Brexit Priority Trades – ETFs


Brexit is creating a significant decline in markets. I don’t know if it will be enough to spur much buying from us. Remember, there was an irrational rally this week. What we have to determine is if today’s sell-off is a one day event or the start of a summer correction. Much of the carnage is overseas, so we’ll look there a bit. Scan the limit order lists. I have an article on MarketWatch this morning. The rough draft is in the article section of the forum.

What we should do is focus on those ETFs and stocks that are most attractive long-term and start to scale in with small positions and set limit orders for lower prices as well. Here are the priority ETFs and stocks that are at or near buy prices: 

First Trust Natural Gas ETF – FCG: Buy at $22.50 for 6% of portfolios. I am likely to buy part of that position even if we don’t see $22.50. So, it might take a few small purchases to get to 6%. If we do get the “big” correction, we can make it a larger position then.

Powershares QQQ ETF – QQQ: Buy at $89 for 8% of portfolio although I might add a little prior to that and increase the position 12% if it actually hits $89.

Guggenheim Solar ETF – TAN: Buy at $18 for another 3-4% of portfolio. – OR – buy First Solar (FSLR) at $42 for 2% and SunPower (SPWR) at $13 for 2% as those are the strongest of the sector. You could do both, but if you do, stick with the limit orders. 

I’ve held off on international for the most part, however, I like this:

WisdomTree Europe Hedged Equity – HEDJ: This fund will win as Euro sinks and stimulus is added to support markets. Wait for the whites of their eyes. Buy to 6% with a limit of $42 (this said $46 before, I fat fingered it somehow) which is pretty strong 5-year support. You can buy the first 2% a little higher. It’s opening around $48. 

Be slow handed, buy in multiple lots. It’s okay to buy a 1/3 or 1/4 part of the full position a little above the limit prices.