Let me be clear. I think the market is rolling over, and will continue rolling over, until it stops rolling over. When it might stop is too hard to accurately forecast at this point, but if I were forced to guess, I’d look for support near 96 on the SPY, or about 8% lower from today’s close.
Thus, I want some short exposure. Unfortunately, consistently out-performing short-only systems are very hard to come by, and so I’m left with having not enough short exposure, or I will have to make a few discretionary trades.
I’m opting for a few discretionary shorts.
My current favorite is [[IYR]] .
I like that IYR has been denied 3 times at the 50 day average and the declining downtrend line.
A stop above 42 and a profit target near 37 gives a risk/reward ratio of 2:3.
Here are the top holdings of IYR. If you look at the constituent charts, you’ll note that most of them are juicy as well.