- though i am a longer term bull on the financials, techs, ES and NQ, i am concerned about potential weakness during this september-october period...
- in custodial account's GB and DB, i have been swing trading FAS to the long side since the middle of March 2009...
- custodial account GB is averaged in at 52.60...
- custodial account DB is averaged in at 48.12...
- this am i sold 1/3 of the full position for both custodial accounts in the high 78's, netting about 50% for GB and about 65% for DB on the lot sold...
- i am looking to sell a second lot for each account in 86-88 range and the third lot in the 96-98 range...
- i am looking to buy back the lot just sold in the low to mid 60's...
- i have been swing trading the FAS to the long side in my IRA since the end of May 2009...
- the most recent avg entry price for the FAS in the IRA was 49.41...
- this am, i sold the second lot (of three total) in the high 78's, netting about +60% on the sold lot...
- i am looking to buy this lot back at 67.50...
- i am looking to buy the third lot back at 57.50...
- overall, since the March 2009 low, i am very happy with the performance of the FAS and with how i have been swing trading it...
- this is the fund summary for the FAS:
"...The investment seeks to replicate, net of expenses, 300% of the daily performance of the Russell 1000 Financial Services Index The fund will invest at least 80% of assets in securities that comprise the index. It will also utilize financial instruments that, in combination, provide leveraged and unleveraged exposure to the index. The fund is nondiversified..."
- i am aware of the problem with leveraged ETF's losing their co-relation to their tracking vehicle... these leveraged etf's are designed for daytrading and not as investment vehicles...
- the chart above shows a few examples of the leveraged FAS and its tracking vehicle being out of sync: 1) late 2008; 2) the august breakout above the may highs...
- the FAS is heading in the same direction as its underlying, but its rate of appreciation appears to be less than 3x its underlying...the FAS also retested the summer breakout area, while the underlying did not...
- i do have concerns about FAS being out of sync with its underlying...
- however it is still tracking the direction of its underlying, and i still believe in the bull market in the financials and believe that it will continue for some time...
- i will continue to swing trade the FAS until my targets are hit or the end of 2009...
***remember this is an illustration of what i am trading and my thinking...my trading plan may change without notice...this is not a recommendation for you or anyone else, to buy or sell this or any other security...***
Posts
the low of the day in the FAS was 67.51...
ReplyDeletei have an entry order on the books to buy limit 67.50...
its been that kind of day...
with the kind of weakness that FAS and the market had today, i am expecting that 67.50 to get filled sometime soon, perhaps at an even better price if the FAS were to gap down on an open...