Direxion Daily Technology Bear (TECS)

[Bill de MT]

Everything is in a deep pullback, no kidding. But, it's still in a long term upward trend from June. ...which I'm sure is now reversing only because I got tired of getting beat up in bear ETFs and went long. :)

TECS had a good day. $RITEC ended the day with a 1.62% drop to right above support at 1388. If it breaks that support, it should drop to 1370. AAPL looks like it might drop to $652. Given today's ugly red candles I'm not so sure that even those support levels will hold for $RITEC and AAPL. $RITEC could hit 1330 again. So, TECS probably still has some legs in it. It had a nice green candle today on decent-ish volume. And it formed some hammers signaling a trend reversal last week. If it gets past 8.35 tomorrow, then 8.90 will be its next resistance, then 10. Right now, it's one of the better looking charts I follow.

The keys will be to watch $RITEC and AAPL as well as to not linger holding TECS for very long. With contango, any upward trend is dwarfed by a natural longer term downward trend. Take profits. And I wouldn't count on AAPL getting much under 652. It likes to stay above the SMA50 which is now 645.

I'm long in a small cap tech stock right now, AMCC. Getting beat up, but I don't see the upward trend broken yet. Might be averaging down, though.

[SOROS]

Maybe TECS bottomed? Would love to see the NAS fall like this about 30 days in a row!

[Bill de MT]

No idea what TECS' pps would be sitting at if QQQ hit $28. That answer requires a pretty serious crystal ball considering QQQ direcly holds stocks and TECS trades options, etc. and doesn't hold stocks. So, it depends on the amount of time it took QQQ to hit that level and how much bouncing & jostling the charts had in getting there and the economic conditions that caused it.

Generally, IMO, TECS will never recover an amount equivelent to QQQ or any index decrease. It's better than some other Direxion beauties like TVIX and VXX, but it still drops proportionately faster than $RITEC rises and rises proportionately slower when $RITEC drops. $RITEC closed Friday within a hair of its YTD high back in April. TECS was then $8.35. TECS closed $7.66 yesterday. All things being perfect, TECS should be $8.50-ish. Instead there's a decay courtesy of contango of about 8% in less than 6 months.

Don't get me wrong- when/if the market collapses, I'd rather be in TECS than QQQ, but until that happens TECS is headed to the dirt (and may actuall be dead). If I bought now, I'd be afraid that even with a total market collapse, it'd be really long term before I saw my principle back if even at all.

[SOROS]

So if the QQQ were to head back to $28 or so, what do you think the price of TECS would be?

[Bill de MT]

I completely disagree with you on TECS. It's headed to $0, IMO.

Looked at the 5 year chart...or what there is of it. It started trading at the very end of 2008 so it doesn't even have a 4 year chart. And that chart is just one big downward trend. From $350 to it's new all time low.

I agree with you that that the world's economies are in serious trouble over the long term and the markets will see some huge downward moves. But, that probably won't happen for quite awhile which will give TECS (and other ETFs of its ilk) a lot more time to continue tanking.

And when the time does come for the markets to crater, TECS isn't the answer, IMO. It's built-in pps decay causes it to rise only a fraction of the decrease of $RITEC. In other words, when $RITEC goes up, TECS drops like a rock. When $RITEC goes down, TECS goes up comparatively little. It's not as bad as some of Direxion's other bear ETFs, but it's bad enough.

GLTY

[SOROS]

Might be a great time to load up on TECS, which is leveraged 3X on the Nasdaq to the downside. It's near a 5 year low. Look at a 5 year chart. You'll see that at around $7.70 a share, if it goes only back to a 52-week high, you make 4-5 times your money. If the market turns, as many suspect this is a total, artificially-created scam of a market by Uncle Ben and OBOY, that $7.70, if Nasdaq goes back to 2008 levels, would be like $300-$400 a share. How far this market has gone up sine the 2007 low is ridiculous, when you look at where the world's economies are not compared to then. Almost everything is WORSE, yet the stock market has been on a tear up. If it corrects where it should, those holding TECS at $7.70 will be rich.

Look at the potential -- staggering:

http://finance.yahoo.com/echarts?s=TECS+Interactive#symbol=TECS;range=5y

[Bill de MT]

Actually, it isn't TECS I sold this morning. It was VXX and TVIX. Doesn't matter- I won't touch TECS again ever either as it's tied to a tech index. AAPL may very well be consolidating for the next leg up which will wipe out TECS.

