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I will start off with an “IF!” IF the dollar is at a low and rallies, what usually happens? Stocks and Commodities often struggle (see “Good, Bad & Ugly post).
What ETF is a combination of a stock and a commodity? Basic Materials ETF (IYM)!!! Base Materials are at resistance (See “Heavy Metal” post). So if the Dollar rallies and basic materials are at resistance, Dow at resistance as well (see “Home on the Trading range” post) how can we take advantage of this situation?
How about an INVERSE BASIC MATERIALS ETF!!!
Patterns suggest two things…..Grrrrrrrrrrrrrreat potential is at hand & this is for AGGRESSIVE investors ONLY! Hence …….Grrrr……ressive!
Game Plan… BUY SMN (200% inverse basic materials ETF) with an 8% stop. (this is an initial stop, I will update)
As I shared, this is AGGRESSIVE!!! This would be for a small portion of a portfolio only!
Relative strength has PAID OFF on some of my past suggestions (see post here) I suspect this could be another! It is very early in this idea…yet the 500 index is off about 1% this morning and IYM is down over TWICE as much!
Is that a “Tiger’s Tail” Mike or “look at the wick on that puppy???
Not the end of the day yet, but look at the long tail on XME.