SPY - SDS: Geopolitical Uncertainity Driving This Higher (Technical Analysis)

2024-04-19 12:00:33 ET

Summary

• Our Model Portfolio went to cash due to market sell signals, now allocating $50,000 to the inverse ProShares UltraShort S&P500 ETF.
• Our short-term thesis is that SPDR® S&P 500 ETF Trust will continue to decline due to Middle East tensions.
• The market is expected to bounce back after the Middle East crisis is resolved, but weakness is still expected in August due to seasonality.

Our Model Portfolio went to cash because of the market, as represented by SPDR® S&P 500 ETF Trust ( SPY ), Sell Signals. Now we have put some of that cash to work in an inverse ETF that goes up when the SPY goes down. We are allocating $50,000 of our $100,000 portfolio to the -2x leveraged ProShares UltraShort S&P500 ETF ( SDS ) which is now outperforming the Index. (We did this the last time the market turned down on January 3rd at $30.86. We closed that position at $30.41 for a 45 cent loss per share on 1,621 shares.)...

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