Shares of the Short S & P 500 ETF (NYSE: SH) are closing
in on a key chart point.
Chart Courtesy of StockCharts.com
As the S & P 500 approaches the 1070 area, shares of SH are
nearing their buy point near 52.63. This ETF moves the opposite
of the S & P 500 and is intended to help investors make money
when the S & P 500 falls in price.
SH has a one to one correlation to the S & P 500, meaning that it's not leveraged.
Thus a one percent drop in the index leads to roughly a 1% rise in SH. The difference
is due to fees and other trading related issues. But the bottom line is that
when SPX falls, SH rises.
The stock market is clearly in a tough position, which makes SH a good ETF to
keep an eye on and to consider owning if it meets the criteria of an investor's
trading plan.
This is an options expiration Friday, which makes life interesting due to the
potential volatility of options expiration.
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