I added TZA, the inverse leveraged ETF, to the Covestor Model Portfolio last Friday for a swing trade to benefit from current weakness in small cap stocks.
1) Underperformance vs.
S&P 500: small caps are not confirming the latest rally
2) Intraday chart setting
up a failed breakout trade from 835 - 845 range.
3) Daily chart setting up
an "anti" trade (check out Adams Grimes or Linda Raschke
4) Potential rejection of
long-term high at 860 could setup major top and lead to large downside move due
to trapped investors.
5) Russell 2000 a good
proxy for risk-on/risk-off sentiment, expecting larger moves when overall
market turns south.
Here is design of the trade
with entry and exit points. Note that (as usual) there is no guarantee that
this trade will work out. There might be a 51-60% chance that the position will