Friday, August 27, 2010

SOLD TNA $36.00

A couple days ago I bought another position in Direxion Small Cap Bull 3X shares (TNA) at $32.70 and I decided to cut it loose today at $36.00.  My options now are to see if we get a bit of a pull back and then redeploy that capital, or simply find something else that the True Strength Index (TSI) and Money Flow Index (MFI) indicators suggest is ready to rock and roll.
Without a doubt in my mind, gold has completed its previous daily cycle and today was Day 3 of the next 20-24 day daily cycle.  And, without a doubt in my mind, today was just Day 2 of the next 36 - 44 day daily cycle for the stock market.  The point is that we are very early now in both the gold and stock market daily cycles and should expect the next couple of weeks to be extraordinarily strong.
My TSI trading record has been updated.
Click on the chart to ENLARGE


  1. HI, I am puzzled. If you think that TNA will go to $41 at least, how come you are selling your shares so soon?

  2. Hi Fung and thanks for your question.

    My answer is fourfold, and then some.

    One, I am so bullish that I have a significant percentage of my funds on margin. I generally believe that using such leverage is dangerous and so the opportunity to reduce my funds on margin, while taking a profit, was appealing.

    Two, I am holding 4 times more shares of TNA at a higher break even price than my sale today (see my trading record for details). Indeed, I anticipate holding those shares until they are profitable and target $41 as their sales price.

    Third, while I truly anticipate TNA will reach $41 within the next couple of weeks, I also know that in the stock market there are no 'sure things'. Anything can and does happen outside of one's expectation. So I have developed an investment style that takes some of my money off the table when it is available at a profit. I then can put the same money back into the market on the same horse, at a lower price if possible, or on a different security that I think has higher odds on excellent performance at that time.

    And fourth, if I did not have the particular investment philosophy as described above, I would have put everything I have on TNA when I first bought it at around $38.50. I sincerely thought $38.50 was a great price at the time but as we can all see, my timing there was not even close.

    But because I did not greedily "bet the house" at $38.50 on TNA, I have been able to do three subsequent trades of TNA with profits of 3.0%, 3.0% and today, 10.1% (again, see my TSI trading record for details).

    Truth be told, I do NOT have a crystal ball that is 100% accurate and I know it. One of the ways I compensate for this fact is to take profits as I earn them and hold unprofitable positions until they also become profitable. That way I rationalize that I am continuously using available capital to the best use I can decipher in the market, while attempting to always sell positions at a profit, and not a loss.

    My cumulative trading record has advanced nearly 150% in less than 3 months since I began this blog, and my actual account value has increased 30%. Using my risk management strategy for 12 months I hope to achieve between 500-1,000% gain in my cumulative performance and 150-200% in my actual account.

    I have found from experience that this latter measurement of account balance increase begins to accelerate because I continuously have more money to work with from previous gains.

    The old adage, 'it takes money to make money' really is true. And for what it's worth, to get from a 100% gain in one's portfolio to a 200% gain is not too difficult. Getting to 300% is much easier yet. 400% is then quite easy.

    One year I exceeded 600% and though it was a tedious endeavor, it did teach me something about the compounding effect of successful money management. The technique of pursuing the goal of 100%+ annual gains to one's portfolio is what I am trying to model for you and my other readers.

    I hope my thoughts help you.

  3. Thanks for sharing your thoughts. I am happy to get "just" 50% return annually.