Fed Manipulation and Market on Crash Course

http://www.tradingmarkets.com/stocks/commentary/fed-manipulation-and-market-on-crash-course-1268325.html

Weekly ETF Review and New ETF for Nov 1 2010 Week

As I had mentioned in the last week's review that I would like to test this strategy during a market pullback. This week provided an opportunity to test it out.

Our top ETF picks last week and their weekly returns are as follows:

Top 5 ETF last week were

***********************************

ETF Weekly gain

***********************************

1. AGQ -12.53%

2. CZM - 1.25%

3. ERX - (0.60%)

4. LBJ - 2.72%

5. TNA - (0.21%)

--------------------------------------------

Cumulative return of 3.14%.

SPY's return for the same period were 0.07%, which again proves that picking ETF based on strategy is lot better than just parking your money and trying to get market returns.

As I had mentioned last week, I have closed all the positions due to market conditions and bearish patterns on the horizon.

However the ETFs are showing that there is still strength in some pockets and those pockets might help us balloon higher. But as the saying goes, Prevention is always better than cure. I would restrain myself from getting hammered. and I would let Mr. Market tell us the way.

It is very easy to get invested again if market moves higher.

Keep on checking here and I will post on Facebook also.

Weekly ETF

However the TOP ETF for this upcoming week are as follows:

These are the top ETF to hold this week

1. AGQ

2. SGG

3. CZM

4. DAG

5. TYH

We will track these top ETF again next week.

Also I would keep on close eye on these ETFs leaders for any signs of market weakness as these leader are usually the first one to lead the way lower.

Some of the stocks of interest this upcoming week

AUDC

CALD

PWER - Huge market manipulation in this stocks.. so watch out for short squeeze..

AUMN - I will be buying this on pullback, another volatile stock..

One of the Market Timing Tools

Most of the brokers, mutual funds companies dont like people to time the Market.

The give you long list of excuses why market timing is not good.. but the stats prove it other way around.

Here is a very good article..

http://www.kiplinger.com/magazine/archives/2009/08/can-you-time-the-market.html

Key points:

• Bob Parrish lost 70% of his retirement savings based on advice from a financial adviser
• Parrish fired his financial adviser and decided to try timing the market
• Parrish did quite well; his portfolio has gained an annualized 23%
• Market timing is a tough strategy and few do it well. Parrish admits, “I’m savvy enough to recognize I’ve been very fortunate and that it’s not going to last.”
• Mark Matson, a Cincinnati money manager, likens a market-timing strategy “playing Russian roulette”
• Successful market timing requires three key ingredients: a reliable signal, the ability to interpret the signal correctly and the discipline to act on it.

In my recent talks with one of the very good traders Linda Rashcke about some of the strategies that I use, she suggested the I look at collection of indicators for some general Market timing.

I have stolen this model shamelessly (Six Sigma = Steal Shamelessly) for my general market timing, One of the components of that is what I am sharing today.

The indicator that I use is

1) $BPNYA

2) 10 day SMA of $BPNYA

When $BPNYA drops below 10 day MA - SELL

When $BPNYA rises above 10 day MA - BUY

The below chart shows you the NYSE Bullish Percent Index

For more on NYSE Bullish percent index, please read

http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:bullish_percent_inde

This chart has $BPNYA, its 10 day MA and $SPX on the same chart.

You can see from the chart that whenever $BPNYA has dropped below 10 day MA, SPX has dropped in next day or two.. and same when $BPNYA has crossed above its 10 day MA then market has rallied..

So use it and be successful..

How to adapt to HFT

Very good article on how to Adapt to HFT

http://www.sfomag.com/Trading_Stocks_News-Adapt_to_Survive_High_frequency_Trading-ar1448i105.aspx

Weekly ETF Review for Oct 25

As I had mentioned in the last week's review that I would like to test this strategy during a market pullback. This week provided an opportunity to test it out.

Our top ETF last week were

Top 5 ETF last week were

***********************************

ETF Weekly gain

***********************************

1. AGQ - (8.35)%

2. SGG - 4.76%

3. CZM - (3.97)%

4. DAG - 0.60%

5. LBJ - (-5.46)%

This gave us a cumulative return of -2.48% on investing $1000 in each of these ETF monday morning.

The return on Market Proxy SPY (mimics SP-500) was also low 0.60%.

We closed all this ETF due to Market conditions and bearish patterns that I had pointed out during Thursday Post

http://bigbullandbigbear.blogspot.com/2010/10/why-i-sold-all-etf.html

My return was 0.17% as I moved quickly to close the positions.

This also shows some kind of weakness as the Experts at the trading desk were not able to pull rabbits (profits) out as they do in bull markets.

Weekly ETF

I dont plan on holding anything this week till Market tilts one way or other.

I will post if I decide to buy any ETF

However the TOP ETF for this weeks are

These are the top ETF to hold this week

1. AGQ

2. CZM

3. ERX

4. LBJ

5. TNA

We will track these top ETF again next week.

Some of the stocks of interest this upcoming week

ANTP -

VHC

AUMN

HSFT

TUG OF WAR

The markets were again rescued by the FED helicopters and High Frequency Computers.

The bulls tried to take the markets up this morning breaking the 1184 levels on SP-500 and then Bears came back and took it down. The HFT computers were favoring the Bears this afternoon.

Again after 2.00 pm, the HFT computers changed sides and started supporting Bulls..

Here is another picture that shows what needs to happen for us to become BULLS again. Also remember we are not BEARS either as of now..

Why I sold All ETF

As mentioned before.. we were expecting Market Weakness and we saw day before and today also.. Fed helicopters come and rescue the markets every now and then (May be due to Election time).

