5 PowerRatings ETFs for the Next 5 Days: SH, TWM, SKF, MYY, DOG
Stocks soared again on Thursday, picking up where they left off from Tuesday’s strong move higher.
This is when mean reversion trading with high Short Term PowerRatings stocks and ETFs becomes truly interesting. With the markets ramping higher and higher and even those who had taken to referring ruefully to the “Obama Bear Market†starting to breathe in the bullish vapors, it is not easy to look at short ETFs — high Short Term PowerRatings or not — that are plummeting the way stocks were only a few short months ago.
But that is exactly the task at hand.
There have been other rallies that have looked impressive. And as I have written in the past, it is never easier to buy into a market that has already shown strength. After all, who wants to eat in an empty restaurant? Or shop in an empty store?
Nevertheless, when it comes to trading — especially short term trading — the edges that we have found suggest that it is often far better to be buying markets that show weakness rather than strength. This is somewhat commonsensical when you think about it: buying an otherwise strong stock or ETF when it is on sale makes it that much more likely that you will be able to sell that stock or ETF when demand returns and that sale price is remembered as a real steal.
The same is true when it comes to buying short ETFs trading above their 200-day moving averages. As with stocks, the more they pullback toward their 200-day moving averages, the more interested in these opportunities we become. And as these stocks and ETFs earn Short Term PowerRatings upgrades, our interest in them as potential trades only grows.
Below are 5 exchange-traded funds, some with Short Term PowerRatings as high as 10 — our highest rating –  that short term traders should keep an eye on over the next few days. As markets become increasingly overbought, those who bought first will be looking to take profits. And in that profit-taking should be significant opportunity for owners of short ETFs, which advance when stocks decline.
ProShares Short S&P 500 ETF
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SH |
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PowerRating) Short Term PowerRating 10. RSI(2): 4.98
ProShares UltraShort Russell 2000 Index ETF
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TWM |
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PowerRating) Short Term PowerRating 10. RSI(2): 6.35
ProShares UltraShort Financials ETF
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SKF |
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PowerRating) Short Term PowerRating 9. RSI(2): 3.32
ProShares Short S&P 400 Midcap Index ETF
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MYY |
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PowerRating) Short Term PowerRating 9. RSI(2): 5.16
ProShares Short Dow 30 ETF
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DOG |
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PowerRating) Short Term PowerRating 9. RSI(2): 6.12
Does your stock trading need a tune-up? Our highest Short Term PowerRatings stocks have outperformed the average stock by a margin of nearly 17 to 1 after five days.
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