My continuing adventure of a Bull wrapped in Bear clothing

Today was painful for the bears, but if we played our plan as laid out, buying positions between 33.50 and 33.75 on the QQQQ’s we would be ahead of the game. It takes great discipline to execute according to plan. A great way of doing this is learning how to place complex orders via your broker. Check this for more info.

Here is how our chart is looking as of the close on April 17th:

EF4-17-2009 4-13-15 PM

The official high of the day for QQQQ’s was 33.50.. That means we should have added a tier1 short at the high of the day. As I wrote last night I pulled the trigger early (undisciplined) and bought a tier1 of QID at 39.71. I added another tier near the high of the day which has my average price now 39.55 on the QID. A nice fall off at the end of the day leaves us with a $0.10 profit on the trade thus far.

I also added some BGZ which is a 3x short fund. I added that early in the day. My BGZ has a loss right now of 1.07/share. (My price is 47.13). This is a 10% position. (30% since it is 3x).

Symbol Average Price Closing Price %Gain % Portfolio Gains/Loss%
QID 39.55 39.65 0.2% 50% 0.1%
BGZ 47.13 46.31 -1.7% 10% -0.17%
Cash 1 1 0 40% 0.07%

So day 1 on our QQQQ’s trade we are down 0.07% on the portfolio.

Our goal from here is a 5-6% pullback to that 31.83 level. That would correspond to the following returns if we do not add or adjust any of the current positions.

Symbol Average Price Closing Price %Gain % Portfolio Gains/Loss%
QID 39.55 43.41 9.8% 50% 4.9%
BGZ 47.13 52.65 11.7% 10% 1.17%
Cash 1 1 0 40% 6.07%

Goal = 6% return on portfolio for this trade.

We still do not have stops, except to say that if QQQQ’s get above 35 we will sell. I’ll work that out a more formal risk management strategy over the weekend.

The last picture I will post is the Zweig Breadth indicator that now is officially overbought. I called a close-enough yesterday, but evidently Zweig wanted to become official. You can see that this current bull run has put the indicator overbought several times. This is actually a rare occurrence for this indicator to move into the overbought area at all. It did it once before in November last year, and before that it was in 2004, so to get 4 overbought triggers in a one month period is very very rare. I will do some research on those but I believe I will not find an occurrence like this at anytime. Some more work for me to do this weekend.

ZBT4-17-2009 4-21-42 PM