Saturday, March 31, 2012

BUY NUGT @ $16.07

I repurchased shares of Direxion's Gold Miner Bull 3X ETF (NUGT) yesterday morning @ $16.07. I had a limit buy order set to trigger at a price that would be a gap fill of the previous day's session. The order executed as I requested but the True Strength Index (TSI) indicator also registered a sell signal which left me watching price drop another 45 cents before it registered a new buy signal. So much for trying to trade and work at the same time. Anyway, I will hold for a while as it appears to me this trade should work out anyway.

My TSI Trading record has been updated.

Friday, March 23, 2012

Sold NUGT @ $16.72

Well, after the fiasco of holding TVIX I figured that going back to what I do best seemed like a good idea. So I have managed to flip yesterday's purchase of Direxion Gold Miner Bull 3X ETF (NUGT) at $15.55 for a 7.5% gain today - with this afternoon's sale of all shares at $16.72. 

My TSI Trading record has been updated.

SOLD TVIX @ $8.50

My status as a shareholder of VelocityShares VIX 2X ETN (TVIX) came to a disappointing conclusion this morning as I sold all my shares for $8.50. The loss sustained from my two purchases was just shy of 50%. Ouch, double ouch, triple ouch and a few choice words added for good measure.

My TSI Trading record has been updated.

I was aware of the Net Asset Value issue several days ago, if not longer, but simply too naive to fully grasp the implications.  At this point I understand that one way or another, eventually, the market will correct discrepancies in NAV. As TVIX reportedly has a net asset value of something less than $8 per share I decided that anything I could sell for above $8 was a gift.

After studying/researching last evening and this early morning I came to the conclusion that to sell at this point was the best thing to do. My concerns for share price going forward  were many. The issuer, Credit Suisse, announced last evening that they were ready to make additional shares available. My interpretation was that they was going to make it easier for short sellers to pound TVIX further with fresh ammo. 

Also, I pondered what would happen when all the millions of shares shorted yesterday were covered. Would we get a bounce to sell into? That would seem reasonable except for the fact that absolutely nobody owns a single share of TVIX at a profit. If I were a short seller I would just hold because I would know there are 25X more motivated sellers out there than buyers.

And finally, I am beginning to understand that all these highly leveraged ETF/ETNs eventually fall to $0 in value over time.... long and short..... makes no difference. So if we see the S+P continue its insane rally, and I believe we will, there is no telling what this will be worth when the stock market finally crashes.

At the moment TVIX is selling at $7.53.

Thursday, March 22, 2012

BUY NUGT @ $15.55 - Gold 2008 vs. 2012

I seem to have it in my head that gold is possibly making an inverted head and shoulders pattern as was the case following the 2008 C-wave top. With that thought in mind and seeing that the miners are really beat up - to the point that GDX is sitting on the lower boundary of the 17 month old megaphone pattern - I took a position in Direxion Gold Miners Bull 3X ETF (NUGT) at $15.55.

The charts that follow are of my NUGT purchase, as well as the 2008 gold inverted head and shoulders and the possibly forming current specimen.

My TSI Trading record has been updated.

Tuesday, March 6, 2012

TVIX Rocket Launch? - BUY @ $16.85

I bought more shares of VelocityShares 2X VIX ETN (TVIX) at $16.85 in this morning's pre-market. The setup looked favorable when compared to the setup in the first week of last month - February.

My TSI Trading record has been updated.