RM's occasional market calls...

Quote from trendlover:

Pekelo, your dragon pattern is uptrend or downtrend(inverse) true? You can see first the trend, then you look for when is probable to bounce before it go back to long time frame trend, true? So you make the bet on the bounce? With math?
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Here is the thread describing it, should answer most of your questions:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=154290&highlight=dragon+pattern

1. Both. It works with double top and bottoms.
2. You wait for a double bottom or top and see if a Failure happens app. at the half of the Height (of the pattern). If so the math gives you the expected 3rd top/bottom.
3. If by bounce you mean the Failure, you trade the failure and change direction at the 3rd top/bottom too.
4. By math I refer to how the pattern is calculated. (for example 3rd top = Failure + Height)

As a real life example of this ZSL, when I posted first around 11.2 (kind of late in the pattern) one should have been short and expecting it to fall close to 9.8. When we reached 10.25 or so that was a good point to switch to long...

In summary the dragon pattern is a failed double top/bottom, when the trend reverses one more time and makes a 3rd top/bottom, which is easily calculated.
 
Ready for another official RM market call? Here it is:

40% of buying power: Keep in cash/flat
30% of buying power: Long SSO (Current price: $46.63)
15% of buying power: Long DGP (Current price: $39.86)
15% of buying power: Long AGQ (Current price: $139.04)

Right here, right now!
Time frame: Hard to say, but this is a swing trade, same as all the others in this thread. Good luck...
 
Quote from Rearden Metal:

Ready for another official RM market call? Here it is:

40% of buying power: Keep in cash/flat
30% of buying power: Long SSO (Current price: $46.63)
15% of buying power: Long DGP (Current price: $39.86)
15% of buying power: Long AGQ (Current price: $139.04)

Right here, right now!
Time frame: Hard to say, but this is a swing trade, same as all the others in this thread. Good luck...
More...

Trying to think what would inspire that...

Speculating on a flight to safety due to the solar storm? Or Moody's & Ireland. Feel free to ignore my question if it's based on anything you'd like to keep under wraps. I'm basically just curious as to what would warrant that over the weekend.
 
One more thing I should add:

Due to standard ETF decay, there is a slightly more efficient way to put on what amounts to essentially the same position:

Instead of the above trade, you would do:

40% of buying power: Keep in cash/flat
30% of buying power: Short SDS
15% of buying power: Short DZZ
15% of buying power: Short ZSL

This will generally net you a few extra cents when compared to the original position structure laid out in my last post. The only reason I posted longs instead of shorts is because I know not everyone here has access to borrowable shares in these double-inverse ETF's. Another advantage of shorts instead of longs: Prop firms pay interest on shorts and charge interest on longs.

BTW, for 'scoreboard purposes', please consider this to be all one trade (as opposed to three separate trades).
 
The ETF decay comes mostly from the daily re-balancing. If you plan to hold the trades just a day or two it should not be too much of a factor. You can also add/subtract from your position to counteract the ETF re-balancing effect if it becomes meaningful during the course of your trade (but of course this too causes friction).
 
Charts looking decent as of mid-Friday. Well done so far, as usual.

Time will tell what unfolds over the weekend and I'll be watching the news out of interest.
 
Thanks Samsara... I've already put in small limit orders to partial out of <i>some</i> of my gold & silver in case they keep rallying nicely before the day is through. With the SSO, I'm just waiting and watching for now...

Edit: Update- Sold 1/4 of DGP position at $40.34.
 
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