5/10What is the GMI?
As you know, when I try to trade the trend of the QQQQ, I buy QLD (ultra long) or QID (ultra short) ETF’s. These ultra ETF’s are designed to move twice as much as the underlying index they track. Well, less well known is that there now exist 3x ETF’s, designed to move three times as much as the underlying index. I knew about the recent emergence of these Direxion ETF’s, but was surprised to see how quickly they have caught on. I have now located 16 of them, and 8 of them traded more than one million shares each on the NYSE on Friday. Here are the ones I have found. Bull ETF’s: FAS, BGU, TNA, ERX, EDC, MWJ, TYH, and DZK. Bear ETF’s: FAZ, BGZ, TZA, ERY, EDZ, MWN, TYP, DPK . One can even trade options on most of these! Remember, the leverage works both ways, they aim to go up or down at 3x the speed of the relevant index. Still, if I have a good idea of the trend, these ETF’s may prove better than going to the casino and putting everything on black or red………..
Meanwhile, the GMI is now at 2 and the more sensitive GMI-R is is at 5. The QQQQ completed the third day (U-3) of its short term up-trend. And 74% of the Nasdaq 100 stocks had their MACD close above its signal line, a sign of an emerging up-trend. The QQQQ closed above its 10 week average, a critical requirement for me to make profitable trades on tech stocks in the past. So, I am still slowly building a position in QLD , and will wait to see if this rally holds. One must not fight the trend, but I can wait to jump on gradually. Among the stocks I am watching are: NFLX, HMSY, AVAV, TSYS, and ASEI (I hold small positions in some of these). All of my positions have sell stop orders in so that any losses will be kept small. By the way, my great stock picking friend, Judy, is bottom fishing again, and purchased AMZN– before its recent break-out!
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