TZA - battling higher

With the weekly trends on the main indexes continuing to trend lower, the 3x short ETFs are starting to shine. Direxion's 3x 'small cap bear' (TZA) is approaching the next key level.


TZA, daily

IWM, weekly

Summary

The near term trend for TZA is most certainly higher. Bears should be seeking a daily close in the 17s, and a test of the August high of $20. That is 25% higher though.- and thus requires IWM to decline by around 8% in the coming days to the 75 level.

Frankly, 8% does seem a bit much, even if the market gets spooked by the resulting carnage of Hurricane Sandy.

Yet, the market indexes are weak, and as I stated over the weekend, the lower bollinger would be a very natural target in the current wave lower.

*IWM @ 75, would roughly equate to sp'1325, and dow 12500, to be hit within the next 6 trading days (assuming we open Wednesday Oct'31).

--
As with all the leveraged ETFs, decay is a real problem across multiple weeks (sometimes even days), and stops (even loose ones) are usually a very good thing!