MDM - Model switches to sell August 16, 2011
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:
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.
TWM - Russell 2000 small cap 2x bear.
QID - NASDAQ-100 2x bear.
TZA - Russell 2000 small cap 3x bear.
SQQQ - NASDAQ-100 3x bear.
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