Position Update: SPXU & SRTY (long)

Both SPXU and SRTY (3x leveraged short the SPX-500 and 3x leveraged short the Russell 2000) were entered last week as trading positions, meaning not a full size core position, but they do have 3x leverage. SRTY was entered 10/14 in very small size and added to on Friday (10/18), the draw down there is only -0.63% so nearly flat. SPXU was entered 10/16 and the draw down is -4% which is not bad in my view for a 3X leveraged asset.

I would seriously be considering adding to them, but my initial risk management plan doesn't allow for any larger of a position. I'll put out a post if we are at a screaming spot where I'd add or start a new position (if I didn't already have an active one), but this will be only if there are just unreal signals as I've already entered on what I think are good looking signals.

Here's what they are looking like now, the only thing that is missing in my view is the reversal "PROCESS", yes we can have a "V" reversal or a reversal "EVENT", but they aren't common, they aren't my favorite as they typically don't supply much support, but there's a chart I showed last night that may make this a moot point and I'll show it again in this post.

First SPXU...

 This is an intermediate term, pretty strong chart (we use to use these signals on 10-15 min timeframes for swing trades until the market became very extreme after 2012). This leading positive divegrence through the entire decline may look out of place, but remember this chart as the chart from last night will have some interesting confirming signals.

The still strong, but shorter 5 min SPXU chart is leading positive as well, you'll notice it too is through virtually the entire move down. I want to remind you how many charts I've chown you in which price moves (in this case) up on a reversal and passes the first point in which a new divergence began, that would be virtually the Oct. 9th top. 

Also note the recent, very sharp leading move up in 3C from late last week and today.

This is the intraday 1 min chart, I'd probably puyt out an additional post if this 1 min chart started to lead positive and look like the chart above where I was talking about the leading positive from late last week.

The rounding process is in place here and there's a potential head fake/stop-run, but it really doesn't look big enough to me, I'll be setting alerts for a larger stop run and that would also be a high probability entry point once 3C confirms a head fake move.

As for SRTY, the 15 min chart went negative to the left and price fell, we had a brief consolidation and small bounce and we have an almost identical leading positive divegrence through the entire decline.

The confirming charts are above in SPXU that is doing the same thing and below in the IWM.

 This is intraday 1 min action, a couple of negatives steering price lower and a leading positive, I'd like to see this 3C chart also go vertical for a new entry or add-to position. Add-to is NOT the same as dollar cost averaging, an add-to position has to be part of your risk management plan BEFORE you ever enter the first share of the position.

 Now recall the SPXU and SRTY 15 min charts and their leading positive divergences through the decline, this is the IWM so it should look almost exactly opposite. I pointed this out last night in saying for the reason I suspect the market moved to the upside, this is the kind of distribution signal I'd expect so I wasn't surprised, virtually the entire move off the 10/9 lows has a leading negative divegrence or the exact opposite of SPXU and SRTY 15 min charts, that's pretty good confirmation in my opinion.