weekend update


This week the US market was just moving along as it has been in recent weeks. Extending the uptrend and making all time new highs nearly every day. On Wednesday, when FED chairman Bernanke was reading his prepared report to congress, regarding the economy. The market hit an all time new high at SPX 1687. When the question and answer session began market pundits got hint of a potential tapering off in the QE 3 program. Pundits took that hint and started to take profits. For the week the SPX/DOW were -0.7%, the NDX/NAZ were -1.2%, and the DJ World index lost 1.4%. Economic reports for the week were upbeat with positive reports outpacing negatives one 6 to 2. On the downtick: the M1 multiplier and the WLEI. On the uptick: existing/new homes sales, new home prices, the FHFA housing index, durable goods orders and weekly jobless claims improved. Next week, holiday shortened, we get reports on Q1 GDP, Personal income/spending, PCE prices and Consumer sentiment. Best to your weekend, holiday, and week.

LONG TERM: bull market

It was a busy week for the markets and the OEW group alike. We posted several special reports during the week, and have one left which we will post this weekend. This should bring everyone up to date on the general consensus in the group. In case you missed any or all of them here is a link recap:






If you invest only in the US stock market you may find all, some, and possibly none of them useful. The exception should be the last report. There you will find a chart, in simplified OEW terms, on what to expect for the rest of the bull market. For those more technically inclined we offer the following explanation.

We continue to track the waves of this bull market as Cycle [1] of a new Super cycle multi-decade bull market. This very long term bull market should be comparable to the 1932-2007 Super cycle bull market. Super cycle bull markets unfold in five Cycle waves, and we are currently in its first bull market from the Super cycle low in March 2009.


Cycle wave bull markets unfold in five Primary waves. Primary waves I and II completed in 2011, and Primary III has been underway since then. Primary wave I divided into five Major waves with a subdividing Major wave 1. Primary III is also dividing into five Major waves, but both Major waves 1 and 3 have been subdividing. Major waves 1 and 2 completed by mid-2012, Major wave 3 has been underway since then. Intermediate waves i and ii completed in late-2012, Intermediate wave iii, our current uptrend, has been underway since then.

Before this bull market ends we expect Intermediate waves iii, iv and v to complete ending Major wave 3. Then a Major wave 4 correction will lead to a Major 5 rally to complete Primary III. Then after a Primary IV correction another uptrend to complete Primary V and the bull market. Currently we expect a bull market peak between SPX 1650 and 1780 in late-winter to early-spring of 2014.

MEDIUM TERM: uptrend hits SPX 1687

We have been counting this, six month Intermediate wave iii, uptrend unfolding in five Minor waves: Minor 1 SPX 1424, Minor 2 SPX 1398, Minor 3 SPX 1597, Minor 4 SPX 1536 and Minor 5 SPX 1687 thus far. Minor 1 was simple, Minor 3 extended into five Minute waves, and Minor 5 is extending as well. Minor 1 rose 81 points, Minor 3 rose 199 points, and Minor 5 has risen 151 points thus far. Overall this uptrend has risen 344 points. Making it the largest point gaining uptrend of the entire bull market.


At the recent high Intermediate wave iii is equal to 1.618 times Intermediate wave i. A very common Fibonacci wave relationship of one wave to another within the same degree. With negative divergences on the weekly, daily and hourly timeframes, the recent high should normally be considered the end of the uptrend. And, we do have a short term count that fits this scenario in Minute waves: 1598-1581-1673-1663-1687. The only problem we have with this count is that the fourth wave at SPX 1663 appears to be too shallow for this wave structure.

Had that decline dropped into the SPX 1640’s, and then rallied to 1687 it would be a better fit. Nevertheless, it is worthwhile to note that the uptrend high may have already occurred. For now we will keep the short term count posted as is. Expecting a retest of the highs, or higher, before the uptrend ends. Keep in mind, however, waiting for a fifth of a fifth wave to sell is often not advisable. Medium term support is at the 1628 and 1614 pivots, with resistance at the 1680 and 1699 pivots.


