The indices started to bounce today and it will be interesting to see if this bounce can carry the indices to their declining 20day or 50day sma's. While some money can be made to the long side I am thinking that when the downtrend resumes it will be quite swift. Small caps may be hit hardest in a downtrend, so I am looking to the Russell ETF's for shorting opportunities. Specifically, I will be looking at leveraged UltraShort Russell 2000 ProShares (Public, AMEX:TWM).
Here is a chart of the Russell tracking ETF which shows where I suspect this bounce may be rejected.
iShares Russell 2000 Index (ETF) (Public, NYSE:IWM)
One thing I've been thinking about is how most bloggers are waiting for a bounce to short and staying away from the long side. There are times to be a contrarian and times to follow the obvious path, but I think it's interesting that so many are expecting this bounce. We'll see what transpires, but I am still expecting much more weakness.
Good Luck,
Joey
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Nice chart work. I too love the 20 day to play off of. I agree on more downside.
Thanks woodshedder. I love the 20 especially since it's the mid band for standard bollinger bands (which I'm sure is a reason you like it too). It looks like we use similar charts and I have a lot of the same issues with juggling two careers. I will be visiting your site regularly.
Thanks again,
Joey