2024-07-03 17:22:07 ET
Summary
- Timing is crucial when trading leveraged ETFs like SPXS, these funds are not meant for long-term investment.
- Current economic indicators suggest downward pressure on stocks, making SPXS a speculative bearish wager.
- Market conditions, high valuations, and political uncertainty indicate potential catalysts for a market correction.
When I last covered the Direxion Daily S&P 500 Bear 3x Shares ETF ( SPXS ) for Seeking Alpha last July, I called the fund a "buy" and noted that timing was everything. If one judges the performance of that call over the last 12 months, which is a negative total return of about 45%, then that call looks quite bad in hindsight. However, and I've made this point in numerous leveraged ETF articles for Seeking Alpha, these products are not designed to be held as long term investments. Rather these are tactical trading products for experienced traders. What I said last July:
Because of the way the exchange-traded fund, or ETF, is constructed, shareholders who don't actively manage positions on a short term time frame will see their capital decay away.
Read the full article on Seeking Alpha
For further details see:
SPXS: The Timing Might Be Right Again