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The fact that you cannot beat the S&P 500 without taking on additional risk has, as of yet, not been refuted.

I think that most who fail in trading options think they will win in the long term buy buying cheap options. Don't skimp on options that will expire next week (if need be buy LEAP options). Also, options should only be used with the strongest signals (i.e. a few times a year).

Thank you for this thoughtful post! By blowing up, I was refering to the ETF fund disappearing. BGU gets its leverage by using credfit swaps and seems to be exposed to counterparty risk. (is this accurate?) It may seems as though I am comparing apples to oranges, and in a way you are...

BGU moves as much as some small-caps out there. Since one can't cheat the R:R ratio, this would mean that one is taking small-cap level risk (i.e. blow up risk). Is this correct? What are the chances of BGU blowing up?

Is this part of your new value investing strategy?

So, since you are now a value investor how about some buy signals like the ones you gave when you were still a short term trader?

There is another possibility: Long term TA trading. To think that fundamentals drive stocks (or anything else for that matter) in a high liquidity/credit environment is naive to say the least. The FA stock game is as rigged (if not more so) than the day trading game. There are plenty of players...

The USD will collapse because of the unwinding of the carry trade? Huh? The USD is used to fund the carry trade!

Because you can leverage without ever getting a margin call.

Or a retracement of the NEW trend.

The amount of leverage really isn't the issue. As long as it's a bit more volatile than the S&P 500 (this thing is really a dinosaur).

I was considering the leveraged ETFs since they don't have the following two problems: 1) Can't blow up margin account, since leverage is already 'in' the instrument. 2) Don't expire like options do. And no strike price needs to be chosen in order to gain leverage. What are the...

Well, the assumption was long, but point taken.

Which way would you recommend and why?

No that's fact.

I keep hearing that the ES (SP500) is the most manipulated instrument out there? How can that be since it has the most volume? If anything, I think that individual small caps would be the easiest to manipulate.

But you do need liquid credit markets.

Wrong. There was a chance of deflation, but it was stoped with low interest rates. But now we have low interest rates + dried up credit markets. There is a difference.

It's an expression, but you knew that. The same applies to tops, of course. Btw, please stop refering to yourself in the 3rd person. It makes me when to crush your face. :p

Picking bottoms will get you stinky fingers, my friend.