Skip to main content

Two ProShares inverse ETFs not yet overbought

I wrote a post this past weekend that identified the strongest BUY and SELL signals in the ProShares lineup of ETFs.

All the strongest BUY signals belonged to the short and ultra-short ETFs.

With the market looking shaky today amid bad news from UPS, continue strength in oil, further weakness in home prices, etc., it didn't seem unreasonable to think about a little downside protection.

In the weekend's post, I cautioned readers that it is dangerous to chase the ultra ETFs. They can change direction on a dime and moves of 2%, 3% or more per day are far from uncommon. It may be best for now to stay away from those ETFs that are already on the list of strongest performers.

An alternative is to look at those ETFs who were not on the list of strongest signals. Notable by their absence in the list of strongest BUY signals were the Ultra-Short MidCap 400 (MZZ) and the Ultra-Short QQQ (QID).

These two inverse ETFs having been moving up since the recent market peak in mid-May but not nearly as aggressively as the Ultra-Short DOW 30 (DXD), for example. This is due to the fact that NASDAQ and mid-cap stocks have held up decently during the current down-turn.

If you believe the recent market peak was a sucker's rally and that stocks are headed for further lows, these two ETFs may be good choices. Note that they both trade with decent volume, especially QID.

Comments

Popular posts from this blog

Brazil - in a bubble or on a roll?

A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation

Unlock Stock Market Profits - Key #1

This is the first in an ongoing series of articles where I discuss what I feel are keys to successful investing. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) There are two basic steps to investing. First, you need to find stocks that seem to have some potential. Then you have to determine whether these stocks are actually good investments. There are many stocks that at first glance look interesting, but further research reveals that there are too many negatives to warrant taking a position. This first post in the series starts at the beginning: getting good investment ideas. Key #1: If something special is happening to a stock, it will be reflected in some kind of unusual activity in the markets. As individual investors, we will never be the first to know; however, unusual activity can be an early sign that allows us to follow the Wall Street professional

Unlock Stock Market Profits - Key #4

This is the fourth article in a series of posts describing 10 tools to help you identify and evaluate good investing ideas. It is based on a post that provides a summary of the ten keys that individual investors should use to identify profitable stock trades. ( Click here to read the original post ) With this fourth post, we will continue another step along the path of finding stocks that seem to have some potential. The first post in the series discussed how to use unusual activity to identify investing ideas. The second post described how to use stock screeners. The third post described how to use lists of new highs and new lows. This post will focus on identifying social or business trends in order to find investing ideas. Information on new trends might turn up anywhere. In conversation with friends or business associates, in newspapers or magazines, on TV or though your work. The key is to be aware of trends and how they start, stop or change. We'll start by describing what