Alberto Costa shows how to trade SDS, a 2x inverse ETF that gains when the S&P 500 falls. He enters long when price closes above the 200-day moving average, stops below the 150-day MA, and targets resistance near $44.
2x inverse (-2x) daily exposure to the S&P 500.
Ideally below the 200-day moving average (and below the 150-day moving average).
Around $44.
Hi guys, welcome to this new video. Today I just want to give you an update after my previous video where I was describing the US market crash. If you remember I mentioned that one way that we can exploit this situation is by buying inverse ETFs. And today, sure enough, what happened? One of these inverse ETF pop up from my screener. This ETF SDS is tracking inversely the S&P 500 with two times leverage. Meaning that in theory, if SP is going up 1%, this guy is going down 2% and the other way around. So let's look at what happens here. Let's zoom in. Well here the price was going down as the S and P was going up. And then when the crash started, this ETF started to go up. And what happened yesterday, you see this red line is the 200 moving average. Okay, now we say that when the price is testing the 200 moving average, that's a good opportunity to buy, right? The uptrend is also indicated by price closing above the 200 moving average and 200 moving average flat or sloping up. And that's what happened here because the 200 moving average is up as you can see here. And there is this candle, a kind of similar to a bullish pin I would say where you see there is a long day testing the moving average, but the price is closing above. So this is quite a good bullish signal, I have to say. So what could be a strategy? Now if you are looking to opportunities for hedging your portfolio and to profit from the crash of the S and P, this could be a good entry point. Let me show you what you may do. And by the way, this is not financial advice of course. If you want to buy or sell, you need to do your homework and ask to your financial advisor. This is just for education. So what you may do, you may enter around above here. You can buy, okay. And you can place your stop loss somewhere here depending on your strategy. But basically your stop loss should be ideally below the 200 for sure. And also the 150 moving average, this green line, you may enter here and if you do so and today the S and P is going down, your order will probably be triggered because this is an inverse etf. So if the S and P keep going down, this guy will go up. And just to show you a little more. Okay, let's zoom out. If you enter here, where may you take profit? Well, usually when you buy inverse etf, you don't want to hold for very long time. It's just for hedging but since this is a clear uptrend with higher high and higher low, if you buy here, you may either put a fixed target or you may use this level. You see here. There is some kind of. Resistance around this area, so you may have a profit around 44 where you sell your position. So that's all for today. I just wanted to share this opportunity because after telling you that hedging with short ETF inverse ETF was a possible strategy, this opportunity came out. So you may consider this for hedging your portfolio. Thank you for watching. If you like this video, please subscribe so you will be updated when I publish new videos and see you next time.
