Roll the dice on ETFs this week, why not? As Jamie Dlugosch at MSNMoney.com said today:
If you are not trading in this market, you are either stubborn or ignorant. For those die-hard buy-and-hold followers, it is probably a combination of the two. ... For the rest of us interested in making money in a market rigged against the little guy, we have no choice but to be nimble. Thank goodness Wall Street created exchange-traded funds.
Think ProShares UltraShort Technology (ETF) (NYSE:REW) and PowerShares Dividend Achievers (ETF) (NYSE:PFM) to get started.
While corporate profits continue to impress, stocks have traded sideways over the past two weeks. Consider yourself lucky that we have not gone lower.
I expect that to change soon. As such, I would strongly consider an ultra-short ETF for your portfolio this week. My choice would be ProShares Ultra Short Technology (REW).
The cross currants of stocks, richly priced combined with a macro environment of inflation and a weak consumer hamstrung by high unemployment and anemic wage growth, are creating a perfect storm for stocks to lose ground.
The only think holding us up is a very loose monetary policy.
For this week's pick I'm swapping out the short S&P 500 selection for the downside exposure to the technology sector. Stocks in that group are likely to lead the way down. If stocks do lose value this week, this fund will help you offset any losses on the long side.
I recently completed an educational series on trading stocks during earnings season. My conclusion was that stocks are overdue for a pause. Prices versus expectations are pretty well matched. In many cases the prices have exceeded expectations.
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source: http://money.msn.com/top-stocks/post.aspx?post=209654dc-d546-447f-a638-a865ef764d15
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