Innovation in the exchange traded fund (ETF) arena has opened up incredible opportunities for traders and investors to participate by using among others:
- Commodities as the underlying;
- Leveraged to the movement of the underlying;, and
- an inverse (opposite) move to the underlying.
Leveraged ETFs seek to magnify the returns of an underlying index for a single day. The level of magnification is included in the fund’s description but they are generally 2x or 3×. They can be upwardly leveraged or inversed.
They can track any asset, such as stocks, various market sectors, bonds or futures contracts. T
These innovations allow investors to participate at any point in an instruments cycle, whether long or short, as long as it’s moving, right?
Current Opportunity: VelocityShares 3x Inverse Silver ETN
The ETF offers us 3x daily leverage, inverse to the performance in the silver price. This makes DSLV a powerful tool for expressing a bearish outlook on the metal.
With the US Dollar looking oversold and potentially rebounding in the short term, we could see precious metals come under pressure.
Technical View: The price of the ETN has declined from it’s recent short term peak of $30.51 on 12-Dec-2017 to the current level (at the time writing) of $23.15. This level coincides with the channel support as well as the incline in place since July 2016.
Buy DLSV at $22.90/23.15
Take Profit: $27.80
I want to wish you a very successful and profitable year ahead!
The second-half of 2017 was one of the slowest patches I have ever personally experienced in the markets, but that isn’t some that that disheartens me – it’s just a reminder that we have to be flexible.
Markets are like a drum beat; sometimes steady and slow, sometimes fast-paced and erratic, but they are also cyclical. All you need to do is haul up your own charts and see for yourself. Sometimes prices rocket off in a direction, and other times they do very little.
It’s the patient trader who recognises that there are periods where we make a lot, and other periods where we need to sit on our hands and does whatever is required in that period, who sees long-term success.
There is no shortcut here! You cannot will the market to do what you want.
In that light, I wanted to share a quote that was shared with me not too long ago that I have found very useful and sums up a lot of the ups and downs of trading.
“The goal of life is not always to maximize your returns; sometimes, potential gains must be balanced against the possibility of losses. That’s why we need to occasionally consider minimizing regret.”
– Barry Ritholtz
So Looking ahead:
Personally, I see 2018 having three major themes for myself.
1. Keep on doing what we’ve been doing.
Our managed products go into 2018 with 7 months of small, but consistent wins behind them.
I think 2018 is finally going to see some nice breakouts in price and you can be sure that we’ll be riding those waves.
I am automating a lot of my own trading.
My goal isn’t for the ‘bots to take over. Instead, I am using the technology available to:
- Aid me through statistical learning models in improving trading performance
- Alert me to new setups
- Manage open positions
Yep, I’m going there.
I think 2018 is going to be a very important year for crypto-currencies. If you’re an active member of our trade room, you’ll know that we often chat about crypto markets, for many reasons. Cryptos, and the technology behind them, are going to change the world (in some ways they already have).
So, lets get this 2018 started.