[Bill de MT]

Funny you should mention this.... No, I had enough of a beating in this and the other one. Finally sold at the open this morning for two of the worst losses I've ever had outside of pink pump and dump scams. Should have sold long ago.

I agree with you that we won't see a big pull back until after the election. This market goes up on good news (economy is improving) and goes up even more on bad news (economy isn't improving thus QE3). Even with overbought signals and low volume, I think we're going to see some serious upside. Normally, I wouldn't sweat taking a beating in a stock because I know when that the market always reverses and I just need to average down and wait it out. However, these ETFs suffer from serious decay from contango. Even with a gigantic pullback, these will never bounce to where I need them to go. So, I'm out- wiped out a year of patient trading gains. Oh well.

SWC, on the other hand, broke through it's 11.30 resistance this morning and I'm back in there.

Good luck. I'll never touch an equity tied to an index again unless it shows a direct and proportionate correlation to the index. This just trends down no matter what the VIX does.

[bundyelvis]

Are you still in these? I just jumped back in. I think it was a dumb move on my part again. We would have to hold until after the election before a big pull back in the Dow. imo.

[bundyelvis]

Does anyone know how this stock works? My understanding is if the dow goes down this stock goes up. I am getting out of this one soon. Does not make any sence. Neither does most stocks.

[bundyelvis]

I am betting the Dow will stay in this tradings range until the elections. 12,650-13,150.

[bundyelvis]

Time to get in this one before Monday. IMO

[bundyelvis]

I didn't grab the bottom but close enough. I am betting Germany bails on the bail out next week and the market drops 400 points.

[bundyelvis]

In again at 10.12.

[bundyelvis]

Hope you got out of this stock and the vxx. The Dow will more in likely hit 13,000 before they take it down again with problems in Europe again. I am going to buy this stock or the vxx if we drop down to 10.06 or 12.50 again. This time I will hold longer for a bigger profit.

[bundyelvis]

The PR this Morning report over 253,000 ounces mined the first 6 months of this year. Not much less than 2011 when the stock price went to 25.00. That is great news.

[Bill de MT]

Haven't really paid attention to SWC's fundementals lately. Looking at them tonight. Consensus is .07 a share- crazy low. Based on the low palladium prices. Had no idea Pd has gotten so low. So yeah- I think SWC will make that number just because it's so crappy.

It's right above its 52 week low. If it gets under 7.31, I think there's serious problems for it. It's bounced off this level 4 times since 2005 to some pretty good gains and gone under this level once to under 2 bucks coming back in 2 years to over 26. Odds are that it'll bounce from here or slightly lower, IMO.

[bundyelvis]

What do you think about the SWC earnings coming up on the 30th? Do you think they will make there numbers?

[Bill de MT]

You got somethings right. You bought TECS at 10.06 (which I disagreed with) and sold for a profit. I'd have advised selling on Friday as well. You got in SWC at what looked like a good pps. I'm still in it because I know it's coming back.

2 months ago, I bought TECS at 10.20 or so only to see it sink to under 8. Bounced back to almost 11, then sold it on a stop loss at 10.40. Within an hour, it started a climb of 3 bucks. Tried to flip SWC earlier this year and lost out as it ran from 10 to 15.

Gutting out TVIX and VXX these last several weeks has been brutal. Stuck with them because I figured on a bounce at some point- just hoped they didn't sink so low that the bounce would still be less than my entries. Looks like it might pay off for me in the next couple of days. If it does, then I'm green. Account has been red since 2010 with some horrible trades. And some ugly red numbers (60% or better down). Right on the edge of breaking even.

Of course, before December 2010 I tried my hand at trading twice before. Funded an account and wiped out. Ditto a couple of years later. Both times on stupid penny stock scams. Man, talk about looking and feeling foolish. The good news is that the SEC yesterday finally announced it is skewering the main culprit on the last penny scam that raped me.

Dunno- things have finally started to gel for me in my trading the last few months and can't put my finger on exactly why. I try to trade with the trend, be patient, and trade only fully reporting big boards.

[bundyelvis]

I did everything wrong. Going to lay low for a while.

[Bill de MT]

Yeah, me too. I'll ride this one out, though. Long term holding so I'll be in it for at least 6 months and probably longer.

Don't look at TECS. ...especially the after market trades. AAPL completely missed expectations and dropped like a stone after hours on their earnings. The bears pretty much have control of the market right now. Just wish I was in at a lower average in VXX. Kicking ass in TVIX, though.

[bundyelvis]

Getting killed on SWC.

