fjpenney

More ProShares Ultrashorts Tomfoolery

Augustus:

If I use my timer signals to buy or short QLD, since 08/02/06 I would have had only ten trades and would have turned $100,000 into over $900,000. Yes this is backtesting and I may be guilty of optimizing. Instead of buying QID or shorting QLD when my timer gave me a "get of the market" signal on 06/11/08, I bought IEF (iShares 7-10 Year Treasuries ETF) and am pleased with the results.

If others short sell 2X bull ETF's, I would appreciate hearing if it is difficult to do (i.e. does your broker carry sufficient shares).

Fred

More ProShares Ultrashorts Tomfoolery

I agree with DaveW. I have developed my own timers and use them to decide when to buy double long ETF's and when to sell. I stick with QLD (2 x the Nasdaq daily) because it works best in conjuction with my US timer. After reading this article I decided to run the numbers and shorting QLD comes out way ahead of buying QID ( -2 x the Nasdaq daily) when I make the timing decisions based on my timer. For example, my timer told me to get out of the US market on 06/11/08. Had I shorted QLD and covered today I would have made 207%. Had I purchased QID and sold today I would have made 72%.

For me the lesson is clear - short the bull 2X ETF rather than buy the bear 2X ETF.

Fred