RE: RE: For the TradersYes, I'm looking for roughly the same move say Dow "a few thousand" in 2011. The important point right now though is that we are about half way through this short term crash.
If you thought the first half was extreme just wait...the market is about to start dropping a lot faster. We will have some rallies as we saw yesterday, but again trading FAZ is tricky, and the moves are fast, and getting faster.
I believe there will be one or more limit down days in the second half of the crash where the US markets will close for 1 hour during the day, then re-open.
FAZ will be like a bucking bronco. The difficult part will be not to get bucked off too soon. Then, when the public capitulates (which will end the crash), it will be time to get out of FAZ and look at FAS, or pick stocks. You will know the crash is just about over when the news media is talking about the crash nonstop. None of that is happening now. In fact, most retail investors are still bullish, looking at this as a "little pullback" or "correction". Not so!
The rally after this will be very strong lasting a few months. Later in the year is where things will really come unglued and that will make this crash look tiny by comparison.
Excellent points. Yes, I have thought about the same issues, and I agree. My feeling is that these ETFs will work fine for this crash, but the larger crash will likely create problems for the ETFs. During that one it might be better to have a few different strategies. Maybe short stocks outright for a while, and then at some point pull out some cash and switch to other strategies. I believe gold will come down a lot during the first part of the crash. Physical gold might be worth looking at later.
What concerns me the most is that banks and currencies will become unstable. If you are short and your brokerage firm or bank goes down, then what.... We can't count on government bailouts this time around.
SC