Market-Technicals

Financial Market Analysis

By Shawn R. Carpenter

Thursday, May 17, 2007
  Short play for the market?


With leading economic indicators suggesting a slowdown in the US economy is looking upon us, it might be worth some interest to start looking at alternatives. While looking to short involves upside risk exposure, and metals are on fire right now, there is one option that many people may not have gotten their hands on yet. ProShares Short S&P 500 ETF (SH) is a great option for people to get some exposure to a downward move in the market. Buying the SH will enable you to purchase a basket of shorted companies and should prove to bring in some alpha to your portfolio. Take a look at the chart of SH above. You will notice that SH has been in a long downtrend for the last year and half. While the market has been rallying, this ETF has been really hit with bad performance. Yet, I believe that should market conditions deteriorate, SH should begin to rally. Prices remain cheap and seem to be supported by the 59.17 -59.35 level. If the market does indeed to start selling off, more market participants will be searching for ways to increase profits while trying to stave off risk. SH should be able to get more attention if this occurs.
 
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Market-Technicals is a Financial Market Trend and Research blog. Mainly utilizing technical analysis, the research composed is designed to capture market timing techniques, understanding how economic and political forces shape the market, and give speculation as to where the financial market is headed. Encompasing equities, index, sector, ETFs, commodities, and bonds; the expectations are to shed some light as to what "smart money" is thinking.
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