ETF

When Jim Rogers Speaks . . . .

Jim Rogers is one of the kings of trading (though he probably thinks of himself as an investor).  So when he says something, the wise trader should at least cock their ear in his direction.

But the wise trader will also bear in mind that Rogers is Fundamentalist, and timing a trade on fundamentals has a way of requiring much more courage than this timorous trader can usuall muster.  So take a peek at what he has to say here, and if it makes sense to you remain on the lookout for some substantial Technical trigger before taking his advice (that’s my advice, at least).

 

Short US Government Bonds ‘Right Now’: Jim Rogers

Published: Thursday, 7 Feb 2013 | 4:53 PM ET
By:

With the Federal Reserve and now Bank of Japan printing massive amounts of money, billionaire investor Jim Rogers told CNBC’s “Closing Bell,” he is shorting U.S. government debt.

“It’s all artificial what’s going on right now,” Rogers said. “The Federal Reserve is printing money as fast as they can. The Bank of Japan said ‘we’re going to print unlimited money.’”

He called the Fed’s monetary stimulus “outrageous.”

– Article Continues Below –


All that money printing has Rogers bearish on U.S. Treasury debt. He said he’s shorting government bonds and that if it’s indeed the end of the 30-year bond bull market, those shorts will pay off. In particularly he said it’s time to short long-dated U.S. government debt.

“Stocks may go up too, but I don’t know how this can last too long,” he added.

While Rogers is negative on the U.S. stock market and said he’s been short Apple since the fall, he sees better opportunities in Japan and Russia.

The Bank of Japan’s money printing is not good for the world he said, but it’s making markets go up. “The yen is collapsing, but the stock market is going through the roof,” Rogers said.

And while the Federal Reserve is also printing money through its quantitative easing program, Rogers noted that the U.S. equity market is flirting with all-time highs, while Japanese stocks are down 75 percent from their all-time high. . . .

See the rest of this execellent article here . . .

 

Friday, February 8th, 2013 Commodities, ETF, Jim Rogers No Comments

Volatility Trading Strategy from Larry Connors

 Larry Connors is the KING of mean reversion trading strategies, and this article reinforces that royal standing.  :)   In a nutshell, volatility – as a phenomenon – can swing higher and lower in the short term, but it strongly gravitates toward its own comfort zone.  That zone, the average (or mean), can move higher or lower over longer periods of time, but in the short to medium term time frame, it is where the volatility will hover.   This trading strategy is a good way of taking advantage of this reality.
 
One note though, and I’m a bit surprised that Mr. Connors didn’t make this explicit: this is a one direction strategy.  In the setup he discusses using RSI(2) over 90 as the trigger, and often an experienced trader will understand that an inverse strategy would work at the other end of the RSI spectrum.  But not in this case.  Primarily, this is because the VXX (the ETF being traded here) is continually falling (check out a year chart to see what I mean), so trying the same thing from the RSI(2) < 10 side of things is NOT indicated. 
 
With that caveat in mind, please read and enjoy!
 


 

A Low Volatility Strategy for Trading High Volatility

By Larry Connors | TradingMarkets.com | July 13, 2012 09:06 AM
 
 

 

We’re going to show you a volatility trading model for VXX which has correctly predicted the price of VXX 97.3% of the time since VXX started trading in 2009. The test results are up through the end of May 2012.Trading volatility, especially VXX, has become a big game among professional traders. You only have to look at the continuously rising average volume in VXX, combined with the many new volatility products that have been coming to the market over the past year, to know that volatility is beginning to join the ranks of other asset groups such as stocks, ETFs, options, forex, and futures.Much has been written about how to trade VXX; unfortunately the majority of the early volatility trading strategies were incorrect. Too many people were comparing VXX to VIX and had considered them the same instrument. They’re not.VIX is an index that settles on a value each day based on the underlying vehicles in the index. VXX is the expected future value of where traders believe volatility will be in the near-term future. One is today’s value (VIX). The other is the marketplaces prediction of where these prices will be in the future (VXX).

