The Rogue Investor » ETF

Stock Pick: Supply in UUP

Alex — Mon, 21 Dec 2009 08:37:36 +0000

Just after doing a post on bullish volume in UUP, supply showed its wicked face as major weakness is now apparent.

The weakness comes after UUP made a significant advance on Friday but closed even, on the low. Not only was the price action terrible, but volume was through the roof signaling that the professionals had their hand in this event.

As always, wait for some confirmation on Monday, but the fundamentals are there to think that the dollar could resume its fall.

If the dollar does being to slide, it could cause the perfect storm that could bring the market to its knees. Keep your eyes open and be nimble on your feet.

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S&P Finishes Off Week Up, Smart Money Isn’t Buying

Alex — Fri, 06 Nov 2009 22:47:28 +0000

The S&P 500 gained 3.2% this week which is definitely a strong move to keep the up-trend is intact. The only red flag is the decrease in volume which suggests that the Smart Money isn’t buying the rally.

As I stated yesterday, I anticipate that the market will show weakness in the near future and we could see a decent drop-off in prices after.

What does it all mean for you? So far, hold all your longs that are still trending up, don’t add any new ones, and keep an eye out for strong short ETFs and other weak stocks.

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Market Caps Off Terrible Week With Full Confirmation of Correction

Alex — Fri, 30 Oct 2009 23:50:49 +0000

And just like that, the rally is history. Today was the second big day of selling as the major indexes closed down over 2% – some closer to 3%.

The market is in correction and now the big question most investors will have is how far will it fall. Nobody knows, but all we need to do now is ride the wave down.

I added positions in the two ETFs I highlighted previously after they continued their breakout.

IBD suggests that we not short on the downside breakout, but rather on the first sign of weakness after the first pullback. Right now we have a little over 4% before the S&P hits the 200MA which could provide a bounce so I am still in favor of holding ultrashorts that would give us enough room to hopefully never fall down 5% on a pullback.

Otherwise, be patient and wait for the pullback. Regardless of what you do, know that we are in a down-trend now and could be for quite some time.

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ETF Breakouts: SSG & TWM

Alex — Thu, 29 Oct 2009 03:06:29 +0000

I’ve got two good looking breakouts today. They are both ultrashort ETFs with one tracking the semiconductor sector and the other relating to the Russel 2000 index.

Here is the chart for the second ETF:

I really like the look of both of these charts. We have great looking volume that is increasing as the ETF moves higher, a strong move above the 50MA (which hasn’t been crossed in a good long time), and IBD declaring the markets as “in correction” so you can expect the move to continue.

Both of these are at great buy points for me and I’d expect to see them finish the week strongly.

If you aren’t interested in the volatility that comes with the 2x ultrashorts, you can find the 1x shorts version of TWM in RWM.

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Chart Analysis: UUP Bullish Dollar ETF

Alex — Tue, 27 Oct 2009 06:31:47 +0000

These days there’s no question that the dollar has been losing its value. For the last seven months the dollar has been on a down-trend with no signs of letting up.

The chart above has the most recent trend channel that has been tight and certain. The most interesting thing about this new trend is that the volume has been steadily increasing and is currently near all-time high levels.

Here is another, zoomed in view of the chart:

The focus on this chart is the move on Monday in which the volume more than doubled average volume and pushed above the 20MA. This is a good sign because with the major moving averages (20, 50, and 200) acting as points of resistance when on top of the stock, the smart money normally either gaps above or throws major weight at the stock which can be seen by a jump in volume.

Unfortunately for this ETF, we see numerous points at which the price has briefly popped above the 20MA only to fail to hold the ground and fall back below.

The difference with this latest pop is that the volume is more than double of any of the others. This volume does appear to be healthy and that is what makes this chart stick out to me.

As with any major move in a stock, the key is to see the following day’s action. Keep an eye on this guy and let’s see if we are in for a legitimate turn around.