7 replies to this topic

[Mr Dev]

I came over to post this and saw acrowder's post ,... this should go hand n glove

Edited by Mr Dev, 16 May 2007 - 06:17 PM.

[Darris]

In today's environment, ETF trading is a funny animal. Heavy ETF volume usually leads to bottoms in the traditional SPY/Q4/IWM series. I happen to notice the RSP volume increased 5 fold the last 2 days, and 8 fold today, over recent time frames. How higher volume pans out over the coming years in the ultra short series is going to be interesting. The one minute DXD volume on this higher than normal volume day showed spikes due to selling the series, FWIW IMO. Good trading.

[Russ]

How far off can the bottom of this etf or top of dow be with this kind of capitulation?

In today's environment, ETF trading is a funny animal. Heavy ETF volume usually leads to bottoms in the traditional SPY/Q4/IWM series. I happen to notice the RSP volume increased 5 fold the last 2 days, and 8 fold today, over recent time frames. How higher volume pans out over the coming years in the ultra short series is going to be interesting. The one minute DXD volume on this higher than normal volume day showed spikes due to selling the series, FWIW IMO. Good trading.

[Darris]

Russ, Jason Goephert at sentimentrader.com and Tom McClellan do some good work with a term called the Liquidity Premium. My response was more associated with their analysis of this aspect rather than mine. However, if you are able to come across the charts they have publicly published, you may start to notice, that once we come off a major bull market bottom like we did in Apr 2005, Oct 2005, May 2006, and March 2007, the so called Liquidity Premium does not particularly work in pin pointing a Top. In other words, it is a great bottom spotter, but it falls into the same category as most other indicators when trying to pick a TOP, low Win ratio. Just casually looking at the volume on the spy/q4/iwm on any chart will clearly show what I mean. Volume on these new series of Ultra short ETFs is very confusing to me since only the Ultra short ETFs are being traded with moderate volume, where as the ultra long ETFs, have minuscule volume. You would think, that if Rydex action is being shifted to these new ETFs, both the long and short Ultra ETFs would be traded somewhat equally, but they are not at the present time. It may sound funny, but I do not believe you can short an ultra long or short ETF, but you can short spy/q4/iwm without an uptick. The program trading that uses spy/q4/iwm to manage their portfolios in times of panic do not appear to have incorporated the new Ultra ETFs into thier code yet, but all in my very humble opinion. In summary, I do not think the volume in the short ultra ETFs means anything at the present time, but over time, patterns may start to repeat themselves. Have a good evening.

[Mr Dev]

I think it looks a bit like a capitulation volume spike ! Sorry no other fancy smancy bs to spew.

Edited by Mr Dev, 17 May 2007 - 12:43 AM.

[jmicou]

I think it looks a bit like a capitulation volume spike ! Sorry no other fancy smancy bs to spew.

Mr Dev,

What about the liquidity of the inverse ETF? Is it a good measure of such capitulation? Here is the DIA, yet with some divergence. At some point, a expected significant pullback will occur. Are you suggesting the time is now?

regards,

jmicou

[Mr Dev]

Hey buddy you know I really only try and see as far as my next trade's time frame .....always appreciate your

thoughts btw.... see my thought below I'm not really here to call anything but my next winning or losing trade.

Is the etf vol a good measure,.. well I don't know it just looks BIG,...is there anything else that is a good measure...fact is in this type of

market nothing is a good measure,..as far as a turn goes I think it is actually more likely to just Roll Over

in a pattern that first looks like an ...get this...inverted V =^ with a inverted U =attached to it.

thoughts posted below

[thespookyone]

I think it looks a bit like a capitulation volume spike ! Sorry no other fancy smancy bs to spew.