Anyone that thinks this is normal movement in the market is clueless… IMHO! This is 100% controlled right now, and by tomorrow the 60 minute chart will have worked off the overbought conditions and ready to rally on Monday. WTF?
Overnight holds are no biggie (obviously the market can still move against you, but the compounding effect is less). I only wanted to point out why they were trading below their February highs, and why expecting them to trade like low-wattage futures is a mistake, a mistake a lot of people made last year.
Yeah, I'm not planning to leave -3X ETFs to my children. However, contrary to popular opinion I think they are a good place to be overnight should the SHTF like I think it might the next few weeks.
The reason the levered ETFs are trading below their previous highs has nothing to do with them being undervalued and everything to do with the way their pricing works. Their leverage is recalculated daily, so in anything except a strong trend they will decay as a mathematical result of their compounding characteristics.
For that reason, they are terrible long-term holds, except in strongly trending markets (e.g., DRN from mid-Feb. to the end of April). If a strong trend take place against a levered ETF, the losses will be magnified beyond their nominal leverage.
I have large amounts of TZA equity, just happened to notice the option price.
$RUT has been hit hard by this market so far, so TZA seems like a pretty good play.
I have noticed that none of the bearish ETFs are anywhere the levels they were when the indexes were in similar straits in February and last fall. To me, this is a sign that we're not done correcting yet.
I'm glad to hear it, and risk/reward is the name of the game. I don't like either on this trade.
You need a 10 percent move in TZA to hit the money, more or less, which means you need IWM to trade around 64 by tomorrow. There's gap support at 65.35 and at 64.94, with the 20dema and 20dsma above and below as additional possible support.
The Russell might fail. Price action today looks fairly supportive to me (the take out of yesterday's lows spurred buying, not selling), but if today's lows are taken out, the bears might yet run.
There are much better risk/reward plays for downside than OTM June options, IMO.
Anyone that thinks this is normal movement in the market is clueless… IMHO! This is 100% controlled right now, and by tomorrow the 60 minute chart will have worked off the overbought conditions and ready to rally on Monday. WTF?
Get ready.
They are going to run this up hard at EOD.
Overnight holds are no biggie (obviously the market can still move against you, but the compounding effect is less). I only wanted to point out why they were trading below their February highs, and why expecting them to trade like low-wattage futures is a mistake, a mistake a lot of people made last year.
Yeah, I'm not planning to leave -3X ETFs to my children. However, contrary to popular opinion I think they are a good place to be overnight should the SHTF like I think it might the next few weeks.
The reason the levered ETFs are trading below their previous highs has nothing to do with them being undervalued and everything to do with the way their pricing works. Their leverage is recalculated daily, so in anything except a strong trend they will decay as a mathematical result of their compounding characteristics.
For that reason, they are terrible long-term holds, except in strongly trending markets (e.g., DRN from mid-Feb. to the end of April). If a strong trend take place against a levered ETF, the losses will be magnified beyond their nominal leverage.
I have large amounts of TZA equity, just happened to notice the option price.
$RUT has been hit hard by this market so far, so TZA seems like a pretty good play.
I have noticed that none of the bearish ETFs are anywhere the levels they were when the indexes were in similar straits in February and last fall. To me, this is a sign that we're not done correcting yet.
1080 looks like a pretty good target, being a 50% correction and having a lot of support on the 15min chart
I'm glad to hear it, and risk/reward is the name of the game. I don't like either on this trade.
You need a 10 percent move in TZA to hit the money, more or less, which means you need IWM to trade around 64 by tomorrow. There's gap support at 65.35 and at 64.94, with the 20dema and 20dsma above and below as additional possible support.
The Russell might fail. Price action today looks fairly supportive to me (the take out of yesterday's lows spurred buying, not selling), but if today's lows are taken out, the bears might yet run.
There are much better risk/reward plays for downside than OTM June options, IMO.
be careful with H & S because these days the success percentage is less than 50%
There's another formed over the past week, with the neckline 1090-ish.
Sounds good!