Smoking Securities

Half Baked High Finance

Posts Tagged ‘SPY

Twitter Ticker ($SPY)

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SPY090610StockTwits chatter was dominated by stocks of questionable investment value (JAZZ), so I’m taking a look at the S&P 500 ETF SPY for some perspective on the market.

Despite today’s pullback, the SPY remains in an uptrend, and is trading well above the upper Bollinger. Clearly momentum has slowed since May, but so long as the trend remains bullish, I will continue to purchase stocks trading at new highs with short squeeze potential.

Use this screen to find potential candidates like AutoNation (AN), VistaPrint (VPRT) and Synaptics (SYNA).

Written by chucklesamadeus

June 10, 2009 at 3:44 pm

S&P 500 Bullidex ($ES_F $SPY $SPX)

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This post is graphic heavy but the message is clear, increased shorting and liquidity are the modi operandi.

Until these charts begin to print X’s, the S&P 500 is not a safe investment.

Volatility is increasing relative to the number of strong performing stocks, reducing the odds of successful investment as market breadth wanes unfavorably. The number of stocks at highs is falling as less stocks rise and fewer trade above the 50dma. Raising cash and shorting leveraged ETFs like FAS is a sound approach in the coming week.

Written by chucklesamadeus

May 24, 2009 at 2:58 pm

S&P 500 Bullidex ($ES_F $SPY $SPX)

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bpspxvix090413Despite today’s positive close for the S&P 500, the Bullidex fell 1.79% to end the day at 161.3. This divergence indicates a minor weakening of the up trend as volatility increased relative to the percentage of rising stocks.

A new row of O’s in the far right column coupled with a declining blue line will signal a new downtrend.

My short gamma position will benefit from weakness as the 5 week rally has significantly reduced my hedge. In other words, being short SDS and SSO, the dramatic rise from March 10th has altered the long/short balance of my portfolio to favor a market fall.

If the market continues higher, I will cover some of my SSO short to stay closer to market neutral, reducing alpha.

Written by chucklesamadeus

April 13, 2009 at 8:33 pm

Posted in Bullidex, ES_F, SPX, SPY

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S&P 500 Bullidex ($SPX $ES_F $SPY)

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bpspxvix090408The S&P 500 Bullidex rose 4.35% to close at 139.5, signaling lower volatility and more rising stocks. The Bullidex hasn’t been this high since January, and with the March lows above the November levels, things continue to look good for the bulls.

Year over year, despite the dramatic fall in the price of the S&P 500, the Bullidex shows little change (compare the ‘4’ in ’08 with the ‘4’ in ’09). This difference is a benefit of tracking volatility and bullish percentages versus price alone.

Market risk can change without a discernible shift in price, and the Bullidex reveals those fluctuations.

Written by chucklesamadeus

April 8, 2009 at 4:24 pm

Posted in Bullidex, ES_F, SPX, SPY

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S&P 500 Bullidex ($SPY)

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bpspxvix090402According to the S&P 500 Bullidex, luck favors the bulls as the blue line rises. There are a few stocks making new highs as the uptrend grows stronger.

Though my indicator said sell two days ago, the intraday strength has kept me from getting too bold with such a trade. APAC, MEMS, SGU, CACH and CAST look like nice penny crack for the addicted, but I’m playing the leveraged ETFs intraday.

Written by chucklesamadeus

April 2, 2009 at 8:50 pm

Posted in BPSPX, Bullidex, SPY, VIX

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Short Selling Swaps ($SPY $SSO $SDS)

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When ProShares first released their Ultra ETFs, I got a quirky idea. Buy the long and short S&P 500 ETFs (SSO & SDS) in equal amounts to make a market neutral position. Ultimately I lost a little money and directed my attention elsewhere.

swapsale

Almost 3 years later I’ve come back full circle, but rather than buy these ETFs, I’m selling them.

With the S&P 500 down 30% since July 2006, the best trade has been to sell short. SDS is up 30%, not bad, but SSO is down 70%!

Why buy SDS when shorting SSO has more juice?

Moreover, you can hedge by selling SDS, rather than buying to cover. Since inception, this strategy is +40% (SSO -70% and SDS +30%).

Designed for daytrading, these vehicles should not be bought by investors, but can be sold short by bold risk takers who understand margin and compounding percentage moves.

Swaps are worthless contracts, and the convexity of these issues favors the sellers, not the buyers. Nevertheless, there are risks, and as such, this is not a fool proof trade. It can blow up big if the market trends in one direction for many days in a row.

Do Not Try This At Home!

Written by chucklesamadeus

April 2, 2009 at 4:44 pm

S&P 500 Bullidex ($SPY)

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I’m in Vancouver on a netbook, so I’m making today’s post quick.

bpspxvix090323The S&P 500 Bullidex rose 16.7% to close at 97.155, and a potential asset allocation is 19% equities (97/501). The falling volatility and increasing percentage of rising stocks is a positive change for investors, but the slope of the blue line is beginning to decrease, and suggests waning upside momentum. Nevertheless, so long as the direction of the line is up, the benefit of the doubt goes to the buyers.

Written by chucklesamadeus

March 23, 2009 at 10:31 pm

Posted in BPSPX, Bullidex, SPY, VIX

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