Our preferred count remains Minute waves: 1598-1581-1687-1636/37-with the fifth wave next. If the market can now rally above SPX 1653, this would turn our short term OEW charts positive, suggesting Minute v is underway. Then a retest of the high or the OEW 1699 pivot would be next. Should this market start making lower lows, reaching the OEW 1628 pivot, and breaking below its lower range: SPX 1621. Then the uptrend probably topped at SPX 1687, and the short term count posted in the Medium term section is correct.


Should a downtrend be underway we would expect it to last about one month and find support around the SPX 1540 level. This level would be right in between the OEW 1523 and 1552 pivots. Suggesting either one could act as support as well. Short term support is at the 1628 and 1614 pivots, with resistance at the SPX 1658-1667 range and the 1680 pivot. Short term momentum ended the week above neutral. The short term OEW charts remain negative with the reversal level at SPX 1653. Best to your weekend!


The Asian markets were mostly lower losing 1.8% on the week. Only S. Korea remains in a downtrend.

The European markets were all lower losing 3.0% on the week. All indices uptrending.

The Commodity equity group were mixed gaining 0.5% on the week. All uptrending.

The DJ World index is still uptrending but lost 1.4% on the week.


Bonds continue to downtrend losing 0.5% on the week.

Crude is still in a downtrend and lost 2.0% on the week.

Gold is downtrending as well but gained 2.0% on the week.

The USD is uptrending, but lost 0.8% on the week.


Monday: holiday. Tuesday: Case-Shiller at 9:00, then Consumer confidence at 10:00. Thursday: Q1 GDP (est. +2.7%), weekly Jobless claims, and Pending home sales. Friday: Personal income/spending, PCE prices, the Chicago PMI and Consumer sentiment. The FED has nothing scheduled for the week. Best to your weekend, holiday and week!

CHARTS: http://stockcharts.com/public/1269446/tenpp

About tony caldaro

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143 Responses to weekend update

  1. phansmann says:

    Reblogged this on phansmann and commented:
    the long term for the shanghai stock index(1996 – present) shown on last weekend’s international stock indexes shows that wave IV is overlapping into wave I. I thought that if wave IV cannot overlaps into wave I that the entire wave count becomes invalid
    Responses are appreciated

  2. rc1269 says:

    absolute sell-fest in credit today. biggest divergence from the stock mkt in a long time as far as i recall. surprising given the UST selloff – typically the treasury selloff makes corps that more attractive due to higher all-in yield. risk def not ‘on’ today.
    buyer beware

    • Leetired says:

      Thanks RC

    • tony caldaro says:

      Yes … 10YR down 37 ticks, and LEE didn’t cover yet?
      He must be retired

      • Leetired says:

        hahaha I’ll never tell !
        It made front page news today so it’s probably over with.
        How bout them Black Hawks ?

        • tony caldaro says:

          3-3 go Hawks!
          How about those Cards.
          Lost three starting pitchers and their closer from last year.
          But have only lost two series all year.
          Thinking Cards-Yankees world series bet with my brother =)

          • Leetired says:

            RE: Cards

            Beyond impressive so far. My family down ur way keep me updated to say the least.
            If that’s the case I better take some profits to be able to buy some tickets… In St Louis of course 🙂

    • No says:

      thanks RC… are you saying the equities gap up & holding well into close not enough to justify “risk on” in comparison to the sell-fest in credit?

      • rc1269 says:

        that’s correct, No. risk taking in fixed income mkt not mirroring that of equities, and the correlation is usually pretty high. except around key mkt pivot points.

      • No says:

        to add to your “risk of” observation – VIX is also diverging (up 3.5%).

  3. lunker1 says:

    TLT down 2%+ to a 13 month low

  4. budfox9450 says:

    Tony – just wish to say “thank you” for adding the
    OEW Simplified SP500 Daily chart. It really does
    clarify, the wave count. Keeps alive the macro view
    as well. Your a true star, my Illinois friend….

  5. gokalg says:

    U mentioned possible cup and handle if support holds. Where is support around 1654 area?

    • H D says:

      1665, basically we have found sellers, rallies got sold back and that is new IMO. I am thinking A was 50 so C will be 80.

