is buying so cheaply, her position is much larger than before and she makes a nice windfall and thinks I am a genius. At $3.50, I decide to take my loss again on 50% and from $4.95 down to $3.50, that is a loss of $1.45 which I add to $7.90 so I wait for a rally to $9.35 to get my money back. If it happens we get that high, then great, if not, then we go lower and at $2, I buy my half back again in DGAZ and lower my $4.95 another $1.50 so I am long 1/2 my shares from $7.90 and half from $3.45. Below $2, I also get my wife's IRA involved at $1.50. We get a rally back to $3 and she is happy as she doubled her money on a large number of shares. At $3, I take a loss on half my low shares with effective average of 45 cents, adding that to $7.90. I now wait for $8.35 to get my money back. Or I buy again at $1 or $1.50 and keep it going. At $1 you bet I get my wife's IRA involved and in fact I get antsy below $1 and put some margin account money in.

     

    On a rally from $1 to $2.50, I make so much money on my wife's IRA and the margin account that I add up all the wife IRA and margin account gains and it far exceeds any remaining loss in my IRA. I declare myself a winner and move on, or I just wait for 50 cents or a 10 cent price or a penny to buy DGAZ. With this system I don't worry about reverse splits as I keep buying cheaper and cheaper and eventually I have my money back and more.
    22 Feb 2014, 02:04 PM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » Very well stated, Rob. Thanks for adding this to the dialog. Next article - DGAZ - Are We There Yet? posted here: http://seekingalpha.co...
    22 Feb 2014, 02:49 PM Reply Like
  • GJN
    , contributor
    Comments (53) | Send Message
     
    WOW Robert - that's quite an elaborate example and it's appreciated. However, if you look at the DGAZ chart, and price action since December - it's been mostly in decline with hardly any up days, and the small rallys that did occur were very muted. Those that bought in too early and were caught off guard by the polar vortexes and their resulting wild spikes are simply stuck now and facing a tough decision. Wait and add to lower the cost or sell now at a huge loss and buy in again at maybe a lower cost (if it hasn't hit bottom). I think this is what XINXINLIU was getting at. Thank you again for the lengthy example that you gave, but Im not sure it fits with the price action that's actually occured??
    22 Feb 2014, 04:01 PM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » GJN, you are correct. The price action has not been as helpful as we would have hoped. Since about the 7 levels, there were two significant reposition opportunities, and a few minor ones that can be difficult to pull the trigger on.

     

    Lets see what is ahead the next couple weeks. Could be much more advantageous.
    22 Feb 2014, 04:47 PM Reply Like
  • Growfast
    , contributor
    Comments (295) | Send Message
     
    Author’s reply » GJN,

     

    For more on repositioning on the Bull run, see my prior article here: http://seekingalpha.co...

     

    We want to look for opportunity to reduce losses when we are searching for a bottom, but on the way up, we want to work to enhance profit as well. With the volatility offered in the leveraged ETF's, there are usually some cycles in the pricing that offer these opportunities.
    22 Feb 2014, 08:40 PM Reply Like
  • GJN
    , contributor
    Comments (53) | Send Message
     
    Thanks for all your posts/comments!!
    23 Feb 2014, 10:39 AM Reply Like
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