Video: A New ETF Trading Idea

ProShares UltraShort Euro (EUO) just became an interesting ETF to trade right now.  Investors buy EUO to short Euro in respect to dollar.  As EUO increases in price, it mean EURO is declining.  Adam from MarketClub uses Fibonacci to determine a good entry point for EUO in his video.  61.8% rests at $22.59 and so anywhere around this level is a good entry point without too high of a risk.  Are you considering to buy EUO this week?




However, I took a look at daily one year chart of EUO and draw a slightly different Fibonacci using high at $26.39 and low at $16.20 as seen below.  In my analysis, the 61.8% retracement occurs at $20.09.  If this is true, now is not the time to be buying EUO.  Let’s see if EUO starts turning its direction and starts moving higher after $22.59 retracement or if EUO continues to decline towards $20 before turning its direction.

Fibonacci Retracement Levels:
23.6% @ 23.98516
38.2% @ 22.49742
50.0% @ 21.295
61.8% @ 20.09258

Two ETFs Flying High

US Real Estate ETF (IYR) has been surprisingly performing well for past year despite the negative trends in the real estate market.  It is currently at its new recovery highs as it can been seen from

Two ETFs with High Potential

S&P Homebuilders ETF (XHB)  gained more than 3% last week and surprised many investors because there was a recent news that sales of new homes in December 2009 fell by 7.6% and it ended

ETFs to Consider as Long-Term Investment Prospects in 2010

Investing in ETFs could be a better option for many investors than investing in a single company especially during current volatile stock market.  Many investors turn to ETFs because they provide great opportunity to invest in big part of the industries.  For these

Is FXI China ETF on the Decline?

I would like to take a look at FXI, which is an ETF representing the performance of the China equity market for international investors.  Looking at a 2 year chart, the top resistance level occurs around $47.  In November of last year, FXI formed a top at this level before the sell-off began.  It came all the way down to $38 level and currently at a decision point because the

Popular Currency ETFs…

I enjoy posting articles related to the Exchange Traded Funds (ETFs) on Long & Short Investment.  ETFs are popular with investors in the stock market industry mainly because they provide great investment opportunities in areas where it is difficult to take

Chile ETF Provides a Great Opportunity for US Investors

Why is Chile ETF showing a bright future for the US investors? We know that Chile recently went through one of its worst economic slump and now we have seen signs of life in Chile and its ETF. It is iShares MSCI Chile (ECH), which launched in November 2007, has gone up nearly 83% year-to-date.

SP500, Gold Down Day Again...

SP500 closed today at 1091.84 and will most likely reach 1087 tomorrow before moving higher towards 1105. Generally, the stock market will continue to be volatile unless it cleanly breaks 1087 and 1072 supports. Until then, wait for these break out levels before making any firm decision on the direction of the stock market.

Gold has come down considerably since it reached its high of $1226 level. Both Gold ETFs, GDX and GDXJ, have gone down more than 10% during the same timeframe. GDX closed at $47.75 and GDXJ closed at $25.48. These are good entry points since gold will eventually go up again. If Gold goes down again tomorrow, I will be buying more of them.

SHORTS Win today!

Yesterday, I posted that Gold will go down from $1220 level and it did just that today. If there are any sluggish recovery signs in the unemployment number tomorrow AM, then there will be a significant downturn in the stock market including Gold. However, it will not go down continually. It will present a great opportunity to enter the Gold market as well as some of ETFs.

What is an Inverse ETF?

An inverse Exchange Traded Fund (ETF) is also much like a mutual fund consisting of a group of stocks. However, an inverse ETF consists of a group of stocks that takes opportunity to make a profit when the price of stock market falls. It follows the inverse of the stock market. If you believe the market overall will fall, you can actually add these inverse ETFs into your portfolio. This strategy is very similar to shorting stocks but without using a margin account. We all know that when you want to short a stock, your brokerage account must be converted to a margin account. Otherwise, you cannot short any stocks.

I advise investors not to get into inverse ETFs as a long-term investment because the market cannot go down for a very long time and it goes against the history of the stock market. There will be ups and downs but overall, the market tends to go upward direction. Inverse ETFs are attractive when there is a downturn in the stock market to minimize the losses.

