UltraShort Financials ProShares (SKF)

I called it exactly right the last two times, bouncing in and out of this pick. Let's see if I can do it again. As I see it, this pick (one of a collection of Short ETFs) is due for a rise as the rest of the market sours on Geithner's plans. The market is still well-overvalued, and needs to fall 25% more (down to about 5500 on the DJIA) to even begin to come in line with the traditional P/E ratios of bear markets. It's not going to fall all that way in one fell swoop (hopefully not, for that would really freak out those who've not been paying attention), but I do anticipate it oscillating and trending downwards. Until that "bottom" is finally reached, however, I intend to make some points (and some money on limited ETF selections) during this time.

I may be a little early on this one (just like the last time I played this swing), but from what I'm seeing in the Slow Stochastics regarding this ETF, it is due for a turnaround, a rise from this point. I'm hoping this will happen in the next 2-3 weeks, if not sooner.

To me, it's clear from the Slow Stochastics of some big ETFs that they are due for a turn-around. Take a look at TZA, ERY, BGZ, QID, SDD, SDK, RWM, SFK, and SJF, to name a few. All are below the 20% "oversold" line, some below the 10% line, meaning they are more likely to rise than fall further, and soon. The "Williams%R" indicator, which leads the Slow Stochs by a few days, is showing even greater "oversold" tendencies, and in some cases is starting to head back up. Geithner's plans released on March 22, 2009, certainly put a hold on this ETF rising, but that hold will be only temporary, as I see it.

Again, like I wrote last time, if investing for the masses is anything, it's psychological. So, I think we'll see a general fall in the major indices starting next week as despair once again begins to settle in on Joe Investor and people realize that Geithner's plan really only help out the banks at the taxpayers' expense. This downturn should run for 2-5 weeks, depending upon what actions the Fed takes (like putting a ban on short selling again, which would not surprise me). That sort of ban would weaken my case for these ETFs, but it's not going to stop the freight train that is coming down the tracks.

Finally, let me be absolutely clear: I still believe we are definitely NOT at THE bottom. We have at least another 25% to fall:
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=137397&t=01009471911616523983

If you do not have time to watch your purchases over the next 2-5 weeks, don't play the game. I have a feeling it's going to be very volatile and too risky for most people (probably including myself, if I had any sense at all). Good luck!

"You ought to be able to explain why you’re taking the job you’re taking, why you’re making the investment you’re making, or whatever it may be. And if it can’t stand applying pencil to paper, you’d better think it through some more. And if you can’t write an intelligent answer to those questions, don’t do it."

Bad news has battered the market and it is time for a rally. I recommend shorting this etf. Over the long term the expenses of this etf alone will eat away at gains. A combination of this and the fact that at some point the market will move higher will result in this etf under-performing dramatically.

All the leveraged ETFs trend down. My new idea is to short them all using apposing ETFs (ie URE & SRS, FAS :& FAZ, SKF & UYG) as a hedge and the fact that the long term performance of all the "ultras" seems to be down.

SKF plays a double reverse on DOW Financials. They face the same bond market crisis, Real estate crisis, Consumer purchase slow down. And, The Feds relief is stuck in the Senate. To top it of Ambac has a class action being pursued against it.

From ~$80 to $240 in less than a year then down to $24 in the following 7 months, this ETF is all over the map...However; since the dollar's declining, Washington's printing money and spending our grandkid's future income taxes like a drunken sailor, the Banks can hide the truth about bad Real Estate loan exposure for only so long (not to mention the next round of impending foreclosures in Jan), I believe this puppy has only one way to go; I'm expecting it to double before March.

SHORT IT NEWS

Time to short the financials again. Nothing has really changed.

I wanted to sell skf last Friday March 20 2009 at $130 a share, But i could not you see, Caps web administrators prevented me from doing so, due to the 7 day minimum holding period. I went bullish on SKF at $115 a share on Thursday March 19 2009 after covering short sentiment at $105 (see my closed trades)

Read my blog
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=154884&t=01008124766967875841
http://caps.fool.com/Blogs/ViewPost.aspx?bpid=154884&t=01008124766967875841

Ah who cares, the SKF has been hedge by RTP and in the real world you buy to trade

c'mon now - unsustainable bear market rally.

I am going to bet against the ETF that bets against the banks. Call me crazy, but when even Citigroup says they're making money, that indicates to me this thing is going down.

At least one more leg down - this rally is not supported by fundamentals.

7 day pick for 52 days low

We haven't heard the last of the bad news in the financial sector-credit cards, among others

The financial s have only started exposing their bad books

Only the subprime has started collapsing,as the economy worsens prime consumer loans,commercial loans and credit card debt will start to go bad

The fed is close to being out of bullets,so there is not much to cut as far as the rates are concerned

Inflation is going to keep going up as emerging market appetite for commodities will continue unabated and finally force the fed to raise rates,then these folks are going to get massacred.

The current administration is the best Wall Street can get with GS CEO as Treasury Sec.Things will only get worse from here.

Rally is over

Just putting this on to see the banks fail the stress tests.

When I see more jobs being lost and the market continuing to go up, me thinks another smash downward is coming.

Just makes sense.