All the major indices are still within weak downtrends. But what really made the day different today was that the Nasdaq was the only major index to close below its 200 day moving average line. So the Nasdaq is leading the other major indices lower. That’s a bearish sign folks.
My new pick that I bought for my personal trading account today is TVIX. This is a 2 times leveraged play on the VIX. Today, TVIX was up 17%. But that’s nothing for this volatile ETN.
I’m betting that the close below the 200 day moving average today on the Nasdaq means that this market is going lower. When you think about it, XLF (Financials) broke its 200 day moving average a couple of weeks ago. We know that XLF has been leading the market lower so we could very well see a break of the 200 day moving averages on the major indices within the next few days.
The Industrial Production report came out today and the numbers were below expectations. Worries about a global economic slowdown are escalating. Evidence of the slowdown was not only from the U.S. but ranged from declining industrial output in Germany and the UK to slower exports from China. This increased worry should translate into an increase in volatility which will benefit TVIX.
This is a high risk, high reward play that is for stock trading masters only.
This pick will either make us a lot of money and you guys will think I’m cooler than a polar bear’s toe nails, or it’ll rip off your man-hood and have you crying like a little girl.
TVIX is in an uptrend and on a good swing move up, we could make 20% or more in less than a week.