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  • 2 Words Of Caution For The VelocityShares Daily Inverse VIX Short-Term ETN [View article]
    I've taken a liking to XIV, long, but manage my risk with it by going VERY small and only buying in scales after significant weakness, selling in scales after strength, trading it fairly frequently. No stops.

    I never hold a position size in it that I'm not willing to lose all of (though that would still be bad.)
    Aug 25, 2015. 02:00 PM | 1 Like Like |Link to Comment
  • The #1 Stock In The World [View article]
    I know this has been touched (or explained) on in this thread but I'm trying to find out why the VXX is down 7.X % this morning and the XIV is up only 2.X%. They normally correlate oppositely nearly perfectly. Or, I am missing something ....
    Aug 25, 2015. 11:58 AM | Likes Like |Link to Comment
  • The #1 Stock In The World [View article]
    I'm getting a real feel for what XIV does during extremes! Love the volatility on this and the small cash-at-risk you can use in trading it. Tomorrow is another day (so the futures say.)
    Aug 24, 2015. 10:50 PM | 1 Like Like |Link to Comment
  • The #1 Stock In The World [View article]
    I briefly subscribed to a few volatility related services which generated buy/sell signals for XIV, based on a support area for VXX, to oversimplify. For a while recently, it was generating signals every day, whipsawing one around if you took those trades. That is the more typical behavior in a signal like that, I'd guess, and I don't like being stopped out on multiple razor cut trades, frequently. And of course with this mini-melt, their last signal was finally "right." But selling like this does not happen very often.

    But my preferred approach is to scale in long XIV very slowly after weakness, up to some conservative amount (to allow for sell-offs like this one), and then scale out slowly into strength (you know, when it inevitably bounces back up, right?), taking (hopefully) frequent smallish gains. I prefer this approach because it allows me to use the market as a power plant on an "often" basis and keeps my cash-at-risk and inventory small.

    I am not at my maximum long position with XIV yet (though am now underwater but only enough to make my feet hurt a bit) and at this point, I'm not sure what I'd look for to add some more (small) other than some type of XIV bounce back over "some" moving average. But that would probably not be predictive.

    Coming in to the seasonally strong time of the market year shortly but of course, that could be muted by our over-leverage to China (in the longer run, don't mind seeing them knocked down a few notches) and waning company profitability. I'm not a big fan of capitalism as it stands/has evolved and that doesn't make my perspective any easier. Okay, fingers warmed up.
    Aug 22, 2015. 08:20 AM | 1 Like Like |Link to Comment
  • 10% Correction Feels Imminent [View article]
    "If you look at a chart of the HYG and the S&P 500 going back to 2013 you see that high-yield has really underperformed," the CNBC Contributor said in a "Trading Nation" segment. "If you weren't long equities because of the performance in high-yield, you really missed out on a spectacular rally."

    As usual, I'll go with scaling indexes and the coin flip.
    Aug 14, 2015. 10:08 PM | Likes Like |Link to Comment
  • Bloomberg: Apple now aiming for 2016 Web TV service launch [View news story]
    "Bloomberg's sources suggest Apple wants to charge ~$40/month for its service. "

    Uh, no. $40 for cable mini - I don't think so.
    Aug 14, 2015. 10:31 AM | 2 Likes Like |Link to Comment
  • Market Is Poised To Rally - Cramer's Mad Money (8/12/15) [View article]
    Oh. I thought he said, two days ago, (on that the end was nigh. It doesn't matter though - I'll just continue to scale-in and scale-out long, slowly, via indexes, never letting my inventory get too high.
    Aug 13, 2015. 08:53 AM | 1 Like Like |Link to Comment
  • China's Big Bang? [View article]
    Thanks. In other words, buy the index dips in smallish scales, scaling out into strength.
    Aug 11, 2015. 07:57 PM | Likes Like |Link to Comment
  • Natural Gas - Mispriced, Overlooked, And Poised To Rally [View article]
    Thanks for this piece but, yikes, it is so F* complex to these eyes. I'll continue to scale in and out actively, long only, very small via UNG. Just trying to pay the utility bills.
    Aug 10, 2015. 10:52 AM | 5 Likes Like |Link to Comment
  • 10% Correction Feels Imminent [View article]
    I'm not confused by the cap weighted indexes but do trade them because they are stocked with strong companies and are easier to comprehend for me.