There are certain characteristics of volatility which are inherent (and sometimes in conflict with each other). The academic world has shown decades ago that volatility is mean reverting. When volatility gets too far away from its average price over a period of time, it tends to reverse back to its average . . . .  read the remainder of this excellent article here


Short Squeezes, Turnaround Tuesday and ETF Day Trading


Remember the article last week in which Larry Connors warned of impending short squeezes?  That is part of what hit yesterday – the bear is still roaring, so use this opportunity to look for short entries.  Just be careful and stay timid!
By Larry Connors | TradingMarkets.com | October 05, 2011 08:57 AM
 

That was a terrific 400-point reversal yesterday and the market is now back in neutral territory with the 2-period RSI of our Country Fund ETF Universe at 40.18 and the Main ETF Universe at 48.22.

Yesterday’s rally was a very normal, bear market, short squeeze rally where they allowed the shorts to pile in the previous few days and even further in the morning and then, from a rumor about a bailout of Europe, the buyers came in (some with fresh money but likely even more from panicked short sellers).

Again this is normal and if it follows a traditional path, it could go a few days. If this does occur, we’ll look to be heading into the weekend with some indices short positions. In the meantime, the longer term trend is down, we have the Advanced Micro Devices (AMD | PowerRating) and Direxion Financial Bull 3x Shares (FAS | PowerRating) positions with options, and we’re in a good position no matter which direction the market takes for the remainder of the week.

Special Notice – Today at 1 pm ET I will be doing a 30 minute webinar discussing an ETF Day Trading Program we’ll be teaching at the end of the month. This program has historically thrived in high volatility environments like the one we’re in now and yesterday alone in actual trading there were accounts (in real time) which saw gains of 10% and higher.

If you would like to attend today’s ETF Day Trading webinar (or receive a copy of the recording), please call our office this morning at 973-494-7311, ext. 1.

The above is from Larry Connors’ Daily Battle Plan.

To learn more about the Daily Battle Plan, click here for more information.

Larry Connors is founder of TradingMarkets.com

Wednesday, October 5th, 2011 ETF, Larry Connors, Stock Trading No Comments

Cramer: Off the Charts: Tech-Buying Season

Jim Cramer does a decent job of analyzing the relative performance of SOXX vs. QQQ, and discussing what that might mean for the next few weeks / months in the tech markets.




Wednesday, September 14th, 2011 Education, ETF, Jim Cramer, Stock Trading No Comments

Price vs. Time-Based Pullback Strategies



Buying pullbacks based strictly on price levels isn’t working at all these days, thanks to HFT domination. We saw a great example on Tuesday, with the SP-500 undercutting natural support near 1150, shaking out deep dip buyers, and then miraculously closing back above support.  The same thing is happening with individual stocks, which are ripping right through support levels that would have held just fine in May or June. But wait a day and, presto chango, the stocks pop back above those broken levels.

This algo-driven stretch in support and resistance requires that traders shift from price-based into time-based pullback strategies, in which tiered buys are entered when the major indices and the broad market hold their lows and then cycle higher (and vice-versa for short entries). It also means holding your nose and buying stocks that have broken support levels, assuming that new support will set into place during the next up cycle.

If you’re a swing trader, I recommend keeping a close watch on the daily 5-3-3 index Stochastics, which do a great job identifying 3 to 5 day price swings. Day traders can shift down to 60-minute charts, using the same Stochastics settings.

Finally, keep on watching the 50-bar and 200-bar EMAs on the 60-minute SP-500 index futures 24-hour session chart. These levels have been absolutely golden, issuing major tell after major tell in the last six weeks.

 

 

 

 

http://www.hardrightedge.com/edge/

Thursday, September 8th, 2011 Alan Farley, Education, ETF, Stock Trading No Comments

Larry Connors: How to Sell ETFs Short 101

By David Penn | TradingMarkets.com | September 06, 2011 11:57 AM
 

 


How many ways were there to sell short the S&P 500 last week, as the market climbed deeper and deeper into overbought territory below the 200-day moving average?

