Matt, I've checked the 13 and 55 EMA system on the 30-minute chart of SPX, and it looks like it would produce one or zero trades a day on average. It worked well during the last 4 trading days, which were characterised by a lot of whipsaw signals. I wonder if the system can be fitted specifically for SRS (and SKF) by tuning in the period parameters.

I would like to use this system, as my current work load at works seems to leave me with less opportunity for day trading. Thanks for your idea and comments on this subject.

http://financialsense.com/Market/wrapup.htm

From that analysis also follows that one need not enter the ETF before the underlying index completed the 50% of its move down. Then the level under-performance due to inverse compounding would be exactly balanced by the sit-out time of the trader. In our case of the projected move from 812 to 900, the trader should need to stay away from the ultra shorts below 855. Hence today the entry at 865 or higher was a good trade. I still reckon that 50 on SRS was a good entry. I started scaling in at 60, I need to reduce my cost basis on that position by trading in and out of the stock, if I can.

Yes, one has to trade those ultra shorts rather than to buy and hold them. For example, XLF retested the November lows last week, but SKF went only up to 200, not to 300 like before. That's from about 100. So SKF lost about 50% of its gains by doing a round trip.

The only question that remains for me, is whether or not one could trade in and out of it to beat the underlying index (XLF, in this example). So far I hold a conviction that it is doable. If not, then indeed using the normal ETFs is the way to go.

What that means in practice is that one needs to use stops and technical analysis. If SPX is about to go to 900, SKF would go down to about 100. I don't know about SRS, but $DJR should go up to about 150 before it reverses.

I will have to see how gains are held tomorrow. Investors Business Daily calls today a follow-through day to a rally from Thursday or Friday lows. It could be a bona fide rally or a carefully engineered bounce.

Thanks, Chris. So you use regular size stops (4 to 6% is what books would recommend). A wide stop would mean at least 10% to me.

I know what you mean here. Yes, I am not going to hold SRS or SKF for longer than a couple of weeks. The period of consolidation was not lengthy, so this upside move does not much power in it, in my opinion. I am prepared to be proven wrong here, of course. I will have to sell then and enter at a lower price.

Sure, _if_ we get there. That would take $djr is 200s, levels not seen since September.

Chris, what is a wide stop in your definition? 15, 20%?

I use no margin in trading. However, if SRS gets to 25, I'll use all of it. That would be a trade of the year (a 5 bagger at least). I hope you are right :-)

matt, you are right. I have little luck with choosing stop sizes for those issues, so I'm going to position trade them. I will sell if 877 is lost or we rest the breakout line. I cannot find anything more intelligent in this situation. If you have any suggestions, I am all ears.

I side with you here. SKF below 130 and SRS in low 50s are terrific buys. I bought those and am going to wait. In the past four months, a big up day was followed by a down day.

It's almost there. By your request :-)

Short covering is not a rally: it's only a one-day bounce. I would be surprised if tomorrow we will get a continuation.

I cannot find a real-time feed symbol for $tick in either Scottrade elite nor TDAmeritrade. The same goes for $cpc. Has anybody found them outside the TS?

Carbon dioxide emissions are not a problem. Decimation of rain forest and ocean plankton that absorb it, is. You can keep your SUV for the next 1,000 years if you can find enough crude oil to drive it :-)

Thanks, Chris, for your comments ! I am learning from you and others here. I am being a little ahead of the game most of the time, it seems.

at resistance 867. TLT could be reversing at this point, I made  some profit on it. SKF is 17% down today and was down yesterday. I am trying my luck at a possible reversal here.

Ravun, what's your stop loss threshold that you are applying in your system? Merely curious. Thanks in advance!

rp, I took your suggested trade yesterday with TLT. Your timing was right and it worked. What's your target for it?  I have 110 in my mind. Thanks for your information and the trade idea.

Matt, So a close above 852 will confirm the bullish scenario? Also, how much upside could this market realistically have? I am positioned on a short side with a swing position now. Thanks for your information and your constant intraday updates. I really appreciate your postings, they do hep me with my trades.