Trade of the Week: How to Profit if the Wheels Come Off...

I have been warning you for the past few weeks that mid-September looks to get ugly unless you plan on being short the market -- which is my plan.

Below is my time-cycle forecast for the S&P 500 for the next few weeks:

This coming week looks to be a shorting opportunity. I will be selling into an expected rally that will last only until either the end of this week or early next week. Then, as you can see, if the time-cycle forecast proves to be correct, the market could begin a stair-step move from about 1120 to near 1020 -- a decent opportunity to make money if the trend holds.

I prefer to buy inverse exchange-traded funds (ETFs) in falling markets, rather than shorting individual stocks. The reason is entirely due to risk. A positive exogenous event can occur at any time with any individual company that could push it from a declining trend to a spike higher. It is the risk of these potential upward spikes that put more risk on an individual short trade than I normally like. (more)