Stenzrob's specials

Ultrashort ETF's underperforming

I've been following QID and SDS, ultrashort ETF's for nasdaq 100 and S&P 500. They did not perform as well today as they should have, and I noticed that there was about a 0.5% jump in both of these at a time when there was no correlating jump in the indexes that they (inversely) track, right at the beginning of the day. Here are two day one-minute charts.

Over two days, the nasdaq has fallen about 0.6%, but the QID is not anywhere near +1.2%, in fact it's down. There's a funny blip there between yesterday and today, but what really killed the short term performance of QID is that the nasdaq dropped about 0.25% right at the open, and QID just picked up from where it finished yesterday, which was down 0.75% while the nasdaq was flat for the day. SO, my QID dropped when the nasdaq was flat, and way underperformed what it's supposed to do today with the nasdaq down.


Likewise, over two days, the S&P500 is down about 0.5%, but SDS is not anywhere near +1.0%.


Of course, the prospectus says that the use of derivatives, increased volatility, blah, blah, blah, => we don't guarantee anything. But still, I'm a little disappointed that a pretty bad day in the markets doesn't get me the gains it should in these ETF's.

I wouldn't pay this much attention to them if I didn't have a position, so it's been an interesting experiment in inverse market timing, but I probably won't be doing this again.

Bad news in housing well received by my QID ultrashort position. This could still payoff. In the meantime, I took a long position in DRAX last Thursday 3/22 at $6.18. It's in the green right now, and has been upgraded and/or had price targets raised by two analysts since then after their analyst and investor day that day.

These are my only positions right now.

Sold the DRAX for $6.28 for a negligible gain.
I'll see if I can pick it up cheaper on a pullback.

Karma has a way of revealing itself in occasionally humorous irony

touche, peanuts!

[peanuts]

Bad news in housing well received by my QID ultrashort position. This could still payoff. In the meantime, I took a long position in DRAX last Thursday 3/22 at $6.18. It's in the green right now, and has been upgraded and/or had price targets raised by two analysts since then after their analyst and investor day that day.

These are my only positions right now.

Funny. They both started heading down right after you posted this.

Karma has a way of revealing itself in occasionally humorous irony

Bad news in housing well received by my QID ultrashort position. This could still payoff. In the meantime, I took a long position in DRAX last Thursday 3/22 at $6.18. It's in the green right now, and has been upgraded and/or had price targets raised by two analysts since then after their analyst and investor day that day.

These are my only positions right now.

... The market still looks like it's just waiting for any excuse to selloff again to me, so I will remain in my ultrashort position for now. ...

OOPS.
Market liked fed inaction and virtually no change in bias?

Yesterday looked like the beginning of a new rally attempt, but if you follow the handful of intraday updates that include relative volume (available online at a well known but her unnamed site), the volume was running much higher as the indices dove, then lightened up considerably as they bounced and ended higher. The market still looks like it's just waiting for any excuse to selloff again to me, so I will remain in my ultrashort position for now.

I noticed that Doug also pointed out last night that "If the technicals are right this will not be a pretty picture over the next week.". I agree.

regards .. stenz

I knew this guy

http://www.nj.com/news/ledger/index.ssf?/base/news-11/117350706462280.xml&coll=1

The family attends my church, two daughters quite often dropped off for Sunday School by the limo. If you google the name; in addition to articles like this one, and about SEC actions, you find various charitable and political contributions and boards of charitable "society-type" organizations, like the Philadelphia Youth Orchestra. A real wheeler-dealer player, until recently.

Volume running higher again today - on a down day. Just the kind of action that my market short position likes!

Having bought QID at about $56.90, I am still in the red, but the trend still looks right.

I am still short the market via the QID ultrashort ETF, still believing there's more to fall. Today, the markets opened higher, but hit resistance and volume was lower than the last several days. Volume picked up later in the day - as the day's gains were cut in half.

I have to play this the way I see it, and not by just sitting on the sidelines. Accordingly, I just bought some shares of QID at 56.90. For those who may not already know, QID is an "ultrashort" ETF that aims to inverse track 2x the QQQ (nasdaq 100).

According to the chart I posted above, the nasdaq is likely to fall at least another 10% over the next two to three months before reversing. If that happens, this would produce a gain of about 20% in QID. This is the first time I've tried this - we'll see how it goes. I considered SSG, 2xInverse of sox, but trading volume in that ETF is quite low. ProShares has a variety of ultrashort ETF's.

In previous market corrections, I have either stubbornly held my positions because I refused to believe the market could drag down the stocks of fundamentally sound and/or undervalued companies (wrong, stupid), or I would sell most or all and invariably jump back in prematurely after a bit of a decline. By holding a position on the short side, I can alter my psychology and join websman in reveling in the misfortune of others. As long as QID advances, I may feel no urgency about getting back in on the long side.

sox bounce

Surprised to see a bit of a bounce in the SOX this morning. Took the opportunity to unload the remainder of my positions. Sold AEIS for $19.40 and a 4.4% loss, and TSRA for $39.05 and a miniscule 1.5% gain. TSRA was my only net positive bailout this week, from a just buy below $38.50 back on 1/29.

Now at 100% cash and pondering my alternatives. Sit and wait, or try one of those ultrashort ETF's. (Most of my play money is in an IRA, so I cannot short directly. Checking with Schwab to see if I can go long on a short fund with it.)

regards ... stenz

[Websman]

I'll check it out!

Great chart Stenz.

I say, why fight it. I'm already looking for short canidates.

Thanks webs. And thanks to various folks here for turning me on to imageshack and giving instructions on how to post images. I know it's probably a stupid place to do this, but I also just started blogging a bit on myspace, where I also exchange quips with my son and his friends.

http://profile.myspace.com/jbowbee

[Websman]

Great chart Stenz.

I say, why fight it. I'm already looking for short canidates.