TZA Trade Example

Just as the longer term market average charts have seen a lot of damage the last few days, the longer term inverse ETFs have seen very positive signals over the a longer period.

Earlier I mentioned using a market bounce to buy in to price weakness in these ETFs.

 TZA 60 min chart with a very positive divergence, yesterday was a typical shakeout below support in yellow that we often see just before a move in the opposite direction, as I pointed out, we saw the same in the market averages today.

Here's an example on the SPY intraday...

A dip below intraday support in the SPY before it headed a bit higher in to a positive divergence, like TZA yesterday above.

Here's the 1 min TZA chart, almost the mirror opposite of the SPY 1 min above, seeing a short term 1 min negative divergence as it should being an inverse ETF.

The idea is the long term charts in inverse ETF's like TZA are showing very strong positive divergences while the market averages on the longer term charts are showing very negative divergences. A short term bounce (and I would think we would get a little more then what we saw today off the lows), should pull TZA back. As the market bounce goes negative short term, TZA and other inverse ETFs should go positive short term offering a chance to buy them at a discount from here, while the longer term positive divergences in these inverse ETFs give them support.

I'll put out a list of several that I think will be good candidates.