Shorting Small Caps, Long TWM/TZA

TWM (2x short Russell 2000 Index) & TZA (3x short small caps) will be added as Active Short Trades here at the bottom of this descending triangle pattern on TWM. TWM is my preferred vehicle for the second price target, T2 at 38.42 while the extra leverage on TZA would be most appropriate for those only targeting T1 (36.43 on TWM). Suggested stop on a move below 34.50.


In the video coverage of the US markets posted earlier today, I highlighted some potentially bearish developments on both the Russell 2000 ($RUT) as well as the S&P 600 ($SML) Index. Both of these small cap indices are still working higher within bearish rising wedge patterns so this is what I refer to as an anticipatory trade, meaning that I am shorting the small caps in anticipation of a breakdown, or sell signal, that has yet to occur. As such, this should be considered an aggressive, counter-trend trade. As always, DYODD and trade according to your own objectives & risk tolerance.

note: Although one would purchase, or go long, TWM or TZA, these trades are assigned to the Short Trade Setups & Active Short Trades categories as they are effectively a short on the Russell 2000 Small Cap Index.

2017-03-08T21:20:32+00:00 Apr 8, 2015 2:45pm|Categories: Completed Trades - Short|Tags: , , , |Comments Off on Shorting Small Caps, Long TWM/TZA