This video attempts to both debunk as well as confirm some of the negative stigmas associated with buying & holding leveraged ETFs for more than a day trade. Real-world examples are used with two of the most notorious offenders when it comes to the price decay that can result when holding a leveraged ETF for an extended period of time, LABU & LABD (3x bullish & bearish biotech ETFs) as well as NUGT & DUST (3x gold miners ETFs). playback speed can be increased in the settings to reduce video duration
The most recent XBI/LABU short trade was stopped out for a minor loss of 1.25%. A very tight stop was used as this most recent short entry/re-entry was based on the assumption that XBI had just started a wave B down on an ABC corrective wave (which didn't prove to be the case, hence the unusually tight stop). 60-minute chart: XBI 60-minute Aug 24th
XBI slightly exceeded the revised suggested stop yesterday (which was lowered to the entry point for a breakeven on the trade). In hindsight, l should have left a little more room for that expected counter-trend bounce. As the charts still indicate more downside, XBI or LABU will be added back as a new Active Short Trade here with a stop above yesterday's high of 63.76 & a new price target of 58.61 (LABU current price/entry on the new trade is 43.37). Updated 60-minute chart. XBI 60-minute Aug 16th More of the rationale behind my thoughts on this trade are [...]
This video provides a brief update on the active XBI/LABU short trade as well as a discussion on some of the things that I look for when trading off the 60-minute time frame. Please log in or sign up for your free 3-week trial to view.
While I plan to leave 60.10 as the sole & final target for XBI/LABU for the time being, with the 60-minute trend indicators recently flipping to bearish, one might opt to lower stops & hold out for either of these two additional potential targets. XBI 60-min Aug 11th With that being said, should each (or most) of the Big 5 leading stocks in the Nasdaq 100 break down below their respective 60-minute trendlines that were posted here yesterday, then I may decide to extend the price targets on the XBI/LABU Active Short Trade. At this point, the suggested stop [...]
The following notes & charts discuss the entry criteria, suggested stop & price target for a trade in XBI (biotech ETF) or LABU (3x bullish biotech ETF). Please log in or sign up for your free 3-week trial to view.
For those looking for short exposure or hedges to a portfolio of longs, here are a few of the sector ETFs that stand out as short-side swing trading opportunities. While I may add some of these as official trade ideas, I don't have the time to annotate all the charts & list suggested stops & profit targets right now so I figured that I'd pass these ideas along as unofficial trade ideas at this time for those interested. As usual, my preferences is to short the 3x leveraged version of a sector ETF that I expect to hold for more than [...]