Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

There Are Downside Opportunities Everywhere – Watch These Symbols

By Chris VermeulenMarket OverviewApr 14, 2020 02:09PM ET
www.investing.com/analysis/there-are-downside-opportunities-everywhere--watch-these-symbols-200521587/
There Are Downside Opportunities Everywhere – Watch These Symbols
By Chris Vermeulen   |  Apr 14, 2020 02:09PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

As the global markets enter the Q1 earnings season where a host of new data and expectations will flood the markets over the next 30+ days, skilled traders should put these three symbols on their watch-
list over the next few days and weeks.

We've been writing about how we believe the downside risks within the U.S. and global stock markets are still very real. Many industry analysts believe the bottom has set up in the U.S. stock market already. We don't believe this is the case. Our Adaptive Fibonacci Price Modeling system continues to suggest a deeper downside move is in the works and we believe this potential retest of recent lows will
setup another incredible opportunity for skilled traders.

Recently, we've posted a number of research articles to help you understand what is really taking place in the global markets. The COVID-19 virus has set-off a consumer demand contraction event that will
ripple across all sectors of the global economy. There is no other way to interpret the data right now – if consumers don't come back into the economy at levels near the late 2019 engagement levels, then the global economy will continue to contract. Consumers make up more than 85% of GDP values.

Here are some of our most recent articles to assist you:

April 2, 2020: Stocks Have Entered a 25-35 Year Crisis Cycle Re-Evaluation Event

March 30, 2020: The Recent Selloff Structure Explained

March 28, 2020: Are Silver & Gold Mirroring 1999 to 2011 Again?

Now, onto the three symbols setting up an incredible upside opportunity if the global markets rotate lower as our predictive modelling is suggesting:

FAZ – Direxion Daily Financial Bear 3X Shares (NYSE:FAZ) Sector ETF

The first symbol is FAZ. This ETF moves higher as the financial sector stocks move lower. These include banks, financial institutions, and other financial services companies. The reason we believe FAZ has a potential to move higher is that we believe the lack of consumer engagement in retail, restaurants, leisure shopping and other types of normal spending activities will put incredible pressure on business loans, consumer loans, commercial and residential real estate, business credit lines and many other aspects of the financial sector. Simply put, it would be foolish to think that some level of
default and/or extended risks would not come from any type of consumer disengagement from the economy.

Again, consumers make up over 85% of the total GDP levels. If we take away even 20% to 30% of these consumers, we could see a dramatic collapse in certain sectors of the economy. Thus, we believe the Financial sector is poised for another downside price move, which will prompt a
rise in FAZ from current levels to near $50~$60. This represents 65% to 85%+ upside potential.

MZZ – ProShares UltraShort MidCap400 (NYSE:MZZ)

The MidCap sector is uniquely vulnerable to any economic contraction related to consumer activity. Many of the Midcap companies are uniquely consumer-based and/or consumer sector related. Thus,
should another market downtrend attempt to retest recent lows or attempt to set up a deeper price bottom, the Midcap 400 ETF may see an incredible upside price move. Upside price targets are near
$29 to $30 – which is 55% to 65% higher than the current price level. Ultimately, any deeper price lows set up because of a deeper price bottom setting up in the U.S. and global markets could push MZZ
well above $35.

QID – ProShares UltraShort QQQ (NYSE:QID) ETF

The last symbol we believe could see a big upside move related to increased future risk in the U.S. and global markets is QID – the NASDAQ Inverted ETF. The reason we believe risks in the U.S. and global major markets may bleed over into this ETF is that the NASDAQ has been a major component of U.S. and foreign investment over the past 24+ months. Global investors continue to believe that technology firms will outperform the general market – thus, more capital has poured into this sector of the market over the past 20+ months than many other sectors.

This capital influx also creates an opportunity for contrarian traders if the markets fail to recover – as many people believe will happen. This capital that has recently poured into the NASDAQ may become
“at-risk” if another deeper downside price move takes place. Investors may have hard stops in place and forced selling may take place if the markets attempt to establish a deeper price bottom in the near
future.

Conservatively, an upside price move in QID to levels near $27 (45%) is the first Fibonacci target.

Further upside target levels near $30.50, $42.50 and $44.25 also exist. Of course, these higher target levels would be the result of a much deeper global market collapse where a deeper bottom in price is
established.

Concluding Thoughts:

We believe these three symbols present very real opportunities for skilled technical traders. Wait for the right setup and confirmation before jumping into these trades. If the U.S. and global markets begin to
move lower on poor earnings or economic data, jump over to these charts to see how they are reacting to price weakness. There is a very real opportunity for 20~40+% profits in each of these charts with
the right setup in place.

There Are Downside Opportunities Everywhere – Watch These Symbols
 

Related Articles

There Are Downside Opportunities Everywhere – Watch These Symbols

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (4)
Chris Sundo
Chris Sundo Apr 14, 2020 9:58PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Wish you wouldn't hide behind the anonymous 'we' facade.  You always come out for the bearish events as if you had difficulty leaving the bear bottom behind .. attachment issues, I guess.
Canis Lupus
Canis_lupus Apr 14, 2020 3:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Except I doubt the market will move lower on poor earnings or economic data. At least not until Q4. But, by then it will be all about a presidential election and this will all be an event in history. 16 million jobs were list in 3 weeks. The market could care less. Why would it start to care now?
Daniel Cohen
Daniel Cohen Apr 14, 2020 3:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Couldnt agree more, we will be making it 21-22million on thursday. But hey who cares? Ask the people you know ask them how many friends and family they have not making money right now. Then you’ll see this is a smoke and mirrors show on the back of our dollar. Remember when a can of coke was $.50? It will be $5 soon.
Luis Angulo
Luis Angulo Apr 14, 2020 3:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Uncertainty... The word that defines it
travert xavier
travert xavier Apr 14, 2020 2:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Short equity, long gold and silver, sounds good,
James Pattison
James Pattison Apr 14, 2020 2:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Intertemporals show deflation short term and inflation long term setting up
Peter Trade
Peter Trade Apr 14, 2020 2:14PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
James Pattison  Agree - Could harm silver and gold short term too
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email