MDM - Model switches to sell August 16, 2011

Published : August 16 2011 at 14:20 ET

A lackluster bounce among leading stocks and major indices has pushed the model into a sell signal.


To minimize losses in the event of a false signal, your exit point (either selling inverse ETFs or covering any short ETF positions) could be set just above the August 15 closing price of the NASDAQ Composite 2555.20.

The NASDAQ Composite as of this writing is at 2520.93, which is about 1.3% away from the sell stop of 2555.20. If you trade a 3-times ETF, expect roughly a 1.3% x 3 = 3.9% loss if the signal proves false. Note, some 3-times ETFs can be quite volatile so these losses are suggestive rather than certain.

And as always, position size according to your risk tolerance levels.


Recommended inverse ETFs:

1-times inverse

RWM - Russell 2000 small cap 1x bear. It should approximate 1x the inverse of the Russell 2000.

PSQ - NASDAQ-100 1x bear. It tracks 1x the inverse of the NASDAQ-100.

2-times inverse

TWM - Russell 2000 small cap 2x bear.

QID - NASDAQ-100 2x bear.

3-times inverse

TZA - Russell 2000 small cap 3x bear.

SQQQ - NASDAQ-100 3x bear.

This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.