HXD

HXD and HXU

Hamilton

You could do all your trading with just these two ETFs. The Horizons X(TSX) D for down or U for up. They are leveraged so one should not go overboard but otherwise they do most of what is needed. Here are the charts;

hxd20112 HXu 2011

The HXU, the bull one on the left could have been bought for $8 at the lows in March, today it is at $24 and appears to have completed an A-B-C of sorts. The HXD, the bear version is on the left and seems to have completed an A-B-C as well, ending with a pretty nice wedge that seems to go on forever. Today it hit a low of $8.03 and even though one cannot be absolutely certain, it is clearly a buy at these levels and should trade towards the $20 level and perhaps a lot higher!

The wedge , in detail , is below. It is the 5th of the 5th which is the wedge so do not confuse the two charts.

HXD20113

HXU and HXD, 2x up or down the TSX

Hamilton

These leveraged  Horizons Betapro  vehicles are fairly simple, you do not lose on futures roll-overs as no futures are used and consequently you do not suffer the debilitating effects of a commodity in contango (such as in HNU).  They are straight vanilla no nonsense tools that go 2x as fast as the underlying TSX. There are many of these, Google ‘direxion’ and at least 2 dozen come up that are leveraged up to 3x.

I like to look at both the up and the down as they should mirror each other and, if done correctly one can theoretically make a living just alternating between the two. Here they are;

HXU Nov 2010 HXD nov 2010

Before being let go at RBC (I am being polite) I had every single client of mine with a standing order to buy HXU at $8. They would have doubled their money. At the 62% retracement the HXD should have been bought. It is difficult to get it exactly right but the beauty is that even if the market runs against you, the sensitivity is quite low, whereas if it goes your way it really goes. It could well be that the market has another leg up , but if you are convinced that there will be a bigger one down, either now or later, this is an ideal investment if used in moderation. The SDS does the same for the US S&P (in US$) or as HSD (in Can $). Remember that you are not trying to catch the 30% movement, instead you are aiming for at least 100%

TSE May 21 2010, so where are we?

Hamilton

tse may 21 2010

It is always risky to be too precise with regard to making predictions using EW, nevertheless I will make a wild guess as to where we are.

I always expect the TSE to do a 1000 points, all though Canada is supposedly metric there are still too many vestiges of the old colonial days but, as far as the TSE goes the 1000 point mark seems to fascinate the market over and over again. So we did that at the open. However I would not expect much more than a feeble bounce which may or may not already have run its course. By my estimation we are probable in wave 4 of 3 of w 3 of Wave 3 of wave 1 of3 of C.

Given that Wave 1 of 1 of C was 600 points or so Wave 3 may well run 2.6X that which would be about 1600 points, then 4 and 5 still have to occur to finish wave 1 of C. C itself always has to be 5 waves so that can easily get you to lows that are (substantially) lower than the lows set at March 2008. 

An interesting article appeared in the  John Maulding letter written by Niel Jensen of Absolute returns.  In it he explains why the commodity game is a con job. It is copywrited so I cannot share it here but you can find it on the internet at info@arpllp.com  .  Combine that with a little stockpiling in China and you end with a pretty toxic brew.

Stay with the HXD.

HXD

Hamilton

hxd may 9 2010 2 HXD may 9 2010

Not much downside and a lot of upside. This one is not likely to drop much lower but could easily get back to the old highs of $41 or beyond. Notice in the detail chart that the pull-back due to the Euro $1bln package was a very clear correction, either wave 4 of an incomplete 5 up or wave 2 of a completed impulse wave. Similar attractive bear instruments exist under HSD and SDS just to mention one or two.