    • torehund says:

      I SEE a double abc down fromtodays gap up, bottom ?

    • mkmason2013 says:

      Well, whatever this is, I have too good a position on to let it go unless this downtrend becomes stronger.

      • torehund says:

        M-the one I follow and sit long in have started to move, but there isnt any exuberance to see and many are still close to all time lows. Also shipping is in the dumpster. I dont see all that proclained optimism in the population trensferred into stock appreciation. Looking at the sp 500 gives me cold sweats though….vertigo…strange

  6. blackjak100 says:


    Would you agree this no longer looks like minute v? It looks like more of a retracement of the impulse wave from 1687-1636

  7. mkmason2013 says:

    This is sad… Very sad!

    Tony, do you consider this a truncation (officially)? Or what else?

  8. blubrd67 says:

    Any opinions on Tesla? Isn’t it overpriced at the current or even future sales levels?

    • Yup, OB, IMHO. I pretty much missed the entire move from 45 to 90 or so (can’t trade ’em all), but went long last week at $90. Exited today at $105, which was my target. Not caring if it can/wil go higher; too risky IMHO.

  9. H D says:

    POTUS only 5th prez to see SP double during presidency, no other prez in history have seen corp profits this high…. Now if it would only start trickling down…

  10. gtoptions says:

    Thanks for the WE Update Tony
    Hope everyone had an enjoyable Memorial Day.
    SPY Weekly PP @ 166.11

  11. Tony what is your best guess for Wave V high ? you think we get above the OEW 1700 or what will be your best guess ?

  12. lunker1 says:

    since 1636 it seems this consolidation off 1674 is either 4 of 3…..or 4 itself and 4 of 3 was the early am low. also if 3 started at 1637 Friday this retrace so far is 23.6% which fits for 4.

  13. manunidhi21 says:

    namaste …
    “”Keep in mind, however, waiting for a fifth of a fifth wave to sell is often not advisable””””

    can you detail this..

  14. rolandu11 says:

    A look at the markets, so the buy signal of the short-terme indicator mentioned here on Saturday once again was great (as always). I was even impressed when I saw the results of the indicator for the first time. But the problem is that the indicator sometimes longer time is running sideways and gives no signal.

  15. Tony, great call, looking forward to see at 1699 ish soon… FYI – FB went below 24, YHOO seems very strong…

  16. H D says:

    GM all, Tuesdays….

  17. mkmason2013 says:

    Sold 1/2 my tna. Holding the rest.

  18. Tony

    Today we might then conclude that wave iv is done and we are on the way up for wave v , as we are above your OEW spot ?

    So we can label wave iv currently as of last week bottom.

  19. rc1269 says:

    morning Tony. looks like everyone enjoyed their BBQ this weekend!
    all i’ve seen this morning so far is BWIC after BWIC (bids wanted in comp). ie, investors trying to sell credit into strength.
    noboby buying the dip this time. fwiw

    hope y’all had a great Memorial Day!

  20. mkmason2013 says:

    Yeeeeeaaah! Love those futures! Bye, bye minute iv. Don’t know how long this uptrend with hold, but hoping at least until late Wed. or Thur. GL All ! (Even though I hate to have this past weekend come to an end.)

    • capi25 says:

      Good call again from Tony.
      That was a tof one considering the last week weakness
      But since the beginning of this Int iii every dip is bouth, i consider the last week weakness as part of this manipulation.

    • mkmason2013 says:

      GREAT call from Tony!

  21. Erka11 says:

    Dear Tony,
    I quote from your latest LT section of the Week-end update: “Currently we expect a bull market peak between SPX 1650 and 1780 in late-winter to early-spring of 2014”
    Since we are at Int. iii of Major 3 of P3, we are smack in the middle of Cycle 1 after having traveled 1’000 SPX pts, or 150% from the bottom of SC2 in March 2009.
    Yet you anticipate the end of Cycle 1 to travel to the range 1650-1780, which means that the entire bull market of Cycle 1 will thus have travelled between 984 and 1114 pts, or 147.75%, respectively 167.27% from the bottom of March 2009.
    In other words, you expect the second part of the Cycle 1 bull market to only account for -16 points if it ends at 1650, representing -2% of Cycle 1 or 114 pts if it ends at 1780, representing 10% of Cycle 1.
    Don’t you think there is something wrong with this extremely lopsided assessment ?

