How To Get Wiped Out In One Day

Bear markets are famous for violent rallies. The volatility is high and trading volume is really heavy. Huge swing can be expected in either direction.

Bear markets see huge downward movement, but are always followed up mind-blowing upward spikes like the one we had today for 889 points. At every downward movement, analysts try to call a bottom, and at every upward spike bears call it dead cat bounce. Who is right no one really knows.

This bear market is so brutal that one can be wiped out in a single trading day if not played with discipline.

Lets just look at 3 charts to prove my point.

SRS – UltraShort Real Estate Proshares
The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Dow Jones U.S. Real Estate index.

After spiking all the way to 205$ today, SRS fell to 133$, a drop of 66$ or -33%.

33% in one trading day ?


SKF – UltraShort Financial Proshares
The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the Dow Jones U.S. Financials index.

After spiking all the way to 184$ today, SKF fell to 136$ which means 24% drop of value.


FXP – UltraShort China 25 Proshare
The investment seeks daily investment results, before fees and expenses, which correspond to twice the inverse of the daily performance of the FTSE/Xinhua China 25 index.

FXP closed at 183$ yesterday. Today it opened at 150$ and closed at 118$, a drop of 64$ or -35%.


Bottom line is if you get too greedy or undisciplined in this bear market, say bye bye to your trading career. Early and late shorts will be squeezed each and everytime….

  • I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Betty

    http://www.my-foreclosures.info

  • I recently came across your blog and have been reading along. I thought I would leave my first comment. I don’t know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Alena

    http://www.smallbusinessavenues.com

  • sJ

    Thank you for stopping by…