User 161034

How to Trade in a Crisis

Fred, Your comments are well-taken, re trading the SDS. Check out the Trader Results on my website. Buying SDS when the market rallies has worked for us with this caveat: It has to be in or below its Entry Zone.
We use limit orders,not market orders, and adjust the price according to the next day's Entry Zone.

We have been inclined to just hold the GLD, again buying on dips when price is inside the Entry Zone.

GLTA

On Mar 02 12:22 PM freddyv wrote:

> Agreed. This is my basic position and it has worked well for well
> over a year now.
>
> One should be wary of all ETF's, especially the leveraged ones but
> the SDS has performed much as expected, with little of the inefficiencies
> of other leveraged, more focused Exchange Traded Funds.
>
> However it is not recommended that you hold SDS for a long period
> of time as it will deteriorate and it tends to outperform in short
> bursts of market turmoil. In short, if you have a great run with
> the SDS take your profits and wait for it to come back to a better
> price level. History tells us that even a rapidly declining market
> with additional downside potential will not move straight down but
> will consolidate and rally along the way; BUY SDS INTO THESE RALLIES!
>
>
> I also agree with holding GLD. Given the possibilty of a total financial
> meltdown growing out of Eastern Europe, holding 10% of your portfolio
> in GLD is a wise move.
>

UltraShort ETFs: At a Tipping Point?

RY,
Agree with you - - - the Ultra ETF's can be traded successfully over the short term - - - the E-Zone System is pretty accurate for this.

I have had very good results using it on SDS.
With market volatility where it is, and the VIX so high, these trading oppy's should continue for a while.

Good fortune to you.


On Nov 15 12:44 PM R Y wrote:

> The Ultra ETFs aren't meant to track a multiple of the index over
> long periods. The prospectus is clear that it tracks only a multiple
> of short-term ranges (a policy of replicating the day's price action,
> but the above comment about it doing reasonably well for periods
> under a week jives with my experience).
>
> I'd recommend reading up on the analysis done by other SA posters
> on the structure of the ETFs - good to know before putting money
> into them. I still find them valuable for trading.

More Uncertainty? Try Ultra ETFs

Thanks, Old Trader.
As a further reply to Sachin,This is from Pro-Shares site:

<<< Investors in any ETF, including ProShares, should be aware of potential differences between daily net asset value (NAV) and closing price. ProShares NAVs are calculated using prices as of 4:00 PM Eastern Time, when equity markets close. Some ETFs calculate NAVs earlier in the day based on the time their benchmark prices are set (Fixed-Income ProShares NAVs are set at 3:00 PM when the bond market closes). Through October 7, 2008, ProShares traded until 4:15 PM ET, when the equity futures markets close. Beginning Wednesday, October 8, 2008, trading in ProShares ETFs on the NYSE Alternext U.S. (formerly the American Stock Exchange or Amex) will close at 4 p.m. ET rather than 4:15 p.m. ET (see separate announcement).

The closing price of any ProShares ETF, which is the recorded price of the last trade, can occur before or sometimes after the NAV calculation, and may be different from the NAV.

Investors should note that each ProShares ETF is designed to track the 4:00 P.M. value of the index underlying its benchmark. >>>




On Nov 13 10:03 PM old trader wrote:

> sachin,
>
> The bottom line is "slippage". Both SPY and SDS have many "moving
> parts", and they're not the same "moving parts'. Same is true of
> other Ultra ETFs (DIG and DUG, for example). The inverse correlation
> is pretty close, but not perfect.The same holds true on just one
> side of the trade, over a span of time, because the Ultras basically
> start at "0" each day, so if you track the S&amp;P, and it drops
> "x" over a 3 month span, SDS would NOT be up "2x" over the same period,
> but hey, they still make a decent hedge, or allow for some nice profits
> ;-)

More Uncertainty? Try Ultra ETFs

David, you comment is appreciated, and even tho it may have been made "tongue in cheek", there is a certain bit of truth in it.

However, no one has the perfect crystal ball.
All of us are playing the odds, and you are correct, they do favor the short end.

That being said, in addition to the contras, there are always stocks that rise on days that the Dow and/or S & P fall - - - and visa versa. It is those moments when investors can take dollars off the table - - - and should do so, depending on their time horizon (age).

Some of us do not have the luxury of time in which to recover, especially if we are dependent on dividends and interest payments. That is why this geezer switched strategy to trading the contras. Even after tax consequences, the resulting income is greater than what the market currently provides in divvys and those safe munis.

Best wishes, Fritz H.

On Nov 13 10:17 AM David Lentz wrote:

> But if the markets do not like uncertainty, then they should be pretty
> pleased, as it seems certain that we are all going to hell in a handbasket,
> with equities continuing lower and lower. Seems perfectly predictable
> to me. The (short) markets should be ecstatic.
>
> :-)