  22. Hi Tony

    It looks like we could start according to you wave V up as premarket indicated some good gains today.

    Is it possible we reach 1670s in a B formation before wave C down to 1620-1630 to end “wave iv” , before we get wave V up to 1700 area ? What I mean is , it looks like the move down from highs is impulsive and this could be an a,b,c formation down to end wave iv?

  23. gokalg says:

    If we move past 1660, is it still possible that we may not reach minimum 1687 and truncate wave v

    and start next wave down. Thanks for clarifying.

  24. torehund says:

    Anybody into gold or gold miners; Oracle Ord sees a major bottom, and could it be a 5-3-5 finishedin gold…I loaded up on NUGT a couple of days ago ?

    • fractepper says:

      OK tore, I’ll bite- The 5-3-5 could be, and mid April-May major divergence is positive. But I see this shorter term of last week as still too overbought and wanting one more drop prior to giving up to the longer term positive momo.

      • torehund says:

        Fract, I bought into the miners through NUGT, maybe a little overbought too, but maybe less than gold itself. The gold and miners decline from top is a bit ragged, but if it is an acb decline then one should expect a descent retrace. Sure it can strart working on a large B and then decline in another ABC. But medium term it should retrace a descent amount of the fall from the top.
        Other than that I will advocate PSDV, the share climbs steadily whilst rsi is declining, a sure sign the rally has legs…As far as a major correction is concerned I have some shares that havent moved a lot yet, and a rally of this strength goes until exhaustion, when a whole lot of shares correct simultaneously. Haven seen these all green days yet but when they DO come one should be observant on flatlining shares…

  25. 5wavemodel says:

    It looks to me like AAPL made a medium term high at 465.75, and likely has started the next leg down. I have a target of 318. For those interested I have posted a chart.


    • blackjak100 says:


      You see no inverted H&S in AAPL’s future?

      • 5wavemodel says:


        Although I see the pattern on the chart, my count does not support this being a bottom. Best case bullish scenario would be a move to around 500. A short position, with a stop and reverse at the previous high(465.75) would seem to offer the best Risk/Reward in my mind.


      • CygnetNoir says:

        I think trade above 448 that holds with decent volume behind it will be the tell. Below 419 I wouldn’t want to own it, above 448 I wouldn’t want to be short of it.

    • I hate to disagree, but (for now) I do. Please see my count here: http://soulsurferusa.wordpress.com/2013/05/28/aapl-update-05242013-2/
      IMHO it appeared AAPL bottomed at 385 in a C-wave, where C was at the 1.618x extension of the A-wave. The move from 385 low to 465 high were 5 waves indeed and the move down to 418 was at the 0.618x retrace, suggesting a wave 2 (or B). Now an (bullish) ascending triangle appears to have formed with the upper level at ~445 and the start of the triangle at the 430 low or even 418 low; suggesting a breakout targeting at least 460 or 480. just my 2 cents for what it’s worth

      • 5wavemodel says:

        Thanks soul. A move above 448 may prove you correct. A move to 480-500 is possible. The 419 low may have been my Wave D, and would target a Wave E into the 480-500 level. Something of a zigzag ABC off the 385 low. I would think that would be the upside limit. Fwiw.


    • today’s pop and drop below 445 doesn’t look good for AAPL, IMHO… This could have been a b-wave up, where the move from 465-418 was an a-wave, and now we may get a c-wave down to same level or even lower (400); also see avi’s marketwatch update: http://www.marketwatch.com/story/volatile-times-for-apple-stock-2013-05-28

  26. liborval says:

    Hi Tone one more question – shouldt you upgrade your long term target for SPY? you still refer to 1650-1780 even when 1650 has been overcome and the bull market isnt over?

