long term position trading -primarily etf's-

[sowterdad]

ETFtrends.com, ETF.com, ETFdb.com- getting a list of source sites-and some free time today-
Had some time to do some reading today- and learning I have much more to learn about ETF's that have been developed that are well beyond the basic vanilla index construction.
I was considering the basic portfolio construction for some retirement monies- Betterment.com offers a low cost approach.....
Watched a bunch of the short interview/video clips- and followed a few of those links-
The ETF industry is changing and developing- and the product list keeps evolving to some pretty sophisticated products- For portfolio construction- or a diversified trading account-
Heged products, Both for equity, currency, and bond exposure- Low volatility funds, Hedged volatility funds- the list goes on.....I know the standard mainstream ETF products serve the purpose at a very low expense ratio- but perhaps some of these newer quant funds that do selection criteria based on performance , periodic rebalancing- may be well worth the slightly higher expense ratio they may charge?
TRSK-from Janus- Large cap exposure with a volatility hedge on the Vix?
Sophisticated stuff- but if it gives one some inherent downside protection- might be worth a look.....
New- From Direxion- "light" leverage funds 1.25% without the more accelerated rebalancing effects-; Might be worth considering as one could possibly hold these for an extended period as part of a portfolio- or longer trade.
I like the concept of Invesco's EQAL- based on the Russel 1,000- that gives equal weight exposure to all nine market sectors- and it is rebalanced quarterly. At a very reasonable .20
expense ratio- The interview clip was 2-10- with Draper, @ ETFTrends.com
While i like the healthcare sector- PSCH includes small cap with exposure to medical device mfg's, Why do I not have some exposure to IXJ? Global healthcare-
The hedged against currency Risk ETF's are products-that may well be the better way to get foreign market exposure? If the Dollar continues to go higher- along with Fed rate increases-
Just some "musings" - on the longer term focus-for allocation-investment.

 

[sowterdad]

This was not a good day to be long biotech-- and Pharma dropped as well.
This sector has not performed well of late- and it's prudent to be cautious here.
All the major indexes were weak. but the Russel 2k took it really hard today- down substantially more than the major indexes--1% .... Very Narrow upside on those areas that did well. Looking at the $NYAD- a lot of red.
PJP stopped out - I had just added 15 shares back- for a total of 45-sold all $78.05 -essentially at my averaged cost. I can feel good about getting out of a position at Break even- With the XBI's wider volatility - I gave it more room- but it was a smaller % exposure .
I took a loss in XBI- I had a $10 trailing stop on the position-
it sold $227.48.
I had left the HEDJ order open- it filled today -$67.82. as it gapped up to open higher- activating my buy-stop, but declined some the remainder of the day.It's making a higher move- back above the ema- The recent swing low sets a move below $66.00 as a need to be out of the trade. I will add to this trade with a buy-stop on a higher move.
EDC- emerging mkt play was the only position gain today of + 1%. I will review my position size and consider if i want larger exposure. I may just add with EEM
QQXT rolled over and dropped today on the 2 hr chart- down 1%- xlk was higher- Thanks to AAPL's good earnings while the XLK- with AAPL a large cap major % held up .28%.
As i am listening to the CNBC pundits this pm- the outstanding AAPL earnings have not seen a big market move- jump higher- AAPL's market cap makes it 15% of the index I think-
Gartman is pointing out that QE is done in the US- we're expecting rate hikes- but he expects the better returns will be coming from overseas- where QE is just starting in the rest of the world's major economies.
The expected higher US dollar will impact companies with world wide sales.
US small caps leading the markets lower-
BRKB- My choice of smart value investing continues lower.

Just around the corner is the Month of May-
Stock picker's market?
Large money's market?
What will be gaining from this day of weakness?

 

[eurusdzn]

Wednesday , is the big day with the FOMC rate decision. Most may look at very strong PA in emerging markets and a weak dollar and point to a dovish fed from the last meeting.
So, will this change Wednesday or will the markets take away a continued green light
for risk? We will see what the action is. I have an open trade in TMV based on last weeks range breakout of rates, but no follow through, and would seem to require Fed hawkish interpretation to work. Just the opposite of what i think will happen Wednesday.

 

[sowterdad]

Wednesday , is the big day with the FOMC rate decision. Most may look at very strong PA in emerging markets and a weak dollar and point to a dovish fed from the last meeting.
So, will this change Wednesday or will the markets take away a continued green light
for risk? We will see what the action is. I have an open trade in TMV based on last weeks range breakout of rates, but no follow through, and would seem to require Fed hawkish interpretation to work. Just the opposite of what i think will happen Wednesday.

TMV moved up 4% today- looks like it wants to go higher, made the upswing closing with .01 of the high- Very solid higher close-

