Short Russell 2000 ProShares (AMEX:RWM)
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BUY ProShares Short Russell 2000 (RWM)—Again
We got the Bernanke bump we were expecting—the market is up today, although looks to be a more modest advance than we had expected. It would have been fine just to stay short here, but we will probably end up a bit ahead when we come back in at the close today (that is, the price we buy RWM at today will likely be a few cents less than what we got for the shares we sold on Tuesday).
We still expect that the most likely scenario is that The Powers That Be will manipulate the smoke and mirrors to mask the seriousness of our financial problems long enough to conduct an orderly U. S. election in 2012. However, the cracks in the wall—Eurozone sovereign debt issues, U.S. no jobs “recovery” and structural debt/demographic issues, BRICs growth slowdown, Middle East unrest, etcetera—are proliferating faster than the metaphorical wall paper can be applied and thus it is prudent to go short here (again) as a risk management tool to limit the potential damage if things fall apart sooner than we expect.
We are again utilizing the ProShares Short Russell 2000 ETF (RWM) as our vehicle of choice. Our logic is that a slow growth scenario is likely to negatively impact smaller companies more than large companies (although both will be hurt). This ETF is low on assets—$400 million where normally we prefer a minimum of $1 billion—but the robust average daily shares traded (up to 1.9 million) ensures adequate liquidity.
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There is no sign of a bottom in this crisis. For a while, the only way to make money will be on the short side. The time decay will not stop this ticker from outperforming through the Fall season. But I wouldn't hold it above $50.
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Covestor Model Manager Andrew Laubie bought RWM in his Russold 2000 Long-Short Covestor Model ( http://covestor.com/Andrew-Laubie )
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I wouldn't try this with *real* money!!
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Testing a theory here with this account, shorting all short ProShares for starters.
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Fading every pick made by Ultralong
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etf short
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Short Russell2000
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shorting the shorts
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S&P at resistance at 1395 will pull back. I'm calling a temporary top today in the S&P at 1395 (yes I know I'll look like an idiot if I'm wrong but that hasn't stopped me before) It's 2:13 PM we'll see.
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Shorting the shorts...long term.
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