Friday, April 17, 2009

Hedge Idea of the Week, April 20-24 (sqnm, xlv, fslr, qid, dzz)

SQNM: Long
XLV: Long

FSLR: Short
QID: Long (this is an ultrashort etf of the qqq's, see chart on last thread)
DZZ: Long (this is the 2x short gold etn)

My opinion on the NASDAQ intermediate term remains lower. (has been since Monday's close)

The UUP made a bullish wedge breakout today, on price and rsi. (a rising dollar causes downward pressure on all commodities)

So on the short side, look at possibilities that trade along w/ commodities. (solars go w/ oil....miners go w/'s go w/ the actual grain values, etc etc).

I personally think the solar's as a group have the most downside next week, b/c of the UUP break out, and also as the market has been pushing higher here but the solars are now lagging and making a lower high, so they look like the specific sector that money is coming out of most here.
Health care picks on the bullish side, i like the best here. Why? - The UUP breakout, makes me hesitant to look at anything that has any correlation at all to deflation. (which is alot of stocks) and the nasdaq wedge makes me not to want to call a tech, I mean goog "blew out er" and the nasdaq was basically like "ok...whatever", so they seem pretty overbought to me. Financials are a gamble, and have too much intervention to feel good going either way. Transports went up too much this week to feel good chasing here. (ie drys/lcc from last week).
I do like all these plays here, as that's how a hedge trade is intended.
Or at least that's I typically trade them. (25% sqnm, 25% xlv....17% FSLR, 17% QID, 17% DZZ)
(charts are intraday Friday data here)


  1. Slightly off topic. But:

    Gold's downward slide to sub-860 levels makes me hesitant to short Treasuries. Deflation is still the name of the game here.

    I would prefer to short Treasuries when gold is in the mid-700s as a better entry point.

  2. I never play treasuries, but do you look at $USD...vs...$GLD....vs....$TBT chart comparisions to look for excessive wide divergances for entries?

    or plus what else ?