Junk Bonds

I just did a follow up story on Junk Bonds at Trade-Guild, you might want to check it out. This is what I call a piece of the puzzle-it' not a light bulb that just lit up, but it fits in there.

COT is in this junk bond class and the trade did trigger, just keep that stop in place and moving up to lock in any potential gains. the good thing COT did that others did not was to buy out it's competition where others used the proceeds to refinance debt or to pay special dividends, COT actually used it to get a leg up so the trade might not be all that bad.

In any case,

You know the oil long I'd take a shot at. If we get the bounce, I'll be throwing a lot of trades your way, fir the bounce, I still really like the leveraged oil trade (see posts below).

ETFs that you might want to consider, especially at higher prices that are inverse, which means you buy them, but they give you short exposure, include the following...

FAZ, TWM, EDZ, SRS, EEV, FXP, ERY, SSG, SPXU, SRTY, SQQQ, SDOW,  and SMN

LOOKING AT 3C, MY MOUTH WATERS. These are leveraged and set to fly. I would not use ETFs exclusively for short exposure to the market, you need stocks too, but the leverage of these makes them very attractive. If you look at a 5-day chart, each one is a buy right now. We do have this possibility of a pullback, but what if we don't get it? You may want to put together a plan of which of these you like, be sure not to over-correlate. I don't think you need shorts on the S&P, DOW and the Q's  as they are likely to move together, but you may want one of those, China , Financials , Real Estate, etc. So figure which you like, what your allocation will be and consider phasing into them. Maybe you pick up 25% of your intended position now so you have some exposure in case the market just drops like a rock, then you add some in a market pullback/bounce, then you add a little more as we break key support levels and by the time the SPY is under $101 you'll want the position filled out. You'll be playing it like the big boys, you'll be accumulating. You can use a VWAP and buy under the VWAP-Stockfinder has this built in, I have the code for TeleChart-the tabs for both are at the top. I don't think these ETFs will pullback to their 10-day moving averages, there doesn't seem to be enough accumulation in the market for a bounce that big, but maybe they do, that would be an ideal spot to add a nice chunk.

If you have questions about these and how they may work with what's in your portfolio now, email me and I'll gladly give you an opinion if I feel like I can be of some help.

So... Junk bonds, the ETF isn't looking good. I smell default. With banks not lending, if junk bonds implode, where in the world will the money come from to keep these troubled companies afloat?

Have a great week everyone. If I see anything exciting, you'll find it here or on the list later as I'm off to go through some new scans I've set up.