200301 Rethinking Equity position (Fearing Fear Post)

After doing a lot of charting over the past day, the possibility of a short term counter downtrend rally has become more likely. Things don’t fall straight down without even mild attempts of a rally and this fall off has been spectacular. Assuming the financial services folks have spend far more of their weekend trying to engineer a stabilization strategy for the market, it makes sense to expect one- however short or long lived.

The riskiest way to play a bounce is with Leveraged ETFs (3x). UPRO and TECL are candidates I’m considering. If markets in the US open with a significant bounce higher, I am going to wait until closer to 1200 to get a sense of its strength. If markets resume a downtrend, I am going to closely watch levels at 1030 to await a turn of events.