Sunday, September 27, 2009
Over the past week, I alerted readers that the equity market looked primed for a pullback, I know how many times have you heard that recently? The bottom line is one should protect recent market gains and in this case, the Itz Pix portfolio. I suggested using covered calls or a put strategy for those more seasoned traders, but for basic and ease of discussion, I'll focus on the ProShares leveraged ETF's SDS & QID. (see charts below)
The week ahead presents several key economic reports, the GDP,ISM Reports, Challenger Employment & the big one...the Jobs Report on Friday!
I continue to focus on the US Dollar, it seems to be dictating the moves in equities as well as commodities. That pesky 76 level has been strong support near term and a technical bounce to the 78 upper-end of the down trending channel a possibility. This is what I see bringing on the pullback, which will be the "pause that refreshes" as we approach earnings season and a year end rally.
The suggested hedges using the Proshares SDS & QID are short term hedges with tight stops.
*click on chart to expand image