Here are three inverse ETFs:

1. SRS - ProShares UltraShort Real Estate

The Fund seeks daily investment results, before fees and expenses, that correspond to twice (200%) the inverse (opposite) of the daily performance of the Dow Jones U.S. Real Estate Index.

2. FAZ - Direxion Daily Financial Bear 3X Shrs

The Fund seeks daily investment results of 300% of the inverse (or opposite) of the price performance of the Financial Index. The Fund seeks to create short positions by investing at least 80% of its net assets in Financial Instruments that provide leveraged and unleveraged exposure to the Financial Index.

3. ERY - Direxion Daily Energy Bear 3X Shrs

The Fund seeks daily investment results of 300% of the inverse (or opposite) of the price performance of the Energy Index. The Fund seeks to creates short positions by investing at least 80% of its net assets in Financial Instruments that provide leveraged and unleveraged exposure to the Energy Index.

Alert: GOLD’s Potential To Fall From Current Level

Gold is now trading around $1220 level and had gone up to fast in a short period of time. I believe it’s time for Gold to retrace back to lower level, possibly in the range of $1160 or even down to $1080 before it continues its rise. If you are looking to enter Gold market, I highly recommend waiting until it falls to lower level. It would be a good opportunity to enter some of the Gold market ETFs that I posted yesterday.

Top 10 ETFs for profit in December 2009

Now that you know what ETFs are, here are 10 ETFs that could work in your favor by the end of this year. This list is based on last month’s performance because I feel that it will continue into December 2009. I expect Gold to level off as we get closer to Christmas so expect to get out of gold market by then.

Top 10 ETFs for profit in December 2009

	Description	Stock Symbol	% Profit
1	Gold Miners	GDX	17
2	Ultra Basic Materials	UYM	13
3	Comex Gold Trust	IAU	13
4	Spider Gold Trust	GLD	13
5	DB Precious Metals	DBP	12
6	Silver Trust	SLV	10
7	E T F S Silver Trust	SIVR	10
8	PDB Silver	DBS	10
9	Market Vectors Steel	SLX	10
10	Ultra Industrials	UXI	10

Introducing New Gold ETF

Once Gold broke the $1000 resistance level, it has been on nothing but an upward trend. It has quickly broken the next two projections at $1080 and $1160. Gold will continue to go up as long as the dollar is weak. As dollar gains strength, Gold will lose steam and will go the reverse direction. But for now, Gold’s next target is at $1240. Investors should not be asking themselves if today is a good time to get into Gold. Instead, they should be asking themselves how they can buy Gold now.

The two ETFs, SPDR Gold (GLD) and Gold Miners ETF (GDX), have done very well, as Gold price continued to move upward. GDX has done better than GLD in 2009. GDX has gained 46% while GLD has gained 25%. However, there is now a new ETF that could serve you even better than the first two ETFs. It’s called Market Vectors Junior Gold Miners ETF (GDXJ). Unlike the other two ETFs, GDXJ provides exposure to junior gold miners. Since these junior gold miners markets are smaller, the potential for their growth is much higher compared to other Gold ETFs. The portfolio of GDXJ consists of 39 different junior gold miners. GDXJ will experience more volatility than GDX and GLD since many companies in the portfolio are still in early stage without much revenue. For short-term investors, GDXJ has a higher potential compared to GDX. For long-term investors, I do not recommend GDXJ due to higher volatility. Instead, GLD could be more attractive in your diversified portfolio.

I do not own GDXJ as of today. But, I plan to buy shares of GDXJ sometime this week as a short-term investment. I am confident that as Gold prices continue its movement upward, GDXJ will definitely reap the benefit.

What is an ETF?

An Exchange Traded Fund (ETF) is much like a mutual fund consisting of a group of stocks. Unlike the mutual fund, you can trade ETFs in the open stock market. Transactions related to mutual funds can only occur after the stock market closes. Since ETFs can be traded anytime while stock market is opened, there will be broker fees.