Partial Recovery In Focus: QQQ, DDM, IYT, IWM

By Tim KnightETFsDec 30, 2018 12:26AM ET

www.investing.com/analysis/so-is-that-it-200371764/

Partial Recovery In Focus: QQQ, DDM, IYT, IWM

By Tim Knight | Dec 30, 2018 12:26AM ET

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Equities bottomed early on Wednesday the 26th and rocketed higher, partially undoing the damage for the Christmas Collapse. The DOW managed to tack on about 1500 points to its low, and I suspect equity bulls will enter 2019 limping but relatively optimistic.

As I look at the charts, some of them make me wonder “is that all they’ve got?” In other words, it only took a few trading days to push prices back up to shortable levels, such as with the Invesco NASDAQ (NASDAQ:QQQ):

QQQ Chart

Or the “Ultra Dow” (this is a two-times leveraged fund against the Dow 30 (NYSE:DDM):

DDM Chart

I’m inclined to be patient. “Three days does not a recovery make,” as the sage might say, and there are plenty of other charts that look only “half-healed,” such as the Dow Transports (NYSE:IYT):

IYT Chart

The small caps also look only “half-healed" by way of the Russell 2000 ETF (NYSE:IWM):

IWM Chart

I tried on both Thursday and Friday to get cute and try to short some stocks that seemed they had a chance to weaken, and I got burned on every single attempt. I decided to just keep life simple with my “one and only” short of iShares 20+ Year Treasury Bond (NASDAQ:TLT), whose purpose is largely to be a governor against my impulses to get bearish on equities again.

In closing, the entirety of my positioning is as follows: in my big account, I’m short TLT, and that’s it. In my little “just for fun” account, I remain long Direxion Daily S&P Oil & Gas Exp & Prod Bull 3X Shares (NYSE:GUSH) (triple-bullish on energy producers), long Direxion Daily Financial Bull 3X Shares (NYSE:FAS) (triple-bullish on financials), and long TLT puts. I also am long QQQ puts (small starting position) and iShares MSCI Brazil Capped (NYSE:EWZ) puts, although I suspect those are going to stink for a little while. They don’t expire until March, however, so I’m OK with them.

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Central Banks

Interest Rates

Next Meeting

FED

5.50%

Dec 13, 2023

ECB

4.50%

Dec 14, 2023

BOE

5.25%

Dec 14, 2023

SNB

1.75%

Dec 14, 2023

RBA

4.35%

Dec 05, 2023

BOC

5.00%

Dec 06, 2023

RBNZ

5.50%

Feb 28, 2024

BOJ

-0.10%

Dec 19, 2023

CBR

15.00%

Dec 15, 2023

RBI

6.50%

Dec 08, 2023

PBOC

3.45%

BCB

12.25%

Dec 13, 2023

US 30	35,948.0	-2.9	-0.01%
US 500	4,564.3	-3.5	-0.08%
Dow Jones	35,950.89	+520.47	+1.47%
S&P 500	4,567.80	+17.22	+0.38%
Nasdaq	14,226.22	-32.27	-0.23%
S&P 500 VIX	12.92	+0.03	+0.23%
Dollar Index	103.445	+0.769	+0.75%

Crude Oil WTI	75.79	-0.17	-0.22%
Brent Oil	80.39	-0.06	-0.07%
Natural Gas	2.810	+0.002	+0.07%
Gold	2,042.30	+4.20	+0.21%
Silver	25.405	+0.112	+0.44%
Copper	3.8582	+0.0047	+0.12%
US Soybeans	1,343.00	-4.00	-0.30%

U.S. 10Y	4.316	-0.033	-0.76%
U.S. 30Y	4.492	-0.019	-0.41%
U.S. 5Y	4.252	-0.046	-1.06%
U.S. 3M	5.416	+0.013	+0.25%
US 10Y T-Note	109.73	+0.27	+0.24%
Euro Bund	132.40	+0.05	+0.04%
10-2 Yield Spread	-38.84	+3.34	+-7.92%

Apple	189.91	+0.54	+0.29%
Alphabet A	132.45	-2.54	-1.88%
Tesla	239.79	-4.35	-1.78%
Amazon.com	146.05	-0.27	-0.18%
Netflix	473.97	-3.22	-0.67%
Meta Platforms	327.15	-5.05	-1.52%
Bank of America	30.48	+0.41	+1.36%

Partial Recovery In Focus: QQQ, DDM, IYT, IWM

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