These ETFs Are Signaling A SELL (DTO, TZA, FAZ)

I am no longer confident the US Dollar is going to be able to mount more than the brief 2 day counter rally we had earlier in the week.  Absolutely pathetic non-strength from the Dollar!

Call me cynical, but I cannot help but think Ben is printing money like mad to keep the stock market and all asset classes afloat another 2 weeks to get past the November 2nd elections.  The stock market should be correcting as the 40 day daily cycle has now run to day 38ish with no discernible top clearly in place.  

On another post I will show you the parallel between the current situation and the mini-crash of last April/May 2010.   I now think a mini-crash is not only likely, but also just a couple weeks away.

When the market opens in a couple hours I will sell my short oil position PowerShares DB Crude Oil Dble Short ETN (NYSE:DTO) and then be free of all positions expecting a US Dollar counter rally.  I have already sold Direxion Daily Small Cap Bear 3X Shares (NYSE:TZA) and the Direxion Daily Financial Bear 3X Shares (NYSE:FAZ) in the pre-market.  Also, the EURO has successfully penetrated the overhead resistance level at 1.40 and been holding for the past 5 hours.  This bodes ill for the US Dollar.

This first daily chart is of Direxion Daily Small Cap Bear 3X Shares (NYSE:TZA) which I sold in the pre-market for $22.30.  The True Strength Index (TSI) indicator BUY signal of a couple days ago was valid and did indeed precisely nail the beginning of the US Dollar rally/stock market correction.  However, as the indicator reading is below ZERO, any downward movement of the indicator means that price is moving lower.  And, that is the situation as it exists at this moment.  Had the TSI been above ZERO at this time, any downward movement would have had an entirely different implication.

This second daily chart is my sale of Direxion Daily Financial Bear 3X Shares (NYSE:FAZ) at $12.20 in this morning’s pre-market.  Again, the TSI gave a very timely and accurate BUY signal.  We even had some follow through that included the bullish ZERO line crossover of the indicator reading. But now we see that the indicator has fallen below ZERO yielding a SELL signal.

Written By John Townsend From The TSI Trader  (My TSI Trading record has been updated.)

Using the True Strength Index (TSI) for buy and sell stock analysis is a passion of mine. The TSI Trader will offer suggestions as to the indicator’s use and interpretation.

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