BUY ProShares Short Russell 2000 (RWM)
Posted by intelledgement on Tue, 16 Aug 11
We still expect that the most likely scenario is that The Powers That Be will manipulate the smoke and mirrors to mask the seriousness of our financial problems long enough to conduct an orderly U. S. election in 2012. However, the cracks in the wall—Eurozone sovereign debt issues, U.S. no jobs “recovery” and structural debt/demographic issues, BRICs growth slowdown, Middle East unrest, etcetera—are proliferating faster than the metaphorical wall paper can be applied and thus it is prudent to go short here as a risk management tool to limit the potential damage if things fall apart sooner than we expect.
This time we are using the ProShares Short Russell 2000 ETF (RWM) as our vehicle of choice. Our logic is that a slow growth scenario is likely to negatively impact smaller companies more than large companies (although both will be hurt). This ETF is low on assets—$400 million where normally we prefer a minimum of $1 billion—but the robust average daily shares traded (1.1 million) ensures adequate liquidity.
Previous index short-related posts:
- BUY ProShares Short QQQ (PSQ), Short Dow30 (DOG), & Short S&P 500 (SH) (21 May 09)
- SELL ProShares Short QQQ (PSQ), Short Dow30 (DOG), & Short S&P 500 (SH) (21 Jul 09)
- BUY ProShares Short QQQ (PSQ), Short Dow30 (DOG), & Short S&P 500 (SH) (6 May 10)
- SELL ProShares Short QQQ (PSQ), Short Dow30 (DOG), & Short S&P 500 (SH) (21 May 10)
- BUY ProShares Short QQQ (PSQ), Short Dow30 (DOG), & Short S&P 500 (SH) (25 May 10)
- SELL ProShares Short QQQ (PSQ), Short Dow30 (DOG), & Short S&P 500 (SH) (4 Nov 10)
- BUY ProShares Short S&P 500 (SH) (16 Jun 11)
- SELL ProShares Short S&P 500 (SH) (12 Aug 11)
