In “A Fine Day To Exit”, 7 weeks ago, I announced restoring my TZA hedge position.
TZA opened the next day at $20.62 and a month later it was already 19% higher.
I’m still holding it, as markets are too extreme to rush to dump a levered hedge.
Meanwhile it’s come full-circle, closing today at $20.10
This chart shows percentage swings in the Dow from peaks to troughs in sentiment as reported by the Investors Intelligence Advisors’ Survey, and it reveals the sad truth that professional advisors - supposedly experts - are really just lemming trend followers and perhaps not so intelligent after all:
They were most bullish at the top, and most bearish at the bottom; dead wrong. And they’re more bullish today than in the past several years.
The chart also shows history repeats, and I have every confidence this cohort will be dead wrong again so I’m adding a 2nd TZA position at tomorrow’s open.
No matter what happens, I’ll always sleep better being on the opposite side of the chronically wrong.
TZA is the Direxion Small-Caps 3x Bear ETF. Click here for info.
I’ve had two prior TZA positions.
The 1st was sold for a gain of 13% in 7 months.
The 2nd netted a 16% profit in 5 weeks.
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