The market put in an immediate distribution day on Friday, almost killing the confirmed rally.The NASDAQ is back below its 200-Dy MA and looks ready to mover lower.

I took a chance by holding some longs into Friday, which I closed, except one. This was EUO, which triggered on Thursday. This position helped absorb some of my losses on Friday.  EUO is an inverse Euro play (or a long dollar play). it goes up as the Euro goes down. As long as the Euro is going  down, expect lower prices in the stock market. I will be holding onto this one for now.

In looking through charts this weekend, there are bear flags galore, especially in the ETF’s. Many of the ETF’s that track foreign indexes are forming bear flag or rising wedge-like patterns, which often lead to lower prices. An example can be seen here in EWZ.

This would be a good short candidate. It can also be played using the inverse Brazil ETF,  BZQ.

One thing I don’t like about swing trading the ultra inverse ETF’s, is they can make some big swings against you. I prefer to play these intraday, and there have been some nice moves in these with the volatility in this market. Friday  I took FAZ and VXX for intraday trades , those are my favorites to watch on down days. But all of the ultra inverse ETF’s should be watched here. See this page on how I trade these.

Trade Ideas for 06/07/10:

I am going to stick to intraday trades for now. If the market does show some strength, I expect it to be short lived.



Good luck and good trading!