Thursday, August 6, 2009

SRS: Primed for a bounce

I am not a big fan of SRS, especially for long term plays due to getting burned in the past but if there is ever a time to play SRS, now is it. The leveraging mechanisms for this ETF can cause a large percentage increase if there are any corrections in the market around REIT's and CRE exposed smaller financial institutions.

I have to pound the table on this one. SRS could see a 40% increase in the very short term. But don't hold it too long. You have to take your profits in these leveraged ETF's when you can. Don't get greedy.

The only leveraged ETF I can recommend that does not appear to have nearly the time decay as others is SDS. But again, not as a long term play.

Another great play right now would be to short or play puts on FAS. It has had quite a run up and any correction in financials will cause a pretty big correction in this triple leveraged ETF.

Tuesday, August 4, 2009


It's time. Finally a spot to pull the trigger on some short positions. I was stopped out early on shorting AmEx and KRE. Stayed out of the market other than playing TBT and UNG. But now is the time to enter short positions. I base this on technicals of charts as well as reality that the market is overbought in a difficult economy. I think we go back to test 930 before a bounce brings us back to the upper '900's. We will see.

On the positive front, I am running into people who are openly spending money. Installing a pool, buying cars, upgrading the house, etc. At the same time, many friends and family who have been out of work still are. Some have been out of work for more than 10 months. Sooner or later this will catch up the economy. I feel like this is a period of false hope and in the end, many will get burned by over spending or being complacent.

Tech is on fire. I won't touch it either way. It really needs to correct but I won't get in front of that train. You have to have some sort of inflation trade. TBT or GLD have got to be in your portfolio. I still like nat gas plays as a long term play but if you are not keeping up with what the gov't is trying to do with futures activity around energy, well, all I can say is playing UNG is risky at best since it may not be able to track to future prices anymore.