TommyIV's ETF trades and thoughts

[TommyIV]

I'm using this thread as a memoir of my ETF trading. For the most part I trade more aggressive leveraged ETFs talked about in the ETF Primer page. With these riskier ETFs my game plan has been to find entry points for a short-term position. I don't like to be exposed for too long in these ETFs as they naturally lose value over time and sitting on the wrong side of the move can lead to big losses. I take small gains and let them add up.

As with most trading the psychological struggle is getting out of a bad position and feeling defeated when missing out on gains. For instance my latest trade was a win yet a miss. So it was hard to enjoy the gains. But I recognize this as a mental block. With the recent chart activity I saw an opportunity to buy SDS while the market simmers down. SDS performs -2x what the S&P 500 does. I bought SDS at $29.24 a share to eventually sell yesterday (10/1/19) at $30.02 a share. That 2.67% gain felt like a win at first but short lived. The market continued to fall and the ETF closed today (10/2/19) at $31.36 a share. That's 7.25% greater than where I bought it.

But I believe players who continually go up to bat trying to hit a homerun will strikeout a lot. I will continue to try to play it smart, lock in gains, sell bad positions, and be selective of entry points. I'll use this thread to document all my moves starting today. The good and the bad. These are not suggestions. I do not claim to be an expert on trading ETFs but rather am an enthusiast who is relatively young enough to afford big losses. I will begin documenting my return from the inception of this thread.

I'm currently all in cash waiting for the next entry point.

As of 10/2/19 my ETF trading return is at 0.00%

 

[TommyIV]

Jumped into SDS Friday expecting a bounce off the 50-day EMA. I'm using the SPY ETF chart which SDS follows the inverse of and doubles the return (-2x). The open gap from Friday's open and the test of the moving averages was good enough to me to jump in at $30.16 a share Friday.

The 50-day EMA did not hold Friday but the 20-day EMA did so I held the position. I sold first chance this morning with a gap down open and the filling of Friday's gap. Stocks have been so easily kicked in any direction at a moments notice so I was happy to lock in the gains well knowing there is a good chance the index may fall more to test the 200-day EMA again. In fact that seems to be the direction they are heading in now. I sold at $30.73 a share for a 1.89% gain.

Since 10/02/19 my ETF trading return is 1.89%.

 

[TommyIV]

Fighting an urge to buy TZA at today's close... I'll make a chart instead to distract me

 

[TommyIV]

Why I wanted to buy TZA today and why I didn't

TZA is an ETF that moves at a triple inverse of small caps: -3x. Very aggressive ETF. Small caps gapped down today and ten minutes to close or so I wanted to jump in. At that time the index was trading around $47.19 a share and was down more than 6% from Thursday's close. I'm personally pretty bearish for stocks lately so a day of excited bulls to me is an opportunity to get in to catch the downside follow.

But I also realize how sensitive the market is to the U.S. and China trade negotiations going on right now. ANY good news over the weekend and I'd expect the action of early September to be my fate and I'd be looking to exit a very aggressive ETF that would have taken out most of my recent gains if not more. To flip the coin the reward could have been just as great (we'll find out next week) but I had the introspection to realize I was gambling, no matter my intuition of poor conditions for stocks. I'll be kicking my self a bit if this index bounces to close that new gap on Monday but I would be kicking myself harder if I got stuck in a bad trade.

In the ten minutes I made the chart to when the index closed the ETF jumped up 1.29%... closing just below its 50-day EMA

 

[TommyIV]

Bought SDS at the close today for $28.85 a share. Found my self feeling profoundly bearish that I was playing with charts just trying to talk myself into the trade. My logical brain sees the possibility for further upside in the S&P 500( especially with it being the meat of earnings season) and even a better entry point if the price tries to match September's highs. But as the close approached and prices remained stagnant near the highs of the day, I went ahead and locked in the price.

I'm hoping for a pull back tomorrow or the next couple days to solidify a gain, but won't be too eager to sell a loss until the index has established trading above the September highs.

 

[TommyIV]

I chose to get out this morning while the indices are still trying to decide a direction. Sold SDS at $29.06 a share. I am still bearish but wanted to solidify gains. Will be looking to jump back in if prices rise to re-test September highs.

This SDS trade led to a 0.73% gain.

As of 10/2/19 my ETF trading return is 2.62%

 

[tsptalk]

This SDS trade led to a 0.73% gain.

No longer worrying about covering commissions is big. A gain, is a gain these days. Thanks to Robinhood for starting this trend!

 

[TommyIV]

Quick in and out today with the S&P 500 charts gap up at the open. I didn't buy at the lows nor did I sell at the high but caught the middle ground. Bought SDS at $28.76 a share right after the open and had already sold at $28.88 just before 10:00 am ET when the gap closed. Got out quickly because I didn't want to risk a quick bounce after the gap was filled. I felt better to take profit for now and be okay with missing out if the indices fall further.

The short trade resulted in a gain of 0.41%

As of 10/02/2019 my ETF trading return is 3.06%

 

[TommyIV]

Bought SDS at $27.25 a share today. There was no major technical opportunity I saw from the S&P 500 chart. I just feel stocks have been overbought this month and are beginning to slow their pace all while we are seeing headlines of possible trouble in the trade deals which has been a driver of the gains lately.

