Friday, July 23, 2010

Looks Like Tuesday

Positive earnings reports appear to have overcome that irrational pessimism spawned by Bernacke's gloomy comments. NYAD readings were WAY up and were sustained all day. Volume was unconvincing but HEY!, in this yo-yo market nobody wants to hang out there too far. Thursday night Don Worden said Tuesday WAS a key reversal day and we're now poised for a new uptrend. OK Don. For my own part I closed my short FXE position at the open and managed to book a whooping .05 gain. Live and learn. I should have played my usual daytrader role and pocketed profits at Wednesday's close. For now I'll just reload and wait for the next setup.
BZF is on a high volume tear and check out the MoneyStream value . . some real accumulation under way as volume continues to fade in the golds and UUP.
As an aside, I live in an over 55 community where I'm the current HOA President, serve on a number of advisory committees and preside over a small investment club. Many of my fellow residents are now VERY conservative with their investments, having suffered major hits to their IRAs and other investments in 2008-09 and are limping along on .5 % CD returns.
So, for the truly risk adverse here's a doctoral paper on an interesting collar strategy focused on the Qs that has consistently yielded almost 10% annually with very controlled risk. Now, 10% doesn't seem like a lot but it is 20 times better than .5% and the system requires very little maintenance. Worth a look IMHO. Also consider the potential returns using QLD, SSO or other blended higher beta ETFs with (and this is key) very robust options open interest chains and .01 option bid/ask spreads.

1 comment:

quickturtle said...

Great post. I been trading the QLD, ERX and TWM. I just started watching SSO since you mentioned them in this blog. The returns beat any interest I get in CD's.

Once again, thanks and keep up the great articles.