- Hello everyone, and welcome
to Wednesday Morning. .
- It's Stephen Whiteside here .
- from TheUptrend.com,
and in this presentation we're going to do .
- a tutorial on trading
at the Horizons BetaPro ETFs. .
- Before we get started, today is a Fed day,
of course, and we're expecting the Fed .
- announcement at 02:00 P.m., and then
the excitement meant to start after that. .
- As you can see, the Dow Diamonds have
traded up and got stuck at resistance. .
- They hit resistance on Friday
and Monday and Tuesday. .
- We're still stuck there as volatility has
contracted going into the Fed meeting. .
- Of course, after the Fed meeting comes
out, we're expecting volatility to expand .
- dramatically, of course, taking
a position just ahead of the Fed meeting. .
- It's a three part bet. .
- You're betting on what they say, what they
do, and of course, how the market reacts. .
- And really, at the end of the day, .
- the only thing we care about
is how the market reacts. .
- Now, in the pre market this morning,
things are very quiet out there. .
- Stock index futures are trading
right around fair value. .
- So it doesn't look like a lot of investors .
- are sticking their neck out this
morning ahead of the Fed meeting. .
- Now let's get back to our 2X ETFs. .
- They're designed to give
twice the daily return. .
- So remember that's daily, not weekly, not
monthly, not yearly, the daily return. .
- And so here's an example from yesterday. .
- The TSX energy index was up 1.29%. If you
double that, that is 2.58%. And then if we .
- go to the corresponding Horizons BetaPro
ETF, it actually ended up to up 2.54%. .
- So just off by a little. .
- And that's typically what happens. .
- The market investors can bid up and bid
down the Horizons BetaPro ETFs. .
- So they don't necessarily have to end up .
- being exactly two times the move
of the underlying index. .
- And again, remember,
these are daily returns. .
- They're not weekly, not monthly. .
- So these are not investment products. .
- These are trading products. .
- So don't ever think of these
as investing products. .
- They are just trading products. .
- Over the long term, they will not do
very well because of the volatility. .
- But we are here to capture the volatility. .
- Now, there's five ETFs that I
have as a bundle or a portfolio. .
- There are other ETFs. .
- You can do criticism, you can do gold, you
can do silver, you can do natural gas. .
- There's other ones out there. .
- These are the five core ones that I trade. .
- Now, each one of them has
its own characteristics. .
- Typically the energy related ETFs
are going to be the most volatile. .
- Then you've got out of the three major .
- index ETFs, the Nasdaq with the technology
stocks, the biotech stocks is typically .
- more volatile than the S&P
500 and the TSX 60. .
- The TSX 60 is typically
the least volatile. .
- It's only got 60 stocks and typically has
the least volatility out of all of these. .
- So they all have their own characteristics
and over time, you'll get used to them. .
- Now, the strategy here is to be market .
- neutral, which means we're either going
to be long the bull ETF when the market is .
- rising, or long the bear ETF
when the market is falling. .
- Right now, the energy sector has been
moving up, so we are long the bull. .
- And of course, at some point we're going .
- to be along the bear,
but it isn't going to be today. .
- So we've got some room between where we .
- closed yesterday and the upper
channel line on the bare ETF. .
- And we've got lots of room between where .
- we closed yesterday and the lower
channel line on the bull ETF. .
- Now, the full name of the Horizon Beta Pro
product for the TSX 60 looks like this. .
- We just shortened it
down to the TSX 2X bull. .
- And right now we are along this bull. .
- You can see on the Panic Zone chart that
we're coming up to the top of the range. .
- We have not had an early warning signal .
- yet, but we have had a bearish
reversal signal which came yesterday. .
- And so we've been along this particular
ETF for a couple of weeks now. .
- The buy signal came with the first
close above the upper channel line. .
- You came in the next morning and you .
- bought it at the open just
below the 16.50 level. .
- Then you looked up and we had a price
target of 17.19 and then 17.97. So you've .
- had several opportunities to sell partial
positions and lock in some profits. .
- We took a run yesterday
towards 18.75, didn't make it. .
- We traded up at that level
back in September. .
- That's where we peaked up at the 18.75
level and then quickly reversed. .
- So it is doable to head up to 18.75,
but we may not do it. .
- We'll have to wait and see how the market .
- reacts to the Fed
announcement this afternoon. .
- But you should have an order in up there
at 18.75 to sell a partial position. .
- Then looking at the 2X bull for the S&P .
- 500, we do have an early
warning signal up there. .
- We've had a couple
of bearish reversal days. .
- The pros are still in control. .
- On Wednesday, we need a closed blow,
12.41 to give us a sell signal. .
- You can see the buy signal back here. .
- The next morning we traded back .
- in the channel, so you got
to buy it at a discount. .
- And now, looking up from where we started,
12.50 might have been too close for you. .
- So you've got an order filled up there at
13.28. Now we're trying to get to 14.06. .
- Then looking at the Nasdaq. .
- The Nasdaq hasn't really done anything. .
- It was very oversold,
but really hasn't picked up the pace. .
- We don't have an early
warning signal there. .
- If you look, you can see the pros have .
- given up control on the Nasdaq ETF,
and that's probably not a good sign. .
- We haven't seen a lot of downward selling
pressure just yet, .
- but the pros aren't that interested
in the Nasdaq at the moment. .
- On Wednesday, close below 8.57 would give
us a sell signal for this particular ETF. .
- If we can break out above 9.38,
then 10.16 is our next profit target .
- and you should have an ordering up
there to sell a partial position. .
- Of course, the Nasdaq looking so weak, .
- we could switch between the bull
and the bear on Tuesday and a close above .
- 9.21 on the Bear ETF would
give us a new buy signal. .
- Now, it's important to remember that we .
- don't always get buy signals
and sell signals on the same day. .
- So you could actually get kicked out .
- of the Bull ETF and not have a buy
signal for the Bear ETF on the same day. .
- So just be ready if that happens to sit .
- on your hands and wait and see if the
market continues in the same direction. .
- Now, looking at the 2X bull .
- for the TSX Energy Index, and remember,
this is the energy sector. .
- These are stocks we're watching,
not the commodities themselves. .
- There's an early warning signal up there,
but we've played through it. .
- We made a new high yesterday,
so there was a buy signal back there .
- and the market gapped up,
filled the open gap and then moved on. .
- So the next morning you came in, .
- you bought at the open and we've
been moving up ever since. .
- You've had the chance to take money
off the table at $50 and at 56. .
- 25 now, you still should have
a partial position left. .
- Trying to get rid of that at 62.
50. .
- Now, looking at the Gold Miners 2X ETF,
you can see this sector has not been .
- performing well for the
past six months or so. .
- You can see that it was
in a big bear market. .
- And of course, if .
- something's in a bear market, we're making
money because we're along the Bear ETF. .
- But here we are, we've been trading
sideways for a few months now. .
- We're currently long the bull ETF. .
- Things would change on Wednesday
with a closed blow 10.60. We're trying .
- to get to 12.50 and we're having
a really hard time doing that. .
- So there's a good chance that we may see
a sell signal for the bull and we'd need .
- a close above 8.86 to give us a buy
signal for the Bear ETF on Wednesday. .
- And that, of course,
is for the Gold Miners ETF. .
- OK, folks, that's all for this
morning's presentation. .
- I hope you found that useful. .
- If you have any questions at all,
please drop me an email. .
- Have a great day. .
- Next time you'll hear my voice
is on Thursday morning. .