 

[TommyIV]

I've been holding SDS for more than a week now; not a tactic I try to emulate when trading leveraged ETFs. I've been holding onto my bearish ideology to justify holding a currently losing trade; SDS is currently priced $27.02 a share and I bought it at $27.25. However every time we see a pull pack in large caps that has the potential to turn this into a winning trade, dip buyers have come and reversed the action no matter how unjustified I see it.

I may be losing my wit over this but I still see the action potential for a pull back in the near term. For the time being I'm waiting for a test of the 20-day EMA in SDS for an exit point which currently sits at $27.53. Realistically I'm looking for anything over $27.43 to lock in some gains. I'm fighting the trend right now which is usually a bad idea but I sincerely think I'm better off fully invested against than with the market in these conditions.

 

[TommyIV]

Gave myself a short leash this morning. Put in a trailing stop of $0.11 at today's open to ensure this trade at least didn't end in the negative. Four minutes into today's trading hours that ended with my shares selling at $27.38. Not great considering how long I was in this trade but happy with a 0.47% gain when this trade was down 3.89% last week.

 

[TommyIV]

Thoughts:

Since starting this thread on October 4th my gains have accumulated to 3.56%. What do I think about that? Gains are always better than losses but comparing related values will give that number more meaning.

TSP Funds October 4th to December 5th: F-fund: (-0.59%), C-fund: +5.97%, S-fund: +6.68%, I-fund: +6.50%

All three TSP Stock fund have outperformed my trades. Sweating entry and exit points have cost me more than putting money in any of the TSP stock funds and forgetting they exist. My only win is that I beat the F-fund by a decent amount.

ETFs SSO and SDS October 4th to December 5th: SSO: +14.10%, SDS: (-12.63%)

The SSO and SDS leveraged ETFs are primarily what I trade so its essential to look at these. Had I sat in SSO for two months I would have quadrupled my return. However had I sat in SDS the opposite would

obviously​

be true.

What I take out of this is I could have benefited from being more bullish the last couple months. Easy to say now but I had strong feelings (still do to a degree) that a correction was possible and didn't want to get caught in the cross fire. So my tactic lately was timing SDS trades. In fact I only traded SDS the last two months. SDS may have lost 12.63% over the last two months but by timing my entry and exit points I put together a 3.56% gain. The fact that SDS is the leveraged inverse of the S&P 500 made me feel more protected against a correction. Sharp declines would be decent gains but its unlikely to get caught in an inescapable loss shorting a major large cap index.

I hope to get more creative with trades to come while remaining patient and keeping trades short-term.

 

[TommyIV]

Bought and sold TNA in less than a two hour span today. This morning I bought the ETF TNA at $69.96 a share. I wasn't planning on holding the position long but didn't think I'd sell so quickly either. Less than two hours later the trading action seemed over extended and I wanted to lock in the quick gains before it pulled back. I sold at $70.59 a share for a 0.9% gain.

I'm not feeling tremendously bullish but I noticed small caps were lagging large caps at the time I bought so I was expecting them to catch up; they ended up outperforming by the time I sold. I did sell TNA a penny off its highs before a bit of a pull back but it seems to be climbing back at the moment.

 

[tsptalk]

I sold at $70.59 a share for a 0.9% gain.

Nice. Doesn't seem like much, but with no trading commissions anymore, even making that once a week would be near 50% annualized return.

If it were only that easy.

 

[TommyIV]

Been sitting on the sidelines for a while as far as ETF trades go. But today I took a very aggressive move buying TNA at $16.19 a share. The ETF has been getting clobbered since this sell off began and is down more than 30% just today. I'm betting on a bounce back after another dramatic day. Not the most sensible move but trying to take advantage of the volatility and this seemed like an opportunity. I will likely jump out as soon as makes sense.

 

[TommyIV]

That trade went south quick.. not surprising given the nature of the market. But I went ahead and bought more near the close for $14.45 a share giving a new average of $15.84 a share all together. Small caps seem so drained but its definitely not a pretty chart to buy into. We'll see if turnaround Tuesday can prevent this from becoming a disaster move.

 

[TommyIV]

Sold TNA today at $16.10 a share. Initially bought the ETF at $16.19 a share mid-trading session Monday, but as markets kept falling I bought more shares at $14.45 near the close. All together my average share price was $15.84. I sold all of those at $16.10 during today's swings in TNA. The final gain on the trade was 1.64%.


Felt I was missing out on the fun with this wild market so when Monday's losses were adding up I thought I'd catch the recovery rally we've seen routinely after the large sell-offs. TNA wasn't the best choice nor was buying shares in the middle of the worst days in decades. Best case would have been buying all my shares at the close Monday. But I will take the gain and look out for more short-term opportunities.

 

[TommyIV]

Bought SDS at $29.41 near the close. Turnaround Tuesday please.

Shorting large caps because there is too much drag on the economy to justify a second week like last week. Might get out early tomorrow. Hate to be too exposed with this degree of volatility.

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[TommyIV]

Just sold SDS for $29.94 a share. Not the best price for today's early action but I missed an opportunity at the open so took the gain.

Staying in SDS is probably not the worst idea with the S&P 500 struggling at resistance right now... but with the bulls momentum last week it feels like a Corona melt up is a possibility.

Anyway I don't like to stay too exposed for too long with these leveraged ETF trades so I'll take what I can get and be patient for another opportunity I'm comfortable with.

This latest SDS trade was a 1.8% gain.

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