[Bill de MT]

C'est la vie.

Made a profit, though, that's good.

[bundyelvis]

Yes I did but sold on Friday. Go figure.

[Bill de MT]

Did you get in at 10.06? Really nice move, if you did. I'm in great shape with TVIX- more than covers my loss in VXX, if I sold VXX right now.

[Bill de MT]

GLTY. Even if I'm right and there's more downside to TECS from 10.06, it'll get back over 11 soon enough for plenty of profit. Nice move on SWC, BTW.

[Bill de MT]

RITEC is at 1316 and will hit resistance at 1321. If it gets over 1321 with some strength, it'll hit 1340. Looks like it's just moving sideways with support at about 1250. If it bounces off 1320 and starts moving down, it could be forming a head and shoulders pattern which would be confirmed with it moving under 1250. If that happens, RITEC would have a serious downside driving TECS way up. It's all just right on the line right now so I'd wait to see which way it's going to trend especially given that TECS is in a downtrend.

Was able to get a good look at RITEC, but stockcharts froze up again. Don't know the numbers on AAPL.

TECS has some life in it. I've found- too late- that VXX and TVIX have some real decay to them. When the VIX goes down, both those ETNs will probably go down at a greater percentage. But, when the VIX moves up, then TVIX and VXX don't move up in the same percentage. They have a real natural downtrend. Just want my money back and I'll never touch them again. LOL! I think there's some better VIX ETFs out there.

[bundyelvis]

Well I think 10.06 is a good entry. Europe will start crying pretty soon and take the dow down I am betting on.

[Bill de MT]

I don't think I'd buy it here. It just broke through some support that was hammered out over months and the trend is pretty clearly down. Plus, RITEC gapped up today breaking out of the same trend only up. AAPL is on the move as well. More downside, IMO, for TECS. How much downside? More resistance coming soon for AAPL and RITEC (charts are really slow this morning so I don't have an exact number handy), but 620-ish for AAPL. And momentum is slowing for RITEC and AAPL. TECS is also starting to show oversold. I don't think this rally is sustainable for the bulls. The key, though, is to wait for the signals on the TECS candles. A nice hammer candlestick that gets over the previous day's high- in this case 10.98. Of course, with that strategy, you wouldn't be buying at the bottom. The advantage, however, is that you're likely buying into an upward trend and know where the bottom is. This is where I srewed up with TVIX and VXX. Didn't wait to see the trend reversal. TVIX looks like it might reverse today. VXX looks like hell.

[bundyelvis]

I am thinking of buying this stock at 10.10. What do you think??? I just bought 250 shares 10.07.

[Bill de MT]

That's a good buy! I'm in the red with SWC, too. But, that account is longer term. Probably won't sell it until it's back over 10....whenever that happens.

[bundyelvis]

I agree. I only own SWC at 8.09.

[Bill de MT]

Nope. Can't buy. Out of cash. I'm still in VXX and getting killed for the time being. And bought TVIX last week. Getting killed in that as well. Even though I'm underwater in both of them, they're both showing bullish divergences so I'm hanging on. Likely to get my money back in VXX soon and still likely to make some good green in TVIX. I can't remember why I thought both of these had buy signals when I bought them. But, I wouldn't buy them today if I had cash. I'd wait for a signal where the day's high exceeded the previous day's high. This is probably my last time screwing with VIX futures ETNs.

TECS- Today's candle dropped to just right under a trend line that dates back to the beginning of April. Sell volume is pretty good today, too. And no bullish divergence signals. I'd stay away from TECS today and wait for a signal on the candles. Hard to say which direction it'll go. RITEC is right under some resistance and this rally seems like it doesn't have much momentum. AAPL is sputtering over the last week. So, I think RITEC is likely to go down causing TECS to go up. Still- I'd wait for signals on the TECS chart to buy. If you bought TECS today, there's a better than 50/50 chance you'll do well. But, with every crappy trade I make, like TVIX and VXX, I'm getting more conservative. I need better than 50/50.

[bundyelvis]

Are you buying today??

[bundyelvis]

Almost time to buy again. I will buy when and if it goes down to 10.20. Were down to 10.50 right now.

[bundyelvis]

Thats how to play them.

[Bill de MT]

Out at 11.49 a few minutes ago. Markets and AAPL due for a rally tomorrow and for a few days. Just going to have to ride out VXX.

[bundyelvis]

This one did what it was suppose to do. Go up. I cannot figure out what happen to the VXX. These 2 stocks go up when the dow goes down.

