Sell in MAY and run away FAST..

[icm63]

I guess this time the saying may have heaps of merit.

The volume of sell days is larger than the volume of UP days.

This sell off may have legs (even if there is another shorts unwinding bull run up).
SellingMay001.jpg

[globaleconomicollaps]

Re: Sell in MAY and run away FAST..

do you think that gold will also tank?
-G

[icm63]

Re: Sell in MAY and run away FAST..

If you call $200 a tank then yes, BUT GOLD will find many BULL friends around $1000.

Due to contagion selling.

But if the GOLD BULLs from $USD tagged countries like middle east and Hong Kong realise that $USD is the place to be, then serious profit taking is on the cards. And if that happens this will show a clear double top on gold at 1200, and force more technical selling. (unless we get a tripple top). BUT $1000 will be a line in the sand for the BULLs...

Spain, Portugal, Irleand, New Russian countries (Georgia, etc): Are all BUST and the banks in the europe are on the line for these write offs...EURO is going down hard..$USD up ...until the story changes...Remember markets overshoot !

[radon]

Re: Sell in MAY and run away FAST..

Spain, Portugal, Irleand, New Russian countries (Georgia, etc): Are all BUST and the banks in the europe are on the line for these write offs

...EURO is going down hard..$USD up ...until the story changes

In the longer term how do you reconcile these two? Wouldn't a sustained deflationary spiral in the Euro put pressure on the exchange rate. It is much harder to reflate the Euro than the Dollar. Is Germany going to leave?

[globaleconomicollaps]

Re: Sell in MAY and run away FAST..

This has long been an Itulip position. It seems puzzling. EJ believes that the Euro will stay together, but it does seem to be heading south.

[icm63]

Re: Sell in MAY and run away FAST..

Volatility was picked way in advance, and easy 15% trade was forecast here..

SellingMay002.jpg

[stetts]

Re: Sell in MAY and run away FAST..

Dear ICM63,
I pay attention to all your posts, and note the "...easy 15% trade...." comment. One of your previous comments around mid-April was for a solid rise in TBT--well over 50 if I recall. As has been stated many times, this isn't a forum for free investing advice, but I was just wondering if you sold out of your position. I haven't and was wondering if you've thoughts on its recovery potential. Just askin', and it's a friendly query.
Take care. Stetts

[charliebrown]

Re: Sell in MAY and run away FAST..

Yup, I remember that call too. I own some TBT, Average cost $48. I have a May 49 call written on it. In the long run we know interest rates are going up. The question is when? If it were not for the Euro crisis, I'm sure t-rates would be around 4%. I believe that TBT has to pay double interest to the counter party, ergo it will regresss 8% per year at the current rate. This is a strong head wind. If I see some trend up in TBT, I may add to my position, but only slightly.

On zero hedge one poster stated that who is going to buy 1T of new treasuries? China is having trouble, Eurozone having trouble. Japan is in trouble too. Only the Fed with its infinite checkbook can buy, and that ends badly.

[charliebrown]

Re: Sell in MAY and run away FAST..

Oh yeah,

Thanks for the input on the dollar bear ending. I lightened up on my anti-dollar plays. Sold WIP, BWZ, lightened up on EFA, VEU. I still own a lot of C$. What's your thought on that. Seems like economy is better than most G20. However they do have a housing bubble. If China blows, and commodities tank how does the C$ hold up vs. US$

[globaleconomicollaps]

Re: Sell in MAY and run away FAST..

Yup, I remember that call too. I own some TBT, Average cost $48. I have a May 49 call written on it. In the long run we know interest rates are going up. The question is when? If it were not for the Euro crisis, I'm sure t-rates would be around 4%. I believe that TBT has to pay double interest to the counter party, ergo it will regresss 8% per year at the current rate. This is a strong head wind. If I see some trend up in TBT, I may add to my position, but only slightly.

On zero hedge one poster stated that who is going to buy 1T of new treasuries? China is having trouble, Eurozone having trouble. Japan is in trouble too. Only the Fed with its infinite checkbook can buy, and that ends badly.

I am probably missing something here

This is a chart of the 30 year bond. It is currently somewhere around 4.5 percent. In order to double it would have to hit about 9 percent. The last time it did that was about December if 1987 (Roughly 23 years ago). the stock you are holding is a double inverse ETF. That means that it should double after about 11.5 years ( not including decay ). See my post here about double or inverse funds here:
http://www.itulip.com/forums/showthr...486#post114486
and here :
http://www.itulip.com/forums/showthr...488#post114488
Since your fund is both double and inverse, it will experience twice the decay of holding the underlying bond. This is an example of a fund that experiences decay.
3x-decay.bmp
Even if bond rates go up at a rate double the historic decline rate, you are still looking at 5.75 years to double your money ( with no decay ). Where you planning on holding this stock for 6 years? If so, are you sure it will not go to zero in the mean time? Will pro-shares still be around ( and willing to pay you ) in 6 years?

[charliebrown]

Re: Sell in MAY and run away FAST..

oops, as you see when I posted this It was very early in the morning. I was thinking 4% on the 10yr. You are correct when you said 30yr is 4.5, so double is a 9% head wind + operating costs. Meaning I'm losing 10% a year, if interest rates stay the same.

I'm not looking to double my money. I'm looking to make a few % and move on. I really don't like these inverse ETFs. This is the last one I own. They worked really good, in sept of 08.

[icm63]

Re: Sell in MAY and run away FAST..

HI..

All Yes I own TBT, and its a looser. But I had call options. So loss limited.I also own SKF, at a ratio of 2x1 to TBT, So I am a winner over all (knock on wood).

NON of my posts are investment advice, they may or may not represent what I am doing.

Anyways..
The last two rallies in stocks was a pure PUMP to for large funds to sell at higher prices. Todays sell off is purely what every one knows is about bullsh*t on the bank balance sheet and of course GS using the power on their computer programs (today they are selling). This day is for the remind the BULLS that bears are hear to stay...

Also go back and see 1932 charts very similar rallies and sell offs.

A chart...
PumpDump001.jpg

[stetts]

Re: Sell in MAY and run away FAST..

Dear ICM63, CharlieBrown and others,
Thank you for the excellent clarification.
Take care. Stetts

[icm63]

Re: Sell in MAY and run away FAST..

No worries, was it you who types a 'B' for billion instead of a 'M' for million when you sold SP500 futures.

I dont think the sell off is over yet...no matter what CNBC says..

[charliebrown]

Re: Sell in MAY and run away FAST..

I know, and I am not blaming or angry. I am not the snibbling public who blames everyone for their own mistakes. I went into the trade knowing what the risks were. I thought the bond market could push a little lower and I would be called out on 5/22. I was fully aware that if the market tanked people would be running into treasuries, and TBT would tank. I just did not expect this big of a run into long treasuries did you?? I was assuming I might take a few lumps, but would be able to roll my calls again and push my cost down yet again.

This is a whole interesting thread by itself. If you own euro denominated bonds, yes I can see a panic move into us T's, but 30 years, ... why?? If I was in the situation I would move but keep my duration down. Probably buying 2 -5 year duration, or Tips. So why the 30? Are large holders of 30yr euro bonds just moving to 30yr T's? Is someone making a big bet that the U.S. is going to go Long Term Zirp just like Japan, and a 4.5% return is a great deal?

If I'm china right now I might be unloading some of my T's. although what do you buy?? Gold?

Something doesn't smell right.