Eagle Strategy For Buying Triple Leveraged Stocks

Eagle Strategy for Buying  Triple  Leveraged  Stocks

• If the trend is bullish, we recommend buying TNA for 3 X Leveraged Russell 2000. This is not a buy and hold strategy. You must take frequent profits. If you think market direction is bearish, then buy TZA  3X Leveraged  Bearish Russell 2000. If you are bullish on the energy, you buy ERX, and if you are bearish, buy ERY. Financial triple leveraged ETFs FAS and FAZ   trade every day.   To trade them first look at  whether  Financial Sector SPDR (XLF) is bullish or bearish.
• As we have been saying all along that you should not buy Call or  Put options as the Stock Market Casino is stacked against  Buyers of options. We are  interested in only  Credit Call and Credit Put spreads, where we become the house by selling Call and Put options far out of the money.

• Sometime the market is ready to go down big time, or is being manipulated by Federal Reserve to go up by printing money. The printing of money can last only so long and then the market starts going down. 

TNA & TZA—Two Love Birds -Same Mother RUT-For Market  Going Up  useTNA &  For Market Going Down  use TZA

Courtesy  www.MikeKapur.com

 This is when we can take advantage by buying TNA for market going up and TZA for market going down. TNA and TZA are Triple leveraged ETFs for Russell 2000. How can we determine when to BUY and when to SELL •  

For trading  in TNA & TZA , you must use Technical Tools to get buy and sell signals from underlying   RUT ( Russell 2000) Chart which is the underlying  index behind TNA & TZA.

USE OF MOVING   15 & 50  DAY  AVERAGES  TO BUY TZA & TNA

Moving averages help us to first define the trend and second, to recognize changes in the trend.

The 200 SMA is  also used to separate bullish  markets  from bearish  markets. Studies have shown that by focusing on long positions above this line and short positions below this line can give you a slight edge.

Traders add this moving averages to all of their  charts in all time frames. Yes. Weekly charts, daily charts, and intra-day (15 min, 60 min) charts.

The Crossover

The Crossover is a common way of using multiple moving averages.  The crossover consists of two moving averages, one being shorter than the other. When the shorter one crosses below the longer one, it’s a bearish sign. When the shorter one crosses above the longer one, it’s a bullish sign.

• The 50 and 200 day MA crossover is very widely followed. Anytime the 50 day MA crosses above or below the 200 day MA, you can bet many people are taking notice.

If the stock goes above 15 day moving average, the stock is very likely to keep on moving up, and we get a BUY signal and vice versa. If the stock goes below the 15 day moving average, we will get a SELL signal. . Since the underlying stock for TNA and TZA is RUT, we use RUT signals to buy or sell TNA & TZA

CLICK HERE  to see the BUY & SELL signals on TZA

The reason for  trading TZA AND TNA only  is that If RUT goes up by 5%, TNA goes  up  by 15%, and if RUT goes down 5%, TZA goes up 15%. You can buy TNA and TZA by putting down only 50% down  just like any other stock. Thus in case of TNA and TZA, our leverage is 6. We  have a large leverage without taking the risk of buying options.

.Let us look at the 3 month   chart of RUT. We are using 15 day, and 50 day moving averages  on RUT to get buy and sell signals   for TNA & TZA. In late November, 2012 we got a BUY signal based upon this criteria. Then  we got a SELL signal on  RUT and, therefore, SELL signal on TNA and BUY signal on TZA. The reason for  trading TZA AND TNA only  is that If RUT goes up by 5%, TNA goes up  by 15%, and if RUT goes down 5%, TZA goes up  by 15%. You can buy TNA and TZA by putting down only 50% down  just like any other stock. Thus in case of TNA and TZA, our leverage is 6. We  have a large leverage without taking the risk of buying options.

.Let us look at the 3 month   chart of RUT. We are using 15 day, and 50 day moving averages  on RUT to get buy and sell signals   for TNA & TZA. In late November, 2012 we got a BUY signal based upon this criteria. Then on Feb 21, 2013, we got a SELL signal on  RUT and, therefore, SELL signal on TNA and BUY signal on TZA.

CLICK HERE to see enlarged chart of RUT and Buy Signal on RUT

See below the Buy and Sell Signal  on TNA

CLICK HERE to  see the enlarged chart for BUY & SELL signal on TNA

From Nov 23, 2012  to Feb 21,2013 RUT went up by 15%, whereas TNA went up by 30%. If you use a margin of 50%, the gain is  twice as much, equal to 60%. For a comparison, Dow Jones Industrial Average went up   by 8.9% and SPX went up by 9.5%. Thus, you can see that TNA went up 3 times  what SPX 500 went up. Similarly, when the market goes down, TZA  goes up 3 times more than what an average stock goes down?

We are not recommending other  triple, double or single stocks to buy or sell. If you are familiar with other asset classes, you are welcome to use for investment or trading. Similarly, there are many stock market technical indicators to determine when to buy and when to sell. If you know what you are doing, please go ahead.. We wanted to keep it SIMPLE. Rusell 2000 represents 2000 small cap stocks, and we do not have to diversify more than that.

This is the kind  of book you give to your grand children so that they can be millionaires on their own before they are 30.

Elliottwave Theory is good to give you an overall picture of the economy but should

not be used for individual stocks.
To Buy This book   Click Here  http://budurl.com/dyla

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