Long TZA (shorting the Russell 2000)

I often review the top 10 components of a major index or sector that seems of interest to me at the time.  In reviewing both the previously posted chart of the Russell 2000 (small cap index) as well as the top 10 components of that sector, I am adding TZA (3x short Russell 2000) as an active short here at 9.37 with targets and stops TBD.  I'm in the process of annotating the charts of the top holdings in the $RUT right now which I will post along with the TZA chart and targets asap.

For those interested, my initial final target ("initial final" sounds like a bit of an oxymoron, huh?) will be around the 13.00 level.  Initial final target means that I will probably list a few targets on trade, as I often do, with the final target somewhere around the 13.00 but could possibly extend/add additional depending on what I see once/if the markets start to correct.  Capice?

Just to clarify, since TZA is an inverse (short) etf, you would go long TZA.  However, since this is a short trade on the market, it will be added to both the Active Short Trades as well as a Short Setups category for reference.  Two other alternatives to those preferring to short the small caps using less leverage could go long TWM (2x short Russell 2k) or even RWM (1x short Russell 2k).  The longer that you expect to be in the position, typically anything more than just a couple of week, the better off you are using less (or no) leverage on the choice of your ETF as the more leveraged the ETF, the more subject it is to price decay/tracking error over time.  As for now, I plan to use TZA to short the initial move down in the $RUT, likely taking profits soon and possibly re-entering on a bounce.

Mar 22, 2013 11:30am|Categories: Completed Trades - Short, Equity Market Analysis|Tags: , |Comments Off on Long TZA (shorting the Russell 2000)