Leverage: QID & QLD
Bad - bad action in the market today.
Today was my mountain hiking day. I left home at 6:20am and when I got home at 2:25pm I could not believe my eyes. Basically, I did not expect the market to behave this way. Most people may not see this but I see it clearly.
We are heading into another downturn.
Well, this is not a total surprise. I have been telling you that we have not seen the bottom for this year yet. During August or September, we will see the bottom. It may have started already. Just so you know, I have cleared all stocks from my trading account except for the Berkshire Hathaway stock (this one is a long, long term holding).
There will be no changes in our Acetrader portfolio.
We have to ride this one out. But prepare for the tidal wave that will come our way soon. Brace yourself. In the mean time, allow me to introduce two very efficient (what I call "Snipers") trading vehicle. Now, you will soon agree that this is a good one. The names of these snipers are: QLD & QID. Like James Bond (007), these guys go by simple letters.
The most active indexes that professionals use to trade are:
SPX: SP500 (Large top 500 stocks in US)
OEX: SP100 (Large top 100 stocks in US)
QQQQ: Cubes (Top 100 stocks in Nasdaq - Technology)
Out of these, the QQQQ is most volatile and interesting. And if you know what you are doing, you may want to hire QLD & QID to do a job for you. Basically, this is how it works:
If QQQQ goes up +10%: QLD goes up +20%
If QQQQ goes down -10%: QID goes up +20%
Do you get it yet? And if you have a margin account, you can leverage 3x times your money. Bottom Line: You can multiply 6x times your money to call the market (in this case, QQQQ). Simply put, your $10,000 can act as if you invested $60,000 in the market. Of course, this is not for everyone. But it is perfectly designed for a trader like yours truly. I have been utilizing this in my day trade account - and I am going to use it time to time in our Acetrader portfolio as well.
This is yet another gift to you, Acetrader family & friends.
Remember, leverage is good if you know how to use it. Trust me, Donald Trump do not use his money to buy buildings. Most people don't pay full amount in cash to buy the house - they leverage (bank's money). Most businesses use leverage. But also remember that leverage acts both ways. If you are wrong, ouch - you will feel the pain (well 6x the pain I guess: )
Just watch me for now.
P.S: RICK & PRZ will report earnings tomorrow. Keep an eye on it.
PPS: Gold and Oil is looking better - both will go higher to hit new highs.
Today was my mountain hiking day. I left home at 6:20am and when I got home at 2:25pm I could not believe my eyes. Basically, I did not expect the market to behave this way. Most people may not see this but I see it clearly.
We are heading into another downturn.
Well, this is not a total surprise. I have been telling you that we have not seen the bottom for this year yet. During August or September, we will see the bottom. It may have started already. Just so you know, I have cleared all stocks from my trading account except for the Berkshire Hathaway stock (this one is a long, long term holding).
There will be no changes in our Acetrader portfolio.
We have to ride this one out. But prepare for the tidal wave that will come our way soon. Brace yourself. In the mean time, allow me to introduce two very efficient (what I call "Snipers") trading vehicle. Now, you will soon agree that this is a good one. The names of these snipers are: QLD & QID. Like James Bond (007), these guys go by simple letters.
The most active indexes that professionals use to trade are:
SPX: SP500 (Large top 500 stocks in US)
OEX: SP100 (Large top 100 stocks in US)
QQQQ: Cubes (Top 100 stocks in Nasdaq - Technology)
Out of these, the QQQQ is most volatile and interesting. And if you know what you are doing, you may want to hire QLD & QID to do a job for you. Basically, this is how it works:
If QQQQ goes up +10%: QLD goes up +20%
If QQQQ goes down -10%: QID goes up +20%
Do you get it yet? And if you have a margin account, you can leverage 3x times your money. Bottom Line: You can multiply 6x times your money to call the market (in this case, QQQQ). Simply put, your $10,000 can act as if you invested $60,000 in the market. Of course, this is not for everyone. But it is perfectly designed for a trader like yours truly. I have been utilizing this in my day trade account - and I am going to use it time to time in our Acetrader portfolio as well.
This is yet another gift to you, Acetrader family & friends.
Remember, leverage is good if you know how to use it. Trust me, Donald Trump do not use his money to buy buildings. Most people don't pay full amount in cash to buy the house - they leverage (bank's money). Most businesses use leverage. But also remember that leverage acts both ways. If you are wrong, ouch - you will feel the pain (well 6x the pain I guess: )
Just watch me for now.
P.S: RICK & PRZ will report earnings tomorrow. Keep an eye on it.
PPS: Gold and Oil is looking better - both will go higher to hit new highs.
posted by Jaewoo | 10:27 PM
3 Comments:
I'm not sure i understand what you meant by "i didnt expect to behave this way". The biggest members of the AT portfolio gained today (EXPEZ, IGLD, RICK, UTK), so i'm not sure why you are dissapointed. Or is there something else that caught your eye about today's market action?
Please excuse my blunt questions, as i am a relative newbie and trying to learn from you :)
-Matic
Love your blog. Nice call on the RICK (so far :). Do you think this slump is a 1-2 month thing or will it impinge on the christmas period?
Friends:
Thanks Sonderval for nice words.
Any "slump" will be temporary I believe. If you go back and read my past notes, you will get a better feel. I am expecting a nice, white christmas...
When I say I was dissapointed, I was refering to the general market and its future expected movements. When the market falls, it also takes good stocks down with it. Our holdings will suffer too. But we will get up quickly. Where are you from? I like some personal touch...
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