Wednesday, March 3, 2010

MZZ above $20.08, 1st target above 5d EMA, TSL @ $0.59

GGT calculates the strength of the major indexes, including the stocks that comprise the S&P MidCap 400 Index.  With Tuesday's action the GGT strength of the S&P400 MidCap Index hit an all-time high, which indicates incredible overbought conditions of the underlying stocks.  While there is always room to continue upward, placing a hedge position in MYY (-1x contra ETF) and MZZ (-2x contra ETF) is an action that I am taking this morning.

This is NOT a long-term play.  We are in a confirmed up leg and this is clearly swimming against the currents.

I intend to grab gains quickly, e.g., if the ETF moves quickly above the 5d MA, I will place a SL at the 5d MA level.  The ATR on this is $0.59, so if we move outside of this level to the upside, history proves that it will reverse and erode the gains.


Remember, you are responsible for your own trading decisions, not me.  Do your own diligence.