Comments on: The Bulls Are Running Again… http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/ Sun, 01 Aug 2010 10:52:22 +0000 hourly 1 http://wordpress.org/?v=3.0 By: Red Dragon Leo http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/comment-page-1/#comment-5041 Red Dragon Leo Thu, 04 Feb 2010 06:26:49 +0000 http://reddragonleo.com/?p=1168#comment-5041 Any 2x or 3x etf is only good when you have a large move in one direction or the other. During the consolidation periods, they all erode and fall lower, if when the underlining stock that it follows is flat.<br><br>I lost a lot of money on FAZ, and if I every did play them again, I'd only go short... never long. That way, even if the market starts going sideways for awhile, your etf will gradually fall lower. It's designed that way, so you have to take that into account before you take a position in one.<br><br>If you think the market is going up, you would go short on the bear etf (which is basically going long), and if you think the market is going down, then you would short the bull etf. <br><br>Time decay wouldn't hurt you as much, as they would naturally start to fall if the market trends sideways before it makes the move you want it too.<br><br>Hope that makes sense? Any 2x or 3x etf is only good when you have a large move in one direction or the other. During the consolidation periods, they all erode and fall lower, if when the underlining stock that it follows is flat.

I lost a lot of money on FAZ, and if I every did play them again, I'd only go short… never long. That way, even if the market starts going sideways for awhile, your etf will gradually fall lower. It's designed that way, so you have to take that into account before you take a position in one.

If you think the market is going up, you would go short on the bear etf (which is basically going long), and if you think the market is going down, then you would short the bull etf.

Time decay wouldn't hurt you as much, as they would naturally start to fall if the market trends sideways before it makes the move you want it too.

Hope that makes sense?

]]> By: Captain_Koons http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/comment-page-1/#comment-5039 Captain_Koons Thu, 04 Feb 2010 03:03:24 +0000 http://reddragonleo.com/?p=1168#comment-5039 In the area where I live, which is the Southeast US, things are getting worse, not improving. Unemployment is increasing and the housing market is about ready for the next leg down. Many banks have not forclosed on properties that are 12 months behind on payments. The lenders already have too many foreclosed properties up for sale. It's not looking good from my perspective. In the area where I live, which is the Southeast US, things are getting worse, not improving. Unemployment is increasing and the housing market is about ready for the next leg down. Many banks have not forclosed on properties that are 12 months behind on payments. The lenders already have too many foreclosed properties up for sale. It's not looking good from my perspective.

]]> By: Rick http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/comment-page-1/#comment-5040 Rick Thu, 04 Feb 2010 02:49:17 +0000 http://reddragonleo.com/?p=1168#comment-5040 Red, yor sure don't hedge your predictions (like some). What do you think of beat up etfs like FAZ, SKF or VXX? Downside appears low even if wrong. Red, yor sure don't hedge your predictions (like some). What do you think of beat up etfs like FAZ, SKF or VXX? Downside appears low even if wrong.

]]> By: Red Dragon Leo http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/comment-page-1/#comment-648 Red Dragon Leo Thu, 04 Feb 2010 00:26:49 +0000 http://reddragonleo.com/?p=1168#comment-648 Any 2x or 3x etf is only good when you have a large move in one direction or the other. During the consolidation periods, they all erode and fall lower, if when the underlining stock that it follows is flat.<br><br>I lost a lot of money on FAZ, and if I every did play them again, I'd only go short... never long. That way, even if the market starts going sideways for awhile, your etf will gradually fall lower. It's designed that way, so you have to take that into account before you take a position in one.<br><br>If you think the market is going up, you would go short on the bear etf (which is basically going long), and if you think the market is going down, then you would short the bull etf. <br><br>Time decay wouldn't hurt you as much, as they would naturally start to fall if the market trends sideways before it makes the move you want it too.<br><br>Hope that makes sense? Any 2x or 3x etf is only good when you have a large move in one direction or the other. During the consolidation periods, they all erode and fall lower, if when the underlining stock that it follows is flat.

I lost a lot of money on FAZ, and if I every did play them again, I'd only go short… never long. That way, even if the market starts going sideways for awhile, your etf will gradually fall lower. It's designed that way, so you have to take that into account before you take a position in one.

If you think the market is going up, you would go short on the bear etf (which is basically going long), and if you think the market is going down, then you would short the bull etf.

Time decay wouldn't hurt you as much, as they would naturally start to fall if the market trends sideways before it makes the move you want it too.

Hope that makes sense?

]]> By: Captain_Koons http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/comment-page-1/#comment-647 Captain_Koons Wed, 03 Feb 2010 21:03:24 +0000 http://reddragonleo.com/?p=1168#comment-647 In the area where I live, which is the Southeast US, things are getting worse, not improving. Unemployment is increasing and the housing market is about ready for the next leg down. Many banks have not forclosed on properties that are 12 months behind on payments. The lenders already have too many foreclosed properties up for sale. It's not looking good from my perspective. In the area where I live, which is the Southeast US, things are getting worse, not improving. Unemployment is increasing and the housing market is about ready for the next leg down. Many banks have not forclosed on properties that are 12 months behind on payments. The lenders already have too many foreclosed properties up for sale. It's not looking good from my perspective.