    So, the underlying breadth weakness has never bothered me that much.
    Jul 28, 2015. 06:31 PM | Likes Like |Link to Comment
  • 10% Correction Feels Imminent [View article]
    The problem with these type of corrections "predictions" is that the people making them -- see Mark Hulbert -- have been making them for a while and you can assume (if they were really investing their own advice and not just going for page hits and churning out publication pieces) that they have been wrong and underperforming (via indexes anyway) for some time.

    So if and when they are "correct", there is nothing predictive about their predictions because their % is so lousy.

    Now, would 10% correction in this environment surprise me? Not at all, but then again, I always trade the indexes expecting the worst, by using conservative scaling in and out.
    Jul 27, 2015. 08:31 AM | 2 Likes Like |Link to Comment
  • Market Timing Is Not Appropriate For Retired Investors [View article]
    Thanks Chuck. Though not for everyone and involving plenty of (paying attention to the market) personally unproductive "screen time", actively trading indexes (buying after weakness and selling after strength, in scales (plenty of nuance to it though)), some of it intra-day, some of it longer term, is indeed appropriate for this retiree. And that is a form of market timing.

    In that I am NEVER sitting in a large amount of stock relative to my total capital, my black swan (or even gray) risk is much much lower that a buy/hold investor's. I attempt to make up any buy/hold outperformance by taking more frequent, smaller profits (but am still on the side of buy lower/sell higher). In doing that, my bad event risk is reduced considerably.
    Jul 25, 2015. 08:25 AM | Likes Like |Link to Comment
  • UWTI And UGAZ: A Cautionary Tale Of Fortunes Won And Lost [View article]
    Every once in a while -- now, for instance -- I think of trading Nat Gas exclusively, in spite of the recent negative returns. It is volatile but that is good, for active trading, right? "Just" use UGAZ and scale in VERY slowly after weakness, with VERY small position sizing, up to some VERY conservative amount of inventory as price goes against you. Never, ever, go all in - ever.

    One thing about Nat Gas, my guess is that it would do pretty well during most black swan events, even military or terrorist induced though the government might step in and regulate price if something really bad happens.

    Scale out into strength. Very little cash-at-risk if you're doing it right but of course, if price just takes off, you aren't making much because you're not holding a lot. No stops.

    On the stock market index side, you could do something similar with XIV.

    Trading UGAZ with size and stops though? I don't think so.
    Jul 20, 2015. 08:54 AM | Likes Like |Link to Comment
  • The #1 Stock In The World [View article]
    Oh, about a month. :0 Though I've used a similar approach with indexes, for about 17 years. Underperform (but make some money) in straight up moves, outperform in sideways markets, outperform (at the least, lose less, maybe make money) in down markets. A combo of intraday trades and "swings." Use MUCH smaller sizes with the XIV so I suppose it's more candy money. I try and keep total inventories small enough to not use stop losses (except for gradually moving profit stops up as prices rise.)

    The metrics ... well to be honest, it's more about my perception of the overall market posture and bias, along with index "support" areas that I use for guesstimates to scale in slowly after sell-offs, avoiding buying during apparent panic selling. I then scale out into strength.

    I think that most indicators, sentiment, MA's, chart patterns etc, are used to try and assign a level of precision/predictability to the stock market that does not exist. That's it in a very simplified nutshell ... it helps to have some capital to use this approach.
    Jul 18, 2015. 09:18 PM | 3 Likes Like |Link to Comment
  • The #1 Stock In The World [View article]
    I have a library Kindle copy of Hitch-22 waiting for me. Thanks for that post of his Chris (though difficult to read) and the pointer to his other stuff, Allan.

    I am fully in the camp -- though I have minimal experience with it -- of managing risk with XIV via small (with XIV, small is VERY SMALL) position sizing and scaling in and out, but that's how I manage most risk. I hate stops because the price -- in indexes anyway -- ALMOST ALWAYS comes back to your original buy point, eventually. Difficult to ascertain and challenging to patience but it seems that you are better off waiting until after sell-offs to buy. :)

    I "enjoyed" watching that 17% drop in XIV the other week, while holding 100 shares, my first relatively big (temporary) loss with it, which I added to (a guess) somewhere near that bottom of 38 or so, though holding 200 shares almost seemed too much, even for a several hundred K portfolio.

    And yes, during a "Black Swan" it would be very unpleasant to hold any, but all positions get hurt badly, not just XIV. Just keep your total inventory at a # no greater than you can afford to lose all of.

    It seems to be a great vehicle to trade actively, to convert market power into energy/money, though with too much screen time. But I don't have enough confidence in our species and/or global leadership to just hold it for long periods of time, even though I (sort of) understand the theory behind that.
    Jul 17, 2015. 08:40 AM | 3 Likes Like |Link to Comment