Shorting China - FXP

Maybe I have lost my mind since everybody I know is still saying China is where it is all at, but the charts just tell me bad things are in store there.

I shorted China by buying 1050 shares of FXP at $9.60.

Shorting Retail - SZK

The retail trade has leveled off, and is looking very toppy here.  This pattern is more of a modified head and shoulders pattern.  I suspect we won't see the RTH this high for a long time.  

To capitalize on retails demise, I purchased 235 shares of SZK at $42.66, which is the ultra inverse consumer goods ETF.

Buying Commodities

Commodities have been beaten up pretty good over the last month or so, but are at support now.  We are now in the process of filling a gap that was left back in October.

With this theme in mind, I decided to begin adding some commodity longs.  I started on the 27th by buying 1400 shares of the the double long commodity ETF DYY at $7.18.

On the 29th, I followed this same idea with a long on oil.  You can see by the end of the day, I was questioning this decision.  I am keeping this one on a short leash though.

I bought oil by buying 300 shares of DIG at 32.95.  I am betting on the upward trend continuing.

Buying Back Oil Trade by Selling DUG - $564.02 Gain

Oil fell as expected, and the price action of the USO etf reached support.  I aim to stick with the trend, and as of now, the trend is still up which means it is time to let this one go.

I had purchased 800 shares of DUG on 1/29/2010 at $12.09, and sold them on 12/26/2010 at $12.82 for a .73 gain for a net $564.02 on the trade.

Shorting Real Estate - SRS

There are a lot of lines in the sand out there in terms of prices pushing against areas of resistance.  Real estate, like the rest of the equity market, has enjoyed a tremendous rally since last March.  If you look at the real estate ETF IYR, you will see that it is showing weakness.  A reasonable expectation here is that it will turn lower for a while.

With this expectation in mind, a great tool to short real estate is the triple inverse ETF SRS.  I just bought 1250 shares at $7.93 with a stop at 7.20.

Shorting Oil - DUG

Oil is certainly weak in this current environment, as are all commodities.  This is the chart of the energy ETF XLE.  I love the double top here, and it could be a very nice short.

With that theme in mind, I shorted oil buy buying the ultra inverse oil ETF DUG by buying 800 shares at 12.09 with a stop at 11.75.

An Adjustment on TBT Stop

For the record, I did lower my stop on TBT to 46 on January 19.

Shorting Utilities - SDP

The XLF Utility ETF has traded against the 50% Fib level from the December 2007 high, and appears to be weakening.

I like this bottoming action on the ultra inverse utility ETF SDP, and thought I would pick up this little morsel before the big bounce!  I picked up 500 shares at 20.61!

First Trade - TBT

I have been watching bonds trade for some time.  In case you did not know, bonds and interest rates share an inverse relationship.  Over time, as bonds decrease in value, interest rates rise and visa versa.  

This is a chart on the $IRX, or the 13 week treasury yields.  

Now, just tell me, would you say there is more risk rates will go up, or go down?  (please don't say down)

There is a 20 year bond ETF called TLT.  You can see it is trading into a nice downward sloping channel.

Looking at this chart, I would have probably just preferred to wait till it reaches the upper end of the channel, but when you look at the 30 year T-Bill futures chart, it is near the top end of a channel, and there is a long way for it to fall below.

Soooooooooooo, I did not feel bad under the circumstances to demo a trade Thursday night.  The only question would be what is the weapon of choice.  I chose the double inverse ETF called TBT.

This is not a slam dunk near term.  Like I said, I may have gotten in early.  If so, I am only risking $1.00 on the trade.  My stop is in at $47.50 so my risk is managed.  If that level fails, I intend to re-establish the position when the price hits the S1 Trend line.