Thursday, April 9, 2015

[UVXY] update

While Mr. Market has been whittling away at UVXY, little has changed with the S+P 500 since the previous update on it.   Nobody knows exactly when the herd will decide to turn south so in my usual fashion I simply look for places where it is likely to turn south and then set up the machine gun in order to have a clear shot at it when it does.  If I'm wrong, I tear down the machine gun quickly and look for the next likely spot for an ambush.  I do not just sit there and wait and hope.  Either my model will be correct or it will be wrong and a properly placed bet based on EW principle will quickly let the gambler know if the bet paid off or not.

In this case, UVXY has been in a big falling wedge for  several days now and this tiny throw under looks like it could be the end of the wave shown.  I recommend to have very tight stops on this bet, just a few pennies down to say $12.75.  In that way I expose myself to all the potential upside without much risk to the downside.  IMO this is the only way to win against the Wall St. machine.


Anonymous said...

Hi captain, did you got stop out again today? UVXY is driving me insane with her violent mood swings lol.

The Captain said...

Yes, at 12.79. Back in at $12.56 with new stops at $12.52. This bottom fishing game is just not that difficult but you have to stay on top of it. Right now I have the time, soon I will not. Job offer is pending so pretty soon I will have to slow way down on the day trading.

The Captain said...

I should add that this could very well be the wedge throw under. A move back into the channel would be the first buy signal confirmation.

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