George Simone

If It Looks Like a Bull, Walks Like a Bull, Acts Like a Bull…

He's the best!
Period!!

Wall Street Witch Hunt: Financials

Re Aalan's comments on speculative ETF picks:
Obvously, he knows what he is talking about, but he is wrong claiming that holding triple or double inverse ETFs for more than a day or two is either wild speculation or bravado, but not strategy. There is a long list of inverse ETFs that have investors who had the insight to buy and hold these things months ago laughing all the way to the bank.
There is the Pro Share ULTRA Short Financial ETF - SKF, which if bought at roughy $80 a year ago could have been sold last November for $260, and even last Friday January 16 was still trading around $150. Or take the DB Commodity Double Short ETN - DEE. If bought last July at around $20, it could have been sold last Friday January 16 at $80. If bought at $60 at the beginning of last December, the DIREXION Small Cap Bear ETF - TZA sold at $140 by the middle of the same month.
There are many more examples like these which prove that holding inverse ETFs for longer than a day or two does pay if the trend warrants it. There are those of us who believe that if trading unleveraged ETFs or ETNs is good, then twice the leverage has to be better and three times better still. Leveraged ETFs with their daily rebalancing and greater volatility can work to a trader's advantage, "BUT" only on the right side of the market, be it short or long such as during periods of steady increases or declines of the underlying index. Be on the wrong side, and leveraged ETFs will quickly turn into weapons of portfolio mass-destruction.
This is why it is so important to constantly monitor support and trend-momentum of the underlying index and see when, how or even if a trend is developing.

Trading Has Taken Over the World

So the question for an ETF investor {?} is to buy-and-hold or to trade. The answer is both. In all markets - but especially in the volatile ETF game - the two main muggars are "support" and "trend-momentum" and they determine if certain sector ETFs ought to be traded or held.
Roughly speaking, for the industrial and financial sectors ETFs, during the period from March to October /07 support and momentum were bullish and these ETFs traded as such. From October /07 to around May /08 support and momentum turned mostly flat, with the result that industrial and financial ETFs were either sold or held.
All of this changed drastically in May of /08 when support and momentum turned decisively bearish, and the rest is history. But since the December /08 low, support and trend-momentum have turned totally flat, and are now neither bullish not bearish. It means that both - Bulls and Bears - are sitting on the fence and in no mood to jump off on either side. This is why the market is moving mostly sideways, within a relatively narrow trading range where ETFs are mostly in a holding pattern, which could also be construed as a part of an basing process. If this is so, then Small Caps, Mid Caps and Financials are best positioned to be market leaders on the next leg up.