Whether your trade of preference was the SPDR S&P 500 ETF (SPY | PowerRating) or, for those in restricted accounts, the SPY’s inverse, the ProShares Short S&P 500 (SH | PowerRating), the results on Friday were the same: another profitable trade for short term swing traders trading ETFs with Larry Connors’ Daily Battle Plan.

SPYDBP0906 chart

As Larry wrote in a four-part series for TradingMarkets.com earlier this year.

What we want to do, and what you want to do as a trader with your own money, is ultimately to be able to have certain rules in place to help you answer the questions: is a market in an uptrend? Is a market in a downtrend? And how do I appropriately allocate capital during each of those markets?

To read the rest of Larry’s four-part series on ETF Trading and the Daily Battle Plan, click here.

This last trade in the S&P 500 was a textbook high probability trade from Larry Connors’ Daily Battle Plan. Correct 80% of the time since inception in October 2008 – and with an accuracy rate of 80% in 2011, as well – Larry Connors Daily Battle Plan is a great way for traders way to add a quantified, long and short, ETF trading strategy to their overall swing trading portfolio (and if you are not trading more than one strategy in your portfolio, click here to read “Why a Portfolio of Strategies Beats a Portfolio of Stocks.”).

If you are looking to start trading exchange-traded funds, then Larry Connors’ Daily Battle Plan is a great place to start. Click the link below to launch your free, 7-day trial to Larry Connors’ Daily Battle Plan today.

David Penn is Editor in Chief of TradingMarkets.com

 
Tuesday, September 6th, 2011 ETF, Evergreen, Larry Connors, Stock Trading No Comments

Pair Stock With ETF to Capture Yield, Growth

ByRoger Nusbaum, Contributor to TheStreet , On Tuesday August 30, 2011, 9:12 am EDT



NEW YORK (TheStreet) — Dividend investing is becoming increasingly popular as the U.S. equity market continues to log more years without meaningful advancement. Too many people make the mistake of seeking out yield at the expense of price appreciation which is a big mistake. Investors can use both ETFs and individual stocks to construct a narrow-based portfolio that captures both yield and growth potential.

The materials sector is a good place for this exercise as it takes in a lot of themes, brings in a lot of different foreign countries with favorable attributes and has good, long-term prospects behind it — in my opinion that makes it a good sector to add volatility to the portfolio.

The materials sector has a very small weighting in the S&P 500 so it is unlikely that someone would need to pick six different holdings, two could easily do it. There are not a lot of big dividend payers in this sector but there are some.

There is not much yield to be had from any of the broad-sector ETFs. The iShares S&P Global Materials Sector ETF yields about 2.2% but that is only a little more than the S&P 500. As a note, the Materials Sector SPDR shows a trailing yield of 3.7%, however this appears to be skewed by an usually large dividend last September. For a comparison, the very similar iShares DJ US Materials Sector Index Fund yields about 1.5%.

>> Keep the stock market at your fingertips with TheStreet’s iPad app.

So the idea is to pair one ETF and one common stock with some yield, such that the combo yields an average that is greater than the market — I think adding 100-150 basis points in yield above that of the SPX can still allow a portfolio to be reasonably diversified and capture some good yield which is very important over the long term.

As alluded to above, in choosing a materials sector ETF, I would want something I felt would capture the global theme, or some relatively important slice of the global theme, and some volatility. One example in a broad-based fund is the EG Shares Emerging Markets Metals and Mining ETF . It is heavy in China, Brazil, South Africa and Russia. The countries are far from one-way trades, but there is a lot happening in the sector with all of these countries. Longer term it would be reasonable to think that if things work out for the materials sector, they would work out for EMT as those four countries continue to be important.

A narrower example could be the Global X Silver Miners ETF . Again just an example, there are many other specialized materials sector ETFs to go with instead of SIL.

The two funds provide valid access to the sector, one way or another, have each done differently over the last 12 months (SIL up a lot and EMT up a little) but neither has paid much of a dividend, 1% give or take. That there is not much yield is not a bad thing if they deliver some magnitude of the growth they have delivered over the past few years. Demand for resources globally and the ongoing infrastructure build out in many countries creates visibility for the sector will continue to provide meaningful price appreciation.

