Recovery Rally in S&P 500 Short ETF

The pullback in the S&P 500 Depository Receipts (AMEX: SPY) from 84.80 to 81.30 since Monday has coincided with the recovery rally in the ProShares Single Leveraged Short SPY (NYSE: SH) from 73.00 to 76.00, which also happens to have filled the down-gap left behind last Thursday.  Classic technical behavior would argue for the SH now to decline after having filled the gap.  If such a scenario unfolds, then the SH should press back into the 74.00-73.80 area, which would imply a climb towards 84.00 in the SPY concurrently.  We maintain a long position in the SH in our model portfolio as a partial hedge against an implosion in our long positions.

  • Action-Oriented Trade Set-Ups in Stocks & ETFs
  • Macro Analysis of the Broader Markets
  • Detailed Technical Guidance for each Trading Idea
  • Live Interaction w/ Mike & Our Member Community
  • And Much, Much More!
Join Now! - Special Offer!
Veteran Wall Street analyst and financial author, Mike provides detailed and timely analysis and trade set-ups on a range of markets. Read more...

Have Mike's “Out Front” morning analysis delivered FREE to your email inbox twice weekly!