Wednesday, March 3, 2010

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

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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.

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

Regards,

pgd