  27. blackjak100 says:

    Would prefer to see the bulls/bears to arm wrestle at the end of such a strong uptrend in an ending diagonal. Note this pattern is not required by any stretch. 1687 is min target if there’s no fifth wave failure

  28. 5wavemodel says:

    A move above SPX 1660 would still indicate a move to new highs, although the case for that scenario appears to be weakening. A move into 1655-1660 followed by a pullback probably means a move down to 1540.


  29. thoth8 says:

    Thanks Tony for the awesome work!

  30. alexhartley1 says:

    Thanks for the report Tony and for the housing one.

    I think we’re in Int. IV in SPX. I think gold could go to 1250s before 1540.

    I am short oil (and hoping for a sizeable drop in the next few weeks) and think if US futures rise over the bank holiday I will look to sell around 1660. If we go much past I will close for loss.

    Enjoy your bank holiday and to all the others in the US.

    • tony caldaro says:

      thanks Alex good luck!

    • blackjak100 says:

      I have to give a slight favor to the Int IV count starting as well. However, the one thing going for Tony’s count is the shallow retrace of minute ii should lead to a deeper minute iv retrace which is exactly what occurred. The other thing going for it is we really didn’t have a terminating pattern at 1687. I also believe there’s a good chance we print 1670+ next week as next week is seasonally bullish on low volume. How many times have we seen this price action in the last 4 years during a holiday? The million dollar question will be is it just a retracement or is it minute v? Minute v could truncate as well at 1670+. The bottom line is I expect prices to grind higher next week either way.

      • gokalg says:

        I have similar feeling but next 2 weeks being seasonaly bullish can propel it towards 1687. I thought if it is v then min target is 1687 what I understood from Tony response.

        What do u mean that 1687 did not a terminating pattern Please elaborate. Thanks for your post

  31. battista1 says:

    Good morning Tony ,

    first time i am writing from Italy , would like to thank you for your excellent work that you share with us , very much appreciated and thank you for all writers on your posts with interesting comments and studies

    i just had a very nice business trip in North Italy in a wonderful area with montains , hills and lakes , fantastic place that you may know , name should sound familiar


    have a nice weekend and holidays , thanks again for everything
    ciao , Mario

  32. fionamargaret says:
    • pas1968 says:

      PUG says; ‘The move from 667 to 1646 has been to rapid (4 years) to be near the completion of Super Cycle V’
      Does he mean to be near the completion of C1 of SCV?

      Looks like PUGs P5 top is about 12 months later then Tony’s?

      I suppose only time will tell who’s correct.

      • budfox9450 says:

        Both, are very Bullish market advisors – I’d hate, to make
        a call, which is going to be more correct. Ya know, it
        may just turn out, that both are correct – thru the adjustment
        phase. …

    • budfox9450 says:

      Thank you, Margret. The PUG does good work…

  33. pas1968 says:

    Hi Tony,

    I was just looking at your AUD weekly chart & unfortunately I’m lost with the labelling.

    What price action & chart labelling do you see happening with the AUD over the next 6 months or so?

    I can only assume when we enter the worldwide equities bear market (from 2014) the AUD will get further hit?


  34. Anonymous says:

    such a resiliant market here…..well when I say resiliant, I mean manipulated up. See chart here. >> http://bit.ly/10xgEVQ

    They will stop and nothing and bring more QE bullshit stories out to manipluate this market up. 1750 is coming on the market soon.

  35. No says:

    Tony, Thank you so much for all the fine work you do & sharing with us so generously.

    on the big picture: It took 75 years to complete SC1, but only 1.4 years for SC2 with merely 42% retrace (assume starting 0). To put it into perspective, this is like to say wave1 takes a full year (75×3.36=252, the number of trading days in a year) to finish while Wave2 only takes 1 week (1.4×3.36=4.7)- much like “flash crash” for W2. I’m not sure what role the time plays in wave counting or whether it is relevant at all, but those unusual ratios seem to suggest SC2 could still be ahead of us & we are still in a fifth of SC1. SC2, if retracing the normal 50-62% from your current target of 1780 for this bull market, would target 890-680 and take many years to unfold. would love to hear your thoughts on the possibility of this scenario. Have a fun holiday with your family/friends.