[bundyelvis]

I am going to buy on Thursday and average down. 14.40 on the vxx.

[Bill de MT]

I'm down a chunk, too. Looked like good buying opportunities to me last week. Oh well. Me too on the patience. Should have waited for these to bottom out then start reversing instead of trying to predict the bottom and catch it. All very ironic that crappy economic data is driving this rally because of hopes of QE3 (plus the fluffy good news out of Europe last week). Pray for good economic news on Thursday and Friday so this rally fades.

[bundyelvis]

I need more Patience. I new the Market was going over 13,000 again. I see the stock so cheap and a new 52 week low I could not stop myself. I market will drop down after the elections. I might have to hold until then. I am down big time.

[Bill de MT]

Ugly day for sure. Set a new 52 week low by a large margin.

The VXX follows the S&P to a large extent. Technically, it follows the futures. So while the S&P was basically flat today, futures investors are betting that the S&P will rise or be less volatile. And the they're betting this way for the same reason the market was flat today despite last Friday's run- crappy economic data. The data dropped the market today, but gives hope that the Fed will step in with QE3 at some point.

Caught me way off guard. Today isn't something I considered. Glad I have only a small position in it. I'm confident I'll get out of this trade with some green- On the 60min chart, it's seriously oversold, forming a really nice pincher, and has a bullish divergence on the ULT. The daily chart shows its got some serious upside due to it- a nice bullish divergence on the ULT. But the candle formation doesn't indicate a reversal and there's room for downside in the ULT and RSI. So, I might be riding out some more ugly red and stuck in this for a month or two. I'll probably avoid the VXX and other ETFs like this one in the future....pun intended.

Just so we can say we're on topic- TECS is getting close to some serious support. I'd like to see it bounce up from here hard. It has a nice ascending triangle pattern forming on the daily. If it bounces, it's a sign that this could potentially run 6 bucks or better. But, it's right on the cliff of busting down through the pattern which could be a disaster for it.

[bundyelvis]

The vxx doesn't make any sence to me. Market goes down the Vxx is suppose to go down. When the dow crashes and it will the Vxx and this stock has to soar.

[Bill de MT]

I really have to work on my entries. LOL! Just going to hold tight for the bounce. Days like this are actually good for me because I basically shut off my computer only checking the market a couple of times durnig the day. I get lots of other stuff done.

[Bill de MT]

Dang, could have gotten into everything today a little cheaper, but that's the breaks. If there's more upward movement next week, I'm just holding tight. $RITEC and the S&P are on a run that they can't sustain. Right under some resistance so I think you're right- sure bet the markets will start talking themselves down. I'm surprised the bulls want to hold over the weekend. My uderstanding of the EU Summit is that- while it has produced more than previous meetings- it's still a lot of fluff missing details.

The best comment I heard today is that the EU is now more unified in kicking the can down the road. Still lots of problems.

If, by some miracle, today signals a trend reversal and we're back to a bull market, I'm in a good position to bounce out with a little green.

[bundyelvis]

That is a sure bet. They will start talking the market down starting Monday. It is up and down. The vxx is the stock to be in. This one is ok to. I think we can make mo money in the vxx.

[Bill de MT]

Was thinking about buying some more TECS just now, but figured I'd flip over to VXX to see what that's doing. The daily chart has a really nice bullish divergence and the 60min chart is really oversold. The S&P is right on resistance where it failed sliding 60 points and the ULT is clearly showing bearishness. $15 is more than I like to pay per share, but I can't pass up these charts. In for a small position at 15.39.

The only reason I don't like to pay more than about 10 per share of a ticker is because higher priced stocks seem less volatile. But, VXX is all about volatility.

Seems like it's been in a steady downtrend since June 21 after getting clobbered in early June. I try to stay with uptrends, but even keeping with this downtrend, the upside is around 17.

Today is crazy. More than I could have hoped for. Pop out of SWC and right into some real bear bargains.

[Bill de MT]

In for a small position at 10.81. Just guessing what the charts look like, but IMO this is a hell of an opportunity to short $RITEC or most other bulls.

[Bill de MT]

Can't see what's going on really since no charts for TECS are up, but $RITEC looks like it's running out of momentum and will hit resistance soon. Think I'll put in an order around 10.77. Can't go wrong with that, IMO.

[Bill de MT]

This rally is short lived, IMO. It's a good opportunity to short. I can't tell what's going on with TECS because stockcharts doesn't have the ticker yet. This morning at 10.90 was probably a good entry, but I didn't take it.