Wednesday, January 10, 2007

A SIMPLE WAY TO SHORT THE MARKET

Proshares Short S&P 500 (SH) is a simple and easy way to short the market. The S&P 500 includes the largest caps of the overall market. Most analysis consider the S&P 500 the proxy index for comparisons. The inverse relationship between (SH) and the S&P is very close minus a very small fee. Most short funds or ETF's require a high initial cost and some low priced discount brokers such as Share Builder will not allow shorting. But they do allow (SH) and you can invest as little as you want. A chart of (SH) combined with the S&P 500 (SPX) will show the diverging tendency. Even the small guy can hedge the market!

1 comment:

Eric B said...

Just bought some ProShares UltraShort Dow30 on Friday. Intel, Apple & IBM all beat analyst forecasts & smart money sold the news. I think this may signal the top of the market. Add on the continued inverted yield curve, stagflation, housing slump, & a dwindling chance of a rate cut... and I think these low-cost hedging instruments are looking good for everyone's portfolio.