As I noted August 3, 2015:
Market participants have every right to fear downside here. If the Dow fails to hold 17,400 support, we could slip as low as 17,000 --- January 2015 support.
Will the bulls attempt to run the market up again? Sure…
Will they lose money doing so again? You bet.
Oil prices, geopolitical issues, the Fed losing control of just about everything, China, you name it… And it’s wreaking havoc.
Until something miraculous happens, we’re headed lower. I’m still a buyer of the DXD and SDS, which we’ve recommended here on July 15.
It wasn’t rocket science. It took nothing more than common sense to know our economy just isn’t as strong as the government and media want us to believe.
Since August 3, the DXD trade ran from low of about $20.75 to $22.47. The SDS trade ran from $19.90 to $21.36. While the gains aren’t huge, you should see the losses on the other side of the trade.
I’ve pounded the table for months about likely downside.
In fact, on May 28, we recommended picking up the Pro Shares Short FTSE China 50 (YXI) as it traded at $23.50. It’s now up to $29.15…
These are just common sense traded based on crisis and opportunity and technical pivots. That’s it…