Trading ETFs

I had some success trading ETFs recently. Specifically the double inverse Proshares SRS but SKF and SMN may work just as well in the right situation. The first time was last Monday when the market started sliding right from the open and I bought SRS right away and sold at the close for a 27 point gain. The market had gone up five consecutive days prior on light holiday volume so I was highly expecting a market sell off.

Today the market chopped around all day until 2 pm when it went red and a half hour later the the sell off accelerated. The EOD (End of Day) Massacre was on, again.

This is how I traded SRS:

at 2:38 bought 40 @ 86.43 and when I saw the trend strengthening I added to the trade
20 @ 87.71
20 @ 88.28
20 @ 89.11
20 @ 89.91
20 @ 90.60
20 @ 91.68
20 @ 91.76
20 @ 92.21

for a total of 200 shares which I sold a few minutes later @ 91.74 as I wanted lock in the nice profits. Less than 10 minutes later SRS is making new highs and I bought 50 @ 93.36 as I was thinking there was 35 more minutes before the market closes, plenty of time for more action.
Again I added to the trade
20 @ 94.64
30 @ 95.04
20 @ 95.79
20 @ 96.78
20 @ 98.31

for a total of 160 shares which I sold @ 98.27

Profit on the two trades was 927 before commissions, not bad for a couple of hours work. Sure beats cleaning dirty carpets. What I did wrong was I added too many times in small increments resulting in commission cost of 112, YIKES! In the heat of battle I kinda lost track of how many times I added and as the trend got stronger I got braver as there was no big pull backs like there was earlier in the day. I never planned on trading 200 shares, mistake number one...no plan. Best to add one or maybe two large and be done with it.


Here's some points I've learned about day trading ETFs. Markets generally fall faster than they do going up that's why the double inverse ETFs will produce a bigger bang for you buck. In other words their ADR (average daily range) is very high. How does one decided which one to play? I answered that question today by looking at which of the three, SMN, SRS, SKF, was performing the best. Through out most of the day SRS was ahead of SKF by about 3% and SMN was behind SKF by a few %. So it was pretty easy to pick SRS today. SRS also has a larger ADR than SKF, followed by SMN. At the end of the day today, SRS had gained 24.6%. SKF 15.4 and SMN 7%. Until their ADR changes SRS will be the weapon of choice.

Oct. 31

There are 101 stocks from the short filter so I'll just post the top 30 by largest %gain.

Symbol Last %Chg
FDML 6.08 51.62
ODP 3.12 48.57
OMX 7.07 46.07
IVN 2.96 43.69
LNG 2.68 34.67
NAK 3.45 25.45
WLL 51.4 25.37
MBT 38.79 22.99
LM 20.76 22.7
HTZ 7.01 22.55
CEDC 27.61 19.78
IOC 13.75 19.57
CYCL 3.24 19.56
GPOR 6.99 17.68
DENN 1.8 16.88
TRMA 8.52 16.87
NCMI 7.03 16.01
RSX 18.9 15.6
VIP 14.03 15.57
ZINC 3.51 15.08
TLM 10.24 14.8
TTES 21.79 14.68
FTK 5 14.42
GMXR 36.54 13.83
EBHI 3.3 13.79
CPX 12.23 13.77
EXXI 2 13.64
ARGN 4.03 12.89
ITU 11.5 12.86

Oct. 30

48 shorts for tomorrow list in order by volume. A strong candidate is DIN a carryover from yesterday's filter.

Symbol Last
TGT 40.72
M 11.03
MON 87.93
PCU 13.35
EXPE 12
NIHD 21.6
RDS.B 56.93
FMC 42.1
BYD 5.63
FAST 39.12
SBAC 19.35
CMC 11.33
TV 17.5
BEAV 11.51
MNST 12.45
EGO 4.42
CBB 2.45
OMX 4.84
WMS 23.86
HTZ 5.72
WTSLA 2.79
EQT 32.6
SHLD 61.39
OSK 7.39
LPX 4.17
ASCA 8.17
GBN 1.15
BEBE 7.91
CHH 27.72
SYT 34.77
DBRN 9.47
ABG 3
RTP 175.81
PAL 1.53
CT 6.94
HSNI 7.96
WINN 13.92
SPAR 4.58
B 13.97
BWS 9.15
HIBB 16.64
TGI 44.86
FRPT 2.46
NAK 2.75
CBD 28.67
MTN 31.4
KALU 29.5
WBMD 28.01

Oct. 29

I don't know if I should laugh or cry.

