Last Friday, the ProShares UltraShort MSCI Emerging Markets ETF ($EEV) consolidated near the high of the previous day's powerful downward move. EEV may now provide a buying opportunity if it continues to consolidate near the two-day high and forms a pivot, such as a bullish pennant. We will be monitoring this inverse ETF closely for a potential swing trade buy entry:
At the opening bell of last Friday's session, we sold our position in iShares Nasdaq Biotech ($IBB) for a modest gain. Following its big run up on Thursday, PowerShares U.S. Dollar Bull Index ($UUP) spent the session consolidating above its 20-day EMA and appears likely to continue its move higher this week. We remain positioned long, and appreciate that the ETF has a low correlation to the direction of the main stock market indexes.
Both our ETF watchlist candidates from the previous day's Wagner Daily newsletter, UltraShort China 25 Index ($FXP) & UltraShort MidCap ProShares ($MZZ), triggered for entry last Friday, so we are now long both inversely correlated ETFs. As of this morning's weakness, both positions are now showing solid unrealized gains since entry. We will continue to keep subscribers informed of any changes to our stop or target prices on these positions.
Overall, last Friday's price and volume action, although somewhat suspect, still added confusion to a market that is trying to establish a direction. We advise treading carefully through the current market landmine.
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