    • No says:

      o0ops, correction- your SC2 retraced 58% of SC1, right in the 50-62% range. just the time seems too short to me.

      • scorp100 says:

        No, I feel that fear is very powerful emotion. That’s the reason months of gain get wiped out in days. But that’s just my opnion.

    • tony caldaro says:

      Waves of a very large degree have characteristics.
      During the GSC 1929-1932 decline, a 220+ year bull market was nearly totally wiped out, 89% decline, in 3 years.
      So a 75 year SC decline can unfold in only 2 years, if the decline is steep enough. The 54% DOW decline qualified.
      Cycle wave bull markets usually lose about 45%-50% of their gains during a Cycle wave bear market.
      Could happen in a year, 1973-1974, or five years, 1937-1942.
      Time is not relevant during bear markets, only the percentage of decline.

  36. gokalg says:

    Given the seasonality IMHO next 2 weeks should complete the v wave up and iv is over. The only
    concern is that the drop from 1687 to 1635 area looked very sharp and could perhaps be considered impulsive. Do u still believe that the minimum target is 1687 if indeed 1v wave has finished. Thanks for your excellent update.

  37. Thanks tony! I have no time most likely to post my NYSE count, but the earlier update remains and I am uncertain if Int. Med. III ended or not. To be honest; I don’t think so since Friday’s close appeared rather bullish IMHO, suggesting a minute v. And I would like that 2.0 extension to be tagged since the market is not that sloppy. This would correspond to an SPX high of 1692 IMHO, which is right at your 1699 OEW!
    Time will tell.

    For those interested; I am short (SDS).

    Re: FB. It sure held above $24, by 8cents!!! Now I like to see follow through to the upside!

    Re: AAPL. Breakout of ascending triangle that formed over the past days off the 430 low appears eminent. Upper level of triangle is 445ish, targeting (at least) 465 on break out!

    Enjoy your weekend all! You are a great crowed!

  38. “I Just Let Things Slide”, roadmap for monday:

  39. M1 says:

    Thanks, Tony.
    It is good to know that you have an open door for this uptrend to be completed. =)
    Have a wonderful weekend. Enjoy the holiday.

  40. mkmason2013 says:

    From Tony’s Weekend Update, “If you invest only in the US stock market you may find all, some, and possibly none of them useful.”

    Tony, I don’t know whether to scold you or cry! (Motherly leftovers.) Information is ALWAYS useful! Always, always, ALWAYS!!!!! I think it’s many bloggers intent here to become skilled enough to trade any market in the world with a decent degree of confidence, therefore, this is the place to learn how to do it. There’s no such thing as useless information! All pearls!

    The rest of your Update is splendid, as usual. TTY next week and wish You and Yours a great Memorial Day Holiday and the best of everything.


  41. llerias7 says:

    Tony, the majority, like me, thinks we are in a minor 4 down ( till 1618 aprox.), before a last run to 1700´s to finish your Intermediate 3. What do you think?

  42. liborval says:

    thanks Tony for an update. you think that if the uptrend is done the downtrend – int. iv would go down to 1540 range it is cca 10%, no 4,5% correction anymore? and second question – can int. iii end with QE ending so we have a long uptrend before us and this week was just a noise before moving higher?

    • tony caldaro says:

      Correct the uptrend extended. Now a normal 9% seems to fit.
      Just noise BEN has no intention of changing anything at the moment.

      • liborval says:

        thank you Tony for reaction. by noise I meant the move down in the markets this week and that we are still in int. iii wave and this wave ends with QE ending so for int iv wave we can wait forever… how is your opinion on that?

    • tony caldaro says:

      Do not think QE 3 will end until Bernanke leaves office.
      Also the Gov’t could make QE 3 ineffective if it decides to cut expenses further.

  43. rolandu11 says:

    A special short-term indicator even gave a short-term buy signal on Friday (Dow, OEX).

    • mkmason2013 says:

      Thanks roland. I went long (longer) on Friday.

      • mkmason2013 says:

        Thanks M1. If we do see a drop, I’ll buy more.

