I think it's short time for SPY (S&P 500). Instead of shorting SPY, I'm looking to go long on SPXS (3X Inverse of S&P 500), buying on a pull-back to the 0.618 level from the recent move, stop just below bottom bottom support, target is first major resistance level (for about a 2.2 reward to risk). Single bottom bounce (or "ugly double bottom" bounce) play.
There's a good chance that I'm wrong, but the TA supports my stance, IMO, and I'm of the opinion that the S&P is due for a good sized correction.
I was going to choose SH (1X inverse) but I noticed that it doesn't track the S&P 500 that well at all. For instance, the first major support on the S&P 500 (major resistance for the inverse ETFs) sits at about a 2.3 reward to risk ratio, when buying at a 50% pullback to the first resistance level, and setting the stop just above top resistance. The SH, on the other hand, which is supposed to track the S&P 500 (inversely) gives us just a fraction over a 1 (1.2) reward/ risk going off of those same parameters for buy price, stop and target.
That's a HUGE difference.
I expected the 1X to track the S&P closer than the 2x and 3x ETFs in terms of ratios between support/ resistance levels, but it doesn't appear that way upon further inspection. Not by a long shot.