This certainly looks primed to go higher based on today's chart- Good trade on your end-.But I would be considering where your profit objective is.
I would add a caution here- I like the short term chart formation here. It's in a nice saucer formation- which suggests it has made a bottom, and is stair stepping higher- and just surpassed the prior recent high following a retracement back to where it had based for a bit. It should go higher- a perfect set up for a buy-stop momentum up move.
That said- look at the overall predominant trend- Weekly chart going back to 2011
Notice the underlying TYBS - It's declined about 50% since April 2011.
As i look at TYBS on a daily chart- I can't get any volume reading - I don't understand this-
price moved higher- even when I drop down to a 2 hr time frame- I do not see any volume listed- At all- TMV shows just 498k- so, this is a very low volume trade that chart wise looks great- but I would be cautious - and aware that this low volume could make you a lot of money- or lose you a lot- because of the illiquid pricing that may occur on the low volumes- I guess you could monitor the bid-ask and see how it works out...
Another concern about the leveraged ETF's-
Compare the performance of it's 3x counterpart-
In April 2011, TMV lists at $225.00. It's present value is $28.41-
This is an example of why these leveraged ETF's are suitable only for very short term trades. This represents an 87% decline. This is a good example of the decay inherent in leveraged instruments- due to the daily rebalancing I would assume.
So, that being recognized-- TYBS has been basing sideways for several months.
It had a 1st failed reversal and a lower decline- that did not go down to the lower level- So, we have a higher low - and now a potential move a bit higher-
That is Bullish for a short term trade- In times past, I would embrace what i thought were trades showing that the market was making a big turn- but they were short lived- Potentially, this time is different, the basing pattern should be respected- The trade may have found

I would trade this with the thought that on any weakness- it would be prudent to assume the decline would continue- raise the stop. Don't allow it to become a winning trade into an investment. jmo.

EEM does look like it's holding, FED will be passive-Rate hikes will be September or later- Dollar has been in decline for the past few weeks-What is driving the dollar lower? The expectation - and the downside for a lot of US companies was the expectation of a stronger dollar. GLD also up the past few days-


My add buy-stop on HEDJ did not fill, and the original position did stop out today-Europe concerned about the US? I'm getting lots of small cuts, not capturing a decent trend. With an unwillingness on my part to sit through the wider volatility the market is giving, I have to regroup a bit- Can't Buy a decent trend here .....
I was filled on EEM - EDC gained .5% EEM was up .16%.

I'd like to get a sense of where the trending markets are - If there are any- FCX stock is moving higher- commodity in play?
I see BRKB tried to close higher today- Biotech & Pharma sold off-lower today- I actually haven't even looked at the remaining trades-positions- I expect the stops will serve their purpose- I'm intentionally not trying to be reactive- Trades were initially set with some "disaster stops"--- and they are lesser positon sized- so I will feel some pain-
Thanks for sharing & posting!

 

[eurusdzn]

Great take on TMV and levered etfs in general. Have a look at what you already know but is difficult to see. I will post a couple charts of trends in combo positions , nets , or
spreads in Long SPY short FXE and long FXI short EEM.
Now because i can post a hindsight chart of trend does not mean i have made more than a dollar in these ideas over the past year. But , the opportunity was/is there for the betting.
We all do this in our investment accounts and net possibly a dozen position into
an equity so doimg so on two positioms is nothing new.
1) pick an outright winner and a loser where the net of both usually exceeds the net of each over any given timeframe. They are negatively correlated. This one will reference SPY-FXE
2) alleviate fear of a market malfunction, severe volatility, price shock or similar event by again picking a RELATIVE winner and loser where the net of both is usually less than the change of each over all timeframes. They hedge, positive correlate. (China etf could drop one day and it is very likely Emerging markets in general will as well so , short this leg is good). But nothing for nothing, you have to put down twoce as much money to open the position as you would
ona single leg bet AND the net each day is less than the net of each one each day.(not a bad thing on a losing day).
Anyway this is my simple take on a complicated subject. Many, many times i simply abandon this way of thinking an simply take what is easier and more likely correct such as SPY alone.
But, it does expand my options if only i had the time. It seems simply best to not overthink this and take technical signals off a chart i would not have seen before.
There are inverse etfs that can accomplish most of what would like to do but one could use options, futures, shorting etfs as well.

 

[eurusdzn]

Charts are neutral. 5 times as much money would need to be allocated to a leg where
that leg is 20% as volatile as the other leg. The chart does this math and show what otherwise
is not apparent. iEI-TLT is an extreme example and the rarity would be equal volatilities of each leg. I do,my own charting but Stockcharts.com , in the format SPY:FXE, shows combos non
neutral. The dates below my chart do not lineup exact but the data is current and it suits my purpose. My charts always have the value 100 as min valie and the range is pretty accurately
the precentage gain. So,if the chart has a ,max value of 155 then thats about 55% gain.
Note that the two charts that follow are weekly data...about a years worth.

 

[eurusdzn]

These are nice to compare market sectors to see the best performers.
Let me know if you want to see some combos you like.

 

[Swift5]

These are nice to compare market sectors to see the best performers.
Let me know if you want to see some combos you like.

I have trouble to view your chart. It showed only partial on my screen. Any tip for me to see the whole chart?

 

[eurusdzn]

I have an ipad and the charts display fine.

And as the dollar weakness. The last few weeks may or may not correlate to the release of the fed minutes. FOMC announcement followed by FED minutes 3weeks later which can move markets as well. They are relentless. I post too much on your thread so goodnight and i agree with you that shorting tresuries has been a long term losing proposition.

 

[sowterdad]

I have an ipad and the charts display fine.

And as the dollar weakness. The last few weeks may or may not correlate to the release of the fed minutes. FOMC announcement followed by FED minutes 3weeks later which can move markets as well. They are relentless. I post too much on your thread so goodnight and i agree with you that shorting tresuries has been a long term losing proposition.

Late for work this 6 am- Will review all of your comments when I get in this pm- Thanks for posting-
I will put on a small buy-stop entry if TMV moves higher-but understanding it's limitations as
only suited here for a relatively short term trade.