In the past days, the US markets has been experiencing a medium size correction. Markets have topped in around August 2nd with the S&P at 1709. The S&P is expected to drop around 10%, but we can't tell for sure if this will happen at exactly 10%. It may be 6, 8, 10, 12, or 14%. So, the average is 10%.
Since late July, i have been all cash with my 401k and brokerage account. I'm waiting for the markets to bottom at around 8% and i'll start buying. But, one thing worries me. In May 6 of 2009, the markets when down around 6 to 8% in 1 day. The drop was part of a major correction called Major wave 2. This summer, we are experieincing a Major 4 correction. We are only at the beginning with 3% already down. I'm going to take the risk and start buying at 1580 and below. Because, i think this is how deep we'll go. Or more?
Week Aug 19th:
I bought some longs on Monday as i think the S&P will bounce a bit upward. Today, my UPRO and SPXL gave me a 1.2%. In my 401k, i'd bought Goldman Sach's Small Cap Value. I should have around 1.5% gains by tomorrow. I'm only invested around 20% all together as this bounce will be short lived. After that, we should continue the decline and i'll be ready with my short positions.
My trading strategy and gains:
401k = 16.3% up YTD (33% invested on small caps). Projection by end of year is 24%
Brokerage = 18% up YTD (15% invested on triple long ETFs) Projection by end of year is 28%
I bought some longs on Monday as i think the S&P will bounce a bit upward. Today, my UPRO and SPXL gave me a 1.2%. In my 401k, i'd bought Goldman Sach's Small Cap Value. I should have around 1.5% gains by tomorrow. I'm only invested around 20% all together as this bounce will be short lived. After that, we should continue the decline and i'll be ready with my short positions.
My trading strategy and gains:
401k = 16.3% up YTD (33% invested on small caps). Projection by end of year is 24%
Brokerage = 18% up YTD (15% invested on triple long ETFs) Projection by end of year is 28%
