With our boy Helicopter holding court on Wednesday (the 21st), I’ve been thinking about a trade. Expectations seem fairly high for QE3, leading one to wonder if another debacle of a plan by the Fed is already baked in. If so, then we have the makings for a nice sell the news trade…possibly using the NASDAQ. Ideally, the market holds steady or moves up today and Tuesday allowing for a better entry into QID, which theoretically provides 2X the inverse of the NASDAQ (for example…lots of different ways to play this).
This is still a thought in progress, but the backdrop along with the chart are definitely interesting. Speaking of the chart, check out the 2600 level (currently at 2622) on the chart below:
I have already taken a position on QID and may simply let that stay on. As always, this should NOT be taken as a recommendation…think for yourself and do your own homework. If QE3 is beyond expectations, this idea would turn out bad. It may be interesting to simply watch it unfold from the sidelines.
TD
Z Koolaid 