Market is up but IWM is up like crazy. Market will pullback but IWM should crash. Small cap average for the last 10 years is less than 5% and 80% in 7 months says something is not right. I don't advocate shorting IWM while I am short but I like to discuss about it. I know that I will get lots of responses like trend is your friend or things like that but when the market drops less people act fast and sell so they suffer. My advice is to increase your cash position by selling 50% of your holdings in 401K and investments. Oil is up No good job report Housing is starting to cool down (ask realtors) $2000 more tax this year Inflation is there world economy is not good and growth in china and India is not good anymore Europe is in recession and Market is in all time high
we living in upside down world.common sense does not apply. specially to the stock market. on consumer level- every other car i see on the road in my area is now either MB or BMW. i never seen so many. all brand new. recession? what recession?
I know what you mean. That makes the pullback more dangerous. The only shining thing is the false hope of being rich by stock market. When that carpet is also pulled away, You will see lots of cries. By the way people have learnt to be in debt because government will help them if something happens. Most of those cars are bought by $800 a month on 6 year loan or are leased. It is not real wealth (they don't own it. They are enjoying it for the moment)
im wont call a top to this bull market.. but a short trade on all indicies should be good for 3%-5% based on my TA. the big story right now is all the big tech companies missing estimates and guiding lower.. the most bullish investors and traders still take profits and rebalance at some point
Watch for a huge drop on small caps and IWM as we get closer to the end of August. Good bet is to buy TZA. You should have the heart of steel for this trade but it should be very rewarding.
With rising LT rates impacting stocks, I also think being long TZA could be a good bet if not held for too long. Probably better to be 3x short Russell futures rather than suffer TZA's decay from daily rebalancing.
But I'm concerned if stocks hit another short term low, then it's another round of bear bashing. Maybe better opportunity to short at higher levels? I'm waiting for the next round of the Fed choir singing dovish tunes any time now, or perhaps a Hilsrenrumour.
You can go long TZA and also sell covered call at higher strike prices to cover TZA decaying. By the way TZA does not decay in bear market.