Are you thinking of buying a contra ETF to protect or hedge your long position?


I looked up some of the contra ETFs. SH (contra S&P500) came to my notice.

1, 2) It is just below the weekly and daily Watermark support. If price can close above them, that will create a false downside breakout and that may be a low-risk buying opportunity.

3) SH has Memory support nearby - that will keep the stop-loss narrow.

4) Interesting, the recent Pressures have only been on the bullish side.

5) It is at price-extreme low. Though SPY is not at price extreme high (SPY chart not included here). That might be a case for buying SH than shorting SPY (or buying Call on SH than buying Put on SPY?).

6) When you look at SH using the CUE Volatility chart, you can see that it is at extremely low volatility. That would support buying Call. And it is inside a CUE Squeeze as well. If it comes out of the squeeze, then that may give an attractive reward-risk-ratio trade.

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Six days ago I was considering buying the contra-ETF $SH if it created a false-downside-breakout and closed above the Watermark support in weekly and daily.

That has not happened - the Watermark level (1) was never regained. Instead, SH fell down (2). There is a Memory resistance (3). I may not consider buying SH until that Memory resistance is broken.

I may take out SH from my daily tracking list. That may be the right CUE thing to do when an anticipated trade setup does not materialize in size days.

If SH breakout out of the Memory resistance in the coming days, it will show up on CUE scans and alert the traders.

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Disclaimer: This site is for educational purposes only, explaining the use of CUE systems and techniques. It is not for trade advice. Trading involves risk. You and only you are solely responsible for the outcome of your trades.

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