Shorting The Market By Going Long ETFs
Markets remain in a clear downtrend, so cash is king for those who operate from long side only until there is a clear buy signal.
With the S&P 500 down six days in a row and lower in nine of the past twelve, there isn’t much out there in terms of low risk entry points on the short side either. But the next few weeks should provide some opportunities to profit on the short side though patience is needed to allow setups to develop.
In last Thursday’s report, we mentioned shorting the Russell 2000 and Nasdaq 100 by going long inverted ETFs $TWM and $QID. Both trades worked out well with the market selling off sharply this week.
The following commentary and chart is from the December 13 report of The Wagner Daily:
“Small cap Russell 2000 ETF ($IWM) has stalled at the trendline two days in a row after a breakdown to new lows last week. If Monday’s low fails to hold, then the $134 – $135 area is potentially in play as the next big support level
After stalling at the downtrend line, $IWM sold off sharply this week.
$TWM followed through immediately from the buy entry.
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