Frequently Asked Questions

Dr K Market Direction Model
Are you still recommending TZA based on your Market Timing Model having a sell signal?

The model issued a sell signal on August 11. It is late to initiate a position in an inverse ETF at this stage. That said, one could, depending on their money management style, pyramid a position in an ETF provided they are showing a profit. Money management style depends on the degree of risk one is willing to take. Some investors are fine with holding just 2 or 3 names while others prefer to hold several or more. Of course, the more names one owns, the more eggs one has to watch. So one should be mindful of this and not hold too many eggs if it ends up costing them their focus.

TZA is showing a profit of about 10% since August 11. Today is August 30. Some conservative investors may wish to take half their profits here. Others may with to hold their whole position. Again, this is a matter of style. Some investors may have be holding what they would consider to be a half position, thus can sit tight. Others may have plunged into TZA and wish to take some of their profits off the table.

Published: Aug 30 2010