The recent carnage done to leaders and 5 distribution days on the NASDAQ Composite has pushed the model into a sell signal.
Keep in mind quantitative easing (QE2) is still alive and well, so the market correction could be limited. Note, since March 2009, the NASDAQ Composite has not pulled back even -10% with May 2010 being the only exception when QE1 ended.
Recommended ETFs:
1-times inverse
RWM - Russell 2000 small cap 1x bear. It should approximate 1x the inverse of the Russell 2000.
PSQ - NASDAQ-100 1x bear. It tracks 1x the inverse of the NASDAQ-100.
2-times inverse
TWM - Russell 2000 small cap 2x bear.
QID - NASDAQ-100 2x bear.
3-times inverse
TZA - Russell 2000 small cap 3x bear. This should provide one of the greatest gains should the market begin a downtrend as small caps tend to be the most volatile of the major indices.
SQQQ - NASDAQ-100 3x bear.
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