The IWM/SPY ratio fell below the lows of the previous five weeks and the weekly TNA chart shows a bearish Head and Shoulders pattern.
From the October 3, 2011 lows the Russell 2000 Small Cap Index rose 35% versus 25% for the S&P 500. Currently, the small caps are lagging and a correction is coming soon (it can start even today).
TNA has options and premiums on the options are high now.
To make substantial profits from the coming correction and to minimize risk, a portfolio from a combination of TZA and TNA can be used (with more money committed to TZA) and covered TNA options can be sold.
The sale of the TNA options will maximize profits if the decline takes place and the options expire, or will reduce loss if the small caps rise instead of declining.