Our goal is to stay disciplined and protect our money.. I saw the below pattern in AGQ, GLD, CZM and LBJ. Also bearish engulfing in SGG. Also alongwith there were violations of the 10 day MA again..

So time for protection and going CASH.. Its very easy to buy them back once the conditions resolve but its prudent to protect your profits..

REMEMBER..

BULLS MAKE MONEY

BEARS MAKE MONEY

and HOGS GETS SLAUGHTERED

http://img253.imageshack.us/img253/7489/1021201044728pm.jpg

Selling ALL ETFs

Markets in Doldrums..

Selling ALL ETFs

Weakness Ahead

As pointed out over the weekend, we had the bearish wedge formation and this morning the markets started dropping.

We were expecting the market to supported by the FED helicopters but the selling was heavy and FEDS did not come to rescue.

For tomorrow, I expect SP-500 to rally back to 1171 levels before dropping down again.
Market should find support at 1150 level.

The other possibility is that the FED helicopters come rescue us tomorrow, we saw little hints of it at the market closing. This kind of activity has happened in the past Look the charts closely.

I sold some of my ETFs and my stocks today.

Ants in the Pants..

Wait for the HFT computers to show its hand.. either BUY AND SELL based on those selloff or support..

Risk Management

One of the very good articles that describes what really happened in 2008 Market Crash. I did talk about this article with couple of friends late yesterday night. So here is the link.

http://www.nytimes.com/2009/01/04/magazine/04risk-t.html

The focus here should be to nderstand how and on what all these relies ON and find your way around it to either escape UNSCATHED or Swim in Profits.

Now that's what I call RISK Management

Get over with it: FOCUS on what you want

The below link describes what exactly is HFT and how the flash orders are manipulating markets.

You can see this live everyday if you are watching Level II quotes on your trading platform.

That is why sometime use of limit orders is not good. Market Orders will chase and hunt the price and get your order filled in rather than CAT and MOUSE game being played by the HFT computers.

http://www.youtube.com/watch?v=1CHgtNyGkk0

This second article talks about how some of the firms are taking actions and why your trading firm and the back order clearing firm should be Financially sound and strong.

http://online.barrons.com/article/SB50001424052970203952604575552190237324972.html?mod=BOL_hpp_dc

This article is from one of the fantastic bloggers out there, Charles Kirk.

It talks about how Life has been unfair and how to understand and internalize a problem to find a solution.

Free Reports « The Kirk Report

One of the way to beat the HFT computers are the days where there is lots of Chaos (not the ones created by HFT). Trading edge with very sound Risk Management, trade management.

I will post articles on Risk Management and Trade Management during upcoming ways and days.

Weekly ETF for Week of 18th Oct 2010

Weekly ETF

These are the top ETF to hold this week

1. AGQ

2. SGG

3. CZM

4. DAG

5. LBJ

This week EDC slipped to # 6 and CZM zoomed up to # 3 from #6.

We will track these top ETF again next week.

Top 5 ETF last week were

***********************************

ETF Weekly gain

***********************************

1. DAG - - 0.68%

2. SGG - 2.82%

3. AGQ - 8.76%

4. EDC - 3.10%

5. LBJ -4.58%

This gave a cumulative return of 3.7% on investing $1000 in each of these ETF monday morning.

The return on Market Proxy SPY (mimics SP-500) was meager 1.00%.

I would like to see how this strategy performs in Bear Market or some pullback.

Top ETF by weekly % movers this past week 10th Oct to 15th OCT

1. TMV - 11.75%

2. TYH - 11.73%

3. CZM - 10.33%

4. AGQ - 8.76%

5. TBT - 7.79%

Again looking at these weekly leaders, I wonder why somebody would invest in the stocks. This is one easy way to make money....

Also checking the the performance of last week's ETF selection based on its previous week performance

1. DAG - (-0.68)

2. SGG - 2.82%

3. RJA - 0.00%

4. AGQ - 8.76%

5. ERX - 4.32%

If the top performers were bought, your return would be 3.04%

Some Other things to watch this upcoming week is, Are we heading into Sector Rotation ? or some sort of orderly pullback ?

The below picture show bearish wedge formation.

Some of the stocks of interest this upcoming week

AAPL - Earnings after Close on Monday

EXAS

AMZN

BBY
FTNT

AMT

Also interested in the new IPO TOWR but it started sinking today, so will keep an close eye on that one.

Weekly ETF

These are the top ETF to hold this week

1. DAG

2. SGG

3. AGQ

4. EDC

5. LBJ

We will track these top ETF again next week.

Top 5 ETF last week were

ETF Weekly gain

---------------------------

1. AGQ - 9.68%

2. SGG - 13.97%

3. LBJ - 3.01%

4. CZM - 4.94%

5. EDC - 5.26%

This gave a cumulative return of 7.3% on investing $1000 in each of these ETF monday morning.

Top ETF by weekly % movers this last week

1. DAG - 27.11%

2. SGG - 13.97%

3. RJA - 9.91%

4. AGQ - 9.68%

5. ERX - 8.00%

Looking at these weekly leaders, I wonder why somebody would invest in the stocks. This is one easy way to make money..

How to trade ETF

I will post a weekly list of ETF that I am interested in or I am holding.

These are the best performers for the week.

Buy Criteria:

Buy the listed ETF on Monday

- If you are already holding one from previous week, then keep on holding

Sell Criteria:

Sell the ETF that is not listed on the list on M0nday

Also I will be posting my Market Timing on this Blog

I will post the latest ETF list over the weekend.

Currently I am holding SGG and DAG.

So keep on checking..