One example of a stock with a yield that could work here is Southern Copper ). The stock has been around for a while and even though there were a couple of small dividends in 2009 the company has proven it is committed to paying a large dividend with the yield currently at 7.7%. The dividend has been lumpy and should continue to be lumpy as the company is obviously beholden to copper prices. Over the last five years the stock is up 107% compared to about 25% for MXI and a decline of 7.5% for the SPX — none of those figures include dividends. The 107% is nice of course but it should be noted that SCCO fell far more than MXI or SPX from the 2007 peak.

The company has generally tracked the price of copper (both are quite volatile) so barring some major management goof it is likely to continue to track the price of copper for better or for worse and while the dividend is not a certainty the company’s track record for this is good.

The idea would not be to blindly buy a couple of things mentioned in an article but to do your own research to seek out what segments, funds and stocks resonate with you. Be careful not to make dividends the top priority as this leads to yield chasing, which often ends very badly. But if handled well, this type of combination can produce a yield far above the broad market.

 

 

http://finance.yahoo.com/news/Pair-Stock-With-ETF-to-tsmf-2693345094.html?x=0&.v=1

Wednesday, August 31st, 2011 ETF, Evergreen, Stock Trading No Comments

John Murphy’s Key to Success: Simplicity

by JimWyckoff

 
“My work has gotten better due to simplifying my approach,” John J. Murphy, the veteran technical analyst, author and CNBC resident technical analyst, told a group of equities and futures traders attending the Technical Analysis Group (TAG) XVIII trading conference sponsored by Dow Jones Telerate in New Orleans.

Murphy said he relies heavily on five or six “useful” technical indicators, including relative strength indicators, trendlines, moving averages, Bollinger bands, classic chart patterns such as triangles and double tops, and Fibonacci retracement levels.”You must trade a combination of technical signals, not just one” indicator, said Murphy. He said that many times he’ll set up a “good” column and a “bad” column regarding technical studies. If the “good” column has the overwhelming evidence supporting a selected trade, Murphy will enter the trade. But if the evidence supporting a trade is not strong enough, he’ll bypass the trade.

Murphy correctly called the topping of the U.S. semiconductor stock index (SOX) during midsummer (of the year this story was written). His reasoning was plain and simple: the SOX uptrend line was broken, followed by a double-top formation. “The first sign of a top is breaking of an uptrend line,” he said.

On moving averages for individual stocks, Murphy likes to use the 50-, 100-, and 200-day moving averages. If the 200-day moving average on an individual stock is broken on the downside, “big trouble” is in store for that stock. Also for stock sectors, he said if a 50-day moving average breaks down, “that sector is in trouble.”

Charting a stock market sector divided by the S&P 500 is a favorite method the veteran technician uses to determine if a given sector is underperforming the broad market. (Examples: SOX index divided by S&P 500 index, or NASDAQ index divided by the S&P 500 index.)

Another good technical indicator is the Moving Average Convergence Divergence (MACD), said Murphy. The MACD uses exponential moving averages, as opposed to the simple moving averages used with an oscillator. Gerald Appel is credited with developing the study.

Longer-term technical signals are more powerful than shorter-term signals, said Murphy. “Longer-term charts give you the value of perspective,” he said.

Many traders consider Murphy’s book, “Technical Analysis of the Futures Markets” to be the bible of technical analysis.Murphy heads his own consulting firm, based in Oradell, N.J.

 

http://www.traderplanet.com/articles/view/16-john_murphy_s_key_to_success_simplicity

Why I Add to Winning Positions

By Walter Peters | TradingMarkets.com | April 05, 2011 01:40 PM
 

 

Many traders find a great trade setup; take the trade, and then watch. If the trade goes in the opposite direction – if the trade does not do well many traders will consider adding to the position.

Averaging down, adding to a losing position, it does not matter what it is called, it is basically taking more of a losing position. It is no different than making reservations for a restaurant that you don’t like because the food made you ill and the staff was rude. It sounds funny but it is true. By adding to a losing position you are asking for more of what you don’t like.

