Dow Intraday pointing down while TZA pointing up (Update)

The Dow Intraday chart today, June 8th, is pointing to go lower, as can be seen by the chart above. As you can see by my identification of the "W" pattens and the slant of the "W" the direction to follow.

In addition I have placed a 2 month chart of TZA. For those new here, TZA is an ETF Ultra Short of the Russell 2000 Index. It is a Triple movement Ultra Short. TZA goes in the opposite direction of the Russell. So if the Russell 2000 drops 1%, TZA goes up 3%. As you can see from the chart below, this "W" pattern is slanted up and so is TZA. It has made a breakout to the upside. You might even want to look at a 1 year chart of TZA. Do yuo think money could be made here? :)


UPDATE 12:30pm
Well as you look at the Intraday of the Dow below you can see the last "W" pattern is slanting down. This usually says we are going lower than the bottom right leg of the "W". Notice the other "W" patterns did follow through on the direction of the slant after the "W" was formed. We shall see!


Update: 1:15pm Market closed
Well I made a mistake as I was in too much of a rush today in my last 1/2 hour update. I missed the larger "W" pattern which had formed and was so focused on the tiny one I forgot that the larger "W pattern slanted up. I drew it in with a Red dash line. I am very sorry for the error. I will take my time next time and not rush. No excuses. I'm just surprised that no one called me on it and pointed it out. You had your chance. Next time. :)

Friday June 4th stock market commentary

The jobs numbers came out this morning. It's obvious that the government was responsible for job creation by hiring Census workers. Private sector jobs were up only 41,000 jobs. This was taken by the market very negatively. The Dow Futures before the report were at -60, but after the report they dropped to -200. I expect this to start the decline in the markets and to follow my predictive pattern I posted here in previous posts and repost today below, as well as what the market has done since this prediction.. This is going to be a bad day and Monday should follow through on today's drop.

You will notice from the chart above that the Eurozones Blue Chip Index looks bad and was pointing down even before the Jobs report, but the jobs report drove all of Europe's Indexes lower. Most are down about 2.5% currently.

I will add Updates on this same post during the day with comments and charts, so come back and see what has been added.

I am thrilled I am on the right side of this trade now by selling my TZA Puts yesterday and Buying the TZA Calls. Remember TZA is an ETF Ultra Short of the Russell 2000 index, symbol $RUT. So buy buying TZA Calls, the purchaser believes the Russell 2000 will be going down. TZA is a Triple short, meaning that for every 1% move down on the Russell 2000 Index, TZA moves 3% up. It is one of the most leveraged Option plays in my view.


Update: 7:00am PST
With 1/2 hour into the trading day, the Dow dropped down as expected about 205 points, but has recovered only about 25 points off the bottom. I haven't posted the Intraday chart yet, but it looks like a "w" pattern was formed and is slanted down. So I believe we will take out the current lows of the day and go lower.

Update: 9:40am
As the Intraday chart above shows we did go lower this morning. But if you look at the red line I have drawn, it points to even lower levels between now and closing. In view of this I purchased more TZA Calls for October for $1.50/share with a Strike Price of $9.00



Update: 11:00am PST
OK, here is the proof in the chart above that we did go lower. I do not know how low we are going today but several things are noteworthy. First, the volume is high today for this time at 120 Million shares traded on the Dow. Also, the Put to Call ratio has moved from 0.60 in the first 1/2 hour of trading to 0.91 this hour.

Update: 12:40pm PST
There's 20 minutes to go before the market closes. The key today will be if the Dow closes at the lows. If it does, it may mean a reversal of the market next Monday or Tuesday. If it doesn't, we have more downward momentum to go. Stay tuned as we are down 346 points!

Using triple play ETF's to trade in the stock market.

Let me start first with what a Triple play ETF is. It is often noted as "3x". It is an instrument, which is based on an index of stocks designed to give you triple the swing of the based index. If the base index of stocks moves up 1%, then the Long ETF would give you nearly a 3% gain and the Short would give you a 3% loss. This instrument is most useful when the overall stock market is in a tight range of about a 2% movement over the period of a week or longer. We have been in that period the last few weeks.

I have gone through the list of all ETF's specifically looking for these Triple plays and will list them alphabetically below along with the basket of stocks they are based upon and whether they are a Bull (Long) or Bear (Short).

DZK Developing Market Bull 3x
EDC Emerging Market Bull 3x
DPK Developing Market Bear 3x
ERY Energy Bear 3x
ERX Energy Bull 3x
FAS Financial Bull 3x
FAZ Financial Bear 3x
MWJ Mid Cap Bull 3x
MWN Mid cap Bear 3x
TMF 30 Year Treasury Bull 3x
TMV 30 Year Treasury Bear 3x
TNA Small Cap Bull 3x
TYD 10 Year Treasury Bull 3x
TYH Tech Bull 3x
TYO 10 Year Treasury Bear 3x
TYP Tech Bear 3x
TZA Small cap Bear 3x

If you have been reading my Blog you know I currently own TZA and also some FAZ shares, as I believe we are going to have another correction and eventually test the low 7,000's on the Dow and possibly retest the 6,440 low of March. That will mean another loss for those long the market of 12% from here or even possibly 24%. Having triple plays if this should occur would mean gains of between 36% and 75%. Of course if I am wrong and the market goes up an equivalent amount I could lose another 36% or 75% as well. I just don't think I am wrong here. But the good thing is that there will be an answer as time will tell!