      • going longer? you mean before we hit 1627? (if we do, that is)

      • mkmason2013 says:

        jb, I have some small positions that I’ve held since 2009, and a few of those, held for a couple decades. Unfortunately, most money is in 401k, so it’s either hold long or cash. I hope to be in cash before this Bull ends, but meanwhile, I need the growth. I swing trade (not a day trader, unless it’s overwhelming profit) with my regular account, which is not as large as 401k, (unfortunately). Bought tna yesterday in the 47’s, so am up almost 2% in one day. If it falls, I’ll add more. Next week is EOM and week after is 1st week in June. Between the ups and downs, I expect to eventually see inflows.

      • crazyworld2013 says:

        mk.. in your 401K you do have other alternatives other than LONG or CASH. it is risky but if you felt stocks were going to decline considerably then you can buy bear products single, double, triple leveraged products by direxion & proshares.. SH, DOG, TZA, SQQQ, etc..

      • crazyworld2013 says:

        mk.. just one more thought. TNA (& other triple leveraged stuff) are not buy & hold. i learnt that the hard way. I had bought TNA & FAS in the lows teens (2009-2010) and kept buying all the way up and rode them all the way up to crazy highs summer 2011, Due to family business I lost track of stuff and didn’t sell at the highs apr-july-2011). within a few weeks TNA & FAS were down 50+%, but had no cash to buy at the lows.
        in 2012 TNA & FAS both returned with an incredible upswing vengeance and TNA has made new all time highs. This time i have taken some profits and will patiently wait for a pullback. we have never know what event will trigger a major sell-off. Look at Japan.

      • mkmason2013 says:

        crazyworld: My 401k is employer match, to a certain amount, therefore, is under the control of my employer and ING; who provide about 6 choices of funds where I can place my money, designed by employer and ING, of course. That’s it. But I am grateful for the match.

        Regarding leveraged ETN’s, I too have been trading them a few years and know how they sting when they go the wrong way. A couple of us crudely referred to it earlier this week as “wanting to puke up on everything” sort of feeling. Thanks for your response and GL to you in your trading/investing.

      • rolandu11 says:

        Somewhere on the internet is a study that has investigated the long term leveraged ETFs. It finds that 3x ETFs on the Nasdaq and SPX were okay. (in the DOW only 2x, 3x not).
        However, there are particularly in strong falling markets formidable tracking errors (long lev. ETFs). I have investigated this and it does not look good. If this were not so, you could easily become rich by buying a long position and a short position (equal weighted) in leveraged ETFs and in a volatile market like the DAX.It would make about 10% / year, while the Index moves strong (Whether down or up)

        But maybe you could react in such a situation (crash) in time (short sell near the lows, buy additional long).

      • mkmason2013 says:

        roland, thanks for the info. on the study; I will look around for it.

        In short, I’ve found that the 3x etns have little to do with actual moves in the markets and more to do with ANTICIPATED moves in the markets; esp. uvxy. While vix can be dropping, many times uvxy is rising because traders are buying at cheap prices, and vice versa. It’s almost based more on sentiment (hourly, daily, weekly) than it is volatility itself. With other 3x, like tna, not so much on sentiment, but the rise does usually take place before the actual move up in the mkt, like Friday. While I will hold tna for a future move to the upside, if I’m holding uvxy and it turns against me, I drop it immediately and await another opportunity. I think this ability to let go of the position in a hurry has saved me losses galore. It can be a coin toss to be sure, and I don’t like to hold any of them for long (esp. uvxy), but have made some good money using them.

        GL to you in your trading!

      • rolandu11 says:

        Thanks Melinda, derivatives on the vix, etc. have a big problem with the roll over of contracts (as well as commodities). So in my opinion, such instruments should only be used very short term.
        Also GL to you!

  44. Pingback: Risk-Reward Report – week 21 | The Risk-Reward Report

  45. rolandu11 says:

    Nothing really bad happened so far. Now a test of the 0-line or fight with zero is possible. This is usually not bad for the medium-term outlook. I have something explained in early December. In mid-December 2012 / end of December 2012, we have seen an example for that. (Blue trendline from the highs 2000/2007, even older green trend line)


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