Mar
24
2009

  Sold My Cubes

I bought some QQQQ at the end of January, after the ETF had completed a buy countdown. But before it completed a sell setup, it recycled and completed another buy setup. Basically, after I bought it it went down then up instead of just going up. It reached the end of its sell setup yesterday, and I decided to sell now instead of waiting for a complete sell countdown, since the market is more choppy than directional, and I'll just bank a small profit while I can. It was short of my target price, but since my trading pattern recycled I think it would be imprudent to hope for too much better. A small gain is better than no gain, and certainly better than a loss.

I'm kicking myself now for not selling my DXD when it peaked. The leveraged ETFs are difficult to trade over time, I should have taken the profits instead of riding it until the next drop. But now I've just got to wait it out. Of course, my stated strategy was to wait until I got a "buy" signal for the Dow (DIA) and thus sell the inverses DXD and DOG at that time. But the Dow got into this little rally just a few days before the "buy" countdown was complete, so now I've got to start the count all over again. Grrr.

If DIA closes above $82.73, I could be in a long wait (meaning months) for another buy signal. But I just have the feeling the momentum will peter out before it gets there (it is trading at $77.55 now). It's in day 10 of a sell setup (nine is minimum needed to complete a setup), so this little rally could end at any time now, the initial momentum has been achieved. I would be surprised if it lasted until a full sell countdown was finished (another 13 trading days at a minimum, but since the close has to be higher than the 2nd previous day's high, the days might not be contiguous and thus it could take months to finish a countdown). If this is the rally I was waiting for, I don't mind missing it, since I don't think it's got staying power, and is best left to the day-traders.