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Tuesday, November 25, 2008

One of the things i've decided to do at least for now is scale back on adding to mlp positions until we get some visibility on q1 distributions. Kinder Morgan (KMP) has given the all clear signal for them...but among the damaged mlps in single digit land; the market is telling you that it is forecasting a yield cut. IF and thats a big IF...the market is wrong...many of these stocks will double or even triple in a hurry. This will especially be true if the credit markets every get back to some semblence of normal. But for trading opportunities i think right now you are better off playing the leveraged ETF'S and ETN'S.

Last week i posted about using FAS as a way of taking advantage of triple leverage. What i missed was FAS was triple financials. Now as it happens the trade worked for me as i laddered in from 35 (started way too early) down to 12. I had an average price of 20 when it was all done and sold this morning pre-open at 25. I would have stayed away from financials but sometimes luck shines your way. Also hedged by selling call options and bought them back yesterday thanks to great executions and spreads wide enough to drive a mack truck through. Glory!

Large cap triple's symbol is BGU which is the better non financial...or at least less financial...and you get 3 times the move. Also DDM which is double dow industrials as another way to play upside in case we get left behind in mlp land. This story has a list of the available triple leveraged etns. Also story this morning on leveraged etfs starting for commodities and currencies and next week we will see gold and silver arrive. Food for thought.

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