]]> By: Rick http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/comment-page-1/#comment-646 Rick Wed, 03 Feb 2010 20:49:17 +0000 http://reddragonleo.com/?p=1168#comment-646 Red, yor sure don't hedge your predictions (like some). What do you think of beat up etfs like FAZ, SKF or VXX? Downside appears low even if wrong. Red, yor sure don't hedge your predictions (like some). What do you think of beat up etfs like FAZ, SKF or VXX? Downside appears low even if wrong.

]]> By: Crash Gordon http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/comment-page-1/#comment-645 Crash Gordon Wed, 03 Feb 2010 17:10:01 +0000 http://reddragonleo.com/?p=1168#comment-645 not just the Elliot Waves and technicals that show things paddling down Hogan's Alley - I have never seen so many stocks so expensive compared to earnings before fundamentally its been a ponzi scheme since like last summer. <br><br>The greater fool theory has been rampant for too long now the only thing is that the risk of ending up being the greatest fool landed with worthless stocks when it inevitably corrects rules me out of any long positions not just the Elliot Waves and technicals that show things paddling down Hogan's Alley – I have never seen so many stocks so expensive compared to earnings before fundamentally its been a ponzi scheme since like last summer.

The greater fool theory has been rampant for too long now the only thing is that the risk of ending up being the greatest fool landed with worthless stocks when it inevitably corrects rules me out of any long positions

]]> By: Red Dragon Leo http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/comment-page-1/#comment-644 Red Dragon Leo Wed, 03 Feb 2010 14:31:15 +0000 http://reddragonleo.com/?p=1168#comment-644 It's the way the elliottwave patterns are lining up. Wave 3's are super powerful, and that's what is coming up next. By looking at the charts, I think we will peak on February 8th-9th for the larger wave 2 up... which is happening right now.<br><br>We could be up to 113-114 spy by next Monday or Tuesday. Then the wave 3 down will start and should take us down to around 1030 by opx. It will go hard and fast, as all wave 3's do.<br><br>I guess you could call it a mini-crash as a 100 point drop isn't exactly a "Crash", but it's still a scary drop... if you're caught long of course. It's the way the elliottwave patterns are lining up. Wave 3's are super powerful, and that's what is coming up next. By looking at the charts, I think we will peak on February 8th-9th for the larger wave 2 up… which is happening right now.

We could be up to 113-114 spy by next Monday or Tuesday. Then the wave 3 down will start and should take us down to around 1030 by opx. It will go hard and fast, as all wave 3's do.

I guess you could call it a mini-crash as a 100 point drop isn't exactly a “Crash”, but it's still a scary drop… if you're caught long of course.

]]> By: Michigan http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/comment-page-1/#comment-643 Michigan Wed, 03 Feb 2010 13:13:42 +0000 http://reddragonleo.com/?p=1168#comment-643 CRASH!! .... WHY?<br>Why do you expect crash, when all things are getting better including employment. CRASH!! …. WHY?
Why do you expect crash, when all things are getting better including employment.

]]> By: Red Dragon Leo http://reddragonleo.com/2010/02/02/the-bulls-are-running-again/comment-page-1/#comment-642 Red Dragon Leo Wed, 03 Feb 2010 02:23:24 +0000 http://reddragonleo.com/?p=1168#comment-642 Well March is the safer month to buy, but my forecast tells me that it will start moving down by Tuesday the 9th. The move should be fast and hard, with the first major stop around 1030-1040 area.<br><br>I'm expecting it to hit that level on, or before the February option expiration date of the 19th. So, for me at least, I'm buying the February puts as I don't believe I'll need that much time for the fall to play out.<br><br>It's up to you, and risk tolerance, as to which month to buy. But, I'm expecting a bounce back up from the 1030-1040 level. That could bounce back as high as 1100... it's hard to tell at this stage, but after that bounce, you can expect more selling into March.<br><br>I looking for the 910-930 area as the final bottom before a larger spring/summer rally to happen. It should be choppy and hard to trade, as I expect it too take its' sweet little time going back up.<br><br>Then late in September or so, I'm expecting another crash down. That will be the big one! I suspect that it will re-test the March 2009 low of 666. It might not take it out this year, but next year is going to be hell for the bulls. Well March is the safer month to buy, but my forecast tells me that it will start moving down by Tuesday the 9th. The move should be fast and hard, with the first major stop around 1030-1040 area.

I'm expecting it to hit that level on, or before the February option expiration date of the 19th. So, for me at least, I'm buying the February puts as I don't believe I'll need that much time for the fall to play out.

It's up to you, and risk tolerance, as to which month to buy. But, I'm expecting a bounce back up from the 1030-1040 level. That could bounce back as high as 1100… it's hard to tell at this stage, but after that bounce, you can expect more selling into March.

I looking for the 910-930 area as the final bottom before a larger spring/summer rally to happen. It should be choppy and hard to trade, as I expect it too take its' sweet little time going back up.

Then late in September or so, I'm expecting another crash down. That will be the big one! I suspect that it will re-test the March 2009 low of 666. It might not take it out this year, but next year is going to be hell for the bulls.

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