Laugh cuz it's side splitting funny.

Cry cuz if that's the best we can come up with to potentially lead our country we are in deep doodoo.

Oct. 22

8 shorts from the filter:

HK
RRI
LINE
EXXI
CLNE
LXRX
NAK
XIN

I'm short CAL 17.91 from yesterday. Appears to be near short term resistance 18.65 so I have a stop just above there.

Other short ideas:
TSFG
MXIM
RDN
RJET
SBLK
CIT
ERIC
FTBK
MBI

Oct. 16

Short filter produce no plays since every thing got sold off hard today and hardly anything went up.

I shorted COH, CEDC and POT the day before and got stopped out on CEDC and POT with a 3% trailing stop before I left for work. Only shorted one, ES, before I left. When I got back at noon my two positions were making a hellva lot more money than I made cleaning a measley $95 job. Wish it was that easy everyday in the slotmarket. But today was no typical day, everything got sold off and hard like 10 to 20%. Easy as shooting fish in a barrel playing the short side.

I'm still holding COH and ES overnight with a trailing stop. At this moment futures are down significantly so it looks like wall street will get flushed again tomorrow.
Kind of hard to come up with any good short ideas since everything got slaughter already. AZO closed at 101.11 which is quite a ways from last Friday's low of 93.55 so there's at least 8 buck left to go.

Oct. 15

There are 43 stocks from the short filter for tomorrow. Financials dominate the list probably due to the government injection of cash into the banks. Yesterdays list of 15 shorts resulted in 14 winners.
List of some of the highest volume ones.

C
NCC
BK
SLM
HIG
DAL
STT
DFS
SFI
UBS
NWA
AAI
KFN
SDA
ISRG
PGF
MWR
MPWR
WEL
PAA
TPP
JPS
AYR
PVR
TLK
EPB
WBD
OSK

Plays for March 24

Shorts:

FRE
HALO
TLB
ARRY
SMBL

Out of hibernation

YTD results for the Longs/Rocket is
There were 137 total stocks entered. Of those, 134 or 97.81% were complete and 3 or 2.19% were open.
Of the 134 completed trades, 60 trades or 44.78%resulted in a net gain.
Your average net change for completed trades was: -0.51%.
The average draw down of your approach was: -6.86%.
The average max profit of your approach was: 7.03%
The Reward/Risk ratio for this approach is: 0.89
Annualized Return on Investment (ROI): -125.49%

YTD results for the Shorts/Crash is
There were 144 total stocks entered. Of those, 143 or 99.31% were complete and 1 or 0.69% were open.
Of the 143 completed trades, 93 trades or 65.03%resulted in a net gain.
Your average net change for completed trades was: 1.51%.
The average draw down of your approach was: -4.85%.
The average max profit of your approach was: 6.28%
The Reward/Risk ratio for this approach is: 1.67
Annualized Return on Investment (ROI): 372.33%,

YTD to 3/18/2007

Notice the -125% ROI going Long in this down trending market and the +372% ROI going Short. Reminds me, somebody saying "Go with the flow" or was it "The trend is your friend", same thing. Bottom line, going long in the midst of a bear market, you're gonna get your balls handed to you. Going short will make some nice bank. For this particular filter anyways.
With that said here are the Shorts for tomorrow:
FNM
FRE
ISTA
ENOC



Results for the year 2007:
Long/Bounce
There were 367 total stocks entered. Of those, 366 or 99.73% were complete and 1 or 0.27% were open.
Of the 366 completed trades, 200 trades or 54.64%resulted in a net gain.
Your average net change for completed trades was: 1.82%.
The average draw down of your approach was: -4.64%.
The average max profit of your approach was: 5.35%
The Reward/Risk ratio for this approach is: 1.87
Annualized Return on Investment (ROI): 449.61%


Short/Crash
There were 310 total stocks entered. Of those, 310 or 100.00% were complete and or 0.00% were open.
Of the 310 completed trades, 199 trades or 64.19%resulted in a net gain.
Your average net change for completed trades was: 1.92%.
The average draw down of your approach was: -5.36%.
The average max profit of your approach was: 7.39%
The Reward/Risk ratio for this approach is: 1.76
Annualized Return on Investment (ROI): 474.49%