Now, let’s consider this scenario. Let’s say that you make reservations for a restaurant, you show up to find your table waiting for you, the staff are wonderful and the food is great. Would you only eat an appetizer because you didn’t want to “ruin the experience?” Would you leave early because you don’t want to have “too much of a good thing?”

You probably wouldn’t if you are like most people.

But this is exactly what many traders do – they add to losing positions (often maximizing the loss) and they rarely add to positions that immediately go in the expected direction.

Think about what that means for your trading account. That means that when you are right you are not maximizing profits and when you are wrong you are increasing your losses.

One great way to increase your profits is to add more positions as the trade goes in the expected direction. This is a lot like making reservations for that great restaurant – you know the food is good and you want some more!

Many traders can exponentially improve their profits by simply adding to winning trades and resisting temptation to add to losing positions.

EUR/JPY Chart

Here is an example from this week. With this trade I sold the EUR/JPY at 137.00 and targeted the red line down at 136.00. I could have simply sold the EUR/JPY and waited for the market to hit 136.00 – and then I could congratulate myself and be very happy since the trade made 100 pips. But instead, because the trade went in my direction I added to the trade and made 280 pips instead. This is how it unfolded. I took one position at 137.00 and then I put additional sell orders in at 136.50 (one position), 136.40 (one position), 136.30 (one position), 136.20 (two positions) and 136.10 (two positions).

Additional sell orders Chart

Instead of 100 pips on the winning trade I had several positions 100+50+40+30+(20×2)+(10×2) = 280 pips. Notice how I did not immediately add to the trade, but instead decided that if the trade went 50 pips in the expected direction I would allow the additional sell orders to kick in.

Target Hit Chart

What would have happened had this trade immediately gone against me? Well, I would have only lost on the first position, thereby limiting my losses. I think it is important to wait for the market to give you feedback before you start adding to a winning position, so I always place additional orders at least 50% closer to the profit target than the initial position.

Think how much more money you would make if your losing trades were more than 87% smaller than your winning positions … it is a lot like making reservations for that excellent restaurant, over and over again.

Walter Peters, PhD is a professional forex trader and money manager for the DTS private fund. In addition, Walter is the co-founder of Fxjake.com, and often coaches other traders. If you would like to learn more about Walter’s trading strategies, take a look at Walter’s upcoming webinar.

Just released! Leveraged ETF PowerRatings ranks Leveraged ETFs on a high probability 1-10 ratings scale. Click here to get your free trial now.

 
Original publication: October 29, 2009
 
>> See more articles by Walter Peters
Thursday, August 18th, 2011 Education, ETF, Evergreen, Forex Trading, Stock Trading No Comments

ETF Trading with Larry Connors: Bear Market Behavior Taking Hold of the Markets

By Larry Connors | TradingMarkets.com | August 18, 2011 08:49 AM
 

 

An overnight, global sell-off is weighing on the futures early this morning as the bear market behavior begins to take hold. With so many stocks under their 200-day ma, the path of least resistance is down until a reversal occurs.

For those of you trading from the signals within The Machine, you’re beginning to see the healthy gains on the short positions – especially in stocks. This would be expected especially this early into the bear cycle as its beginning to replicate the same behavior seen in 2001-2002 and also 2008.

The market is likely going to require some sort of major event, either political or a string of unexpectedly strong economic reports, to reverse course from here.

The above is from Larry Connors’ Daily Battle Plan.

To learn more about the Daily Battle Plan – including access to Larry’s daily ETF trading signals, click here for more information.

And for more on ETF trading, be sure to visit us here to check out the book that Stocks, Futures and Options (SFO) Magazine called one of the best trading books of 2009: High Probability ETF Trading: 7 Professional Strategies to Improve Your ETF Trading.

Larry Connors is founder and CEO of TradingMarkets.com.

 
 
Thursday, August 18th, 2011 Education, ETF, Larry Connors, Stock Trading No Comments