November 30, 2008
ETF Newsletter in the Email (#4 Freebie)
Yes, it’s that time of the week again, time to pimp my newsletter, shamelessly.
This week I’ll feature the Steel ETF (SLX). The model exited in July 2008 above $90 and is still out (last week’s close: $27.88). The model also exited the Basic Materials SPDR (XLB) and the Ultra Basic Materials (UYM) the very same week — sure, they’re all highly correlated, but it’s interesting to see how Metals & Mining (XME) and Coal (KOL) hung in there for another week or two before also reversing.
There will only be one more freebie newsletter since I’ll be going away for Christmas in early December and won’t be back until the New Year, so email me today to get on the list.
Cat: | Time: 4:33 pm (utc+8)
November 30th, 2008 at 4:58 pm
Please add me to the newsletter!!
November 30th, 2008 at 9:40 pm
Chairman,
I appreciate your newsletter, thank you.
Your UYM short position generated over 80% return, having fallen since July. Is not the risk/reward of holding the position getting unattractive now? I mean theoretically it could fall to zero, but the chances of a steep reversal are also there. Locking in an 80+ percent profit could be a reasonable step. Or you close a short position only when you get a buy signal, i.e. you always have either a long or a short position in an ETF?
November 30th, 2008 at 9:45 pm
@Andras: I only close it when it reverses … I’m not sure if I’m going to be in the market always … I’ll probably favor one side or the other with the real money portfolio, but we’ll see… it’s all a work in progress.
December 1st, 2008 at 1:51 am
Thanks for the answer. Can you say anything about expected returns (or your past returns) with this strategy? I absolutely understand if you are hesitant to discuss such numbers, but even a rough range (up to 30% or 30-60% etc) would provide useful orientation when it comes to subscribing.
December 1st, 2008 at 4:05 am
seems like fat-tail time regarding a backlooking trend method on these etf’s. i imagine after enough people get enticed the overall market will go chop mode for an extended period of time until most get fustrated and go to some sort of fade/range system
December 1st, 2008 at 8:07 am
@pete: You may be right, and once again my timing may be exactly wrong. :-)
December 2nd, 2008 at 9:36 am
Fuzzy is doing fine. The short ETFs launched off the rising trendlines perfectly. SKF +29%,SDS +17% To quote Jackie Gleason “And away we go!”. Watching SRS for more fireworks. Watch your topknot. :-)
December 2nd, 2008 at 9:57 am
@Hudson: I’m still not comfortable with the moves (both up and down) that those levered ETFs produce, and will no doubt include none of them in the “core.” Great daytrading vehicles though, no?
December 2nd, 2008 at 10:43 am
Today sure was, but the SDS rallies so far have averaged 7 - 14 days so it can be a swing trade if you can stand it. I agree they will be a pain as part of the core, especially after this bear market ends.