ProShares UltraShort Financials
Click to Enlarge Typically, relative strength-leading sectors can turn into the rapidly declining groups as overly excited buyers turn tail and sell. The financial sector — as represented by the Financial SPDR (XLF) — has garnered a lot of buying lately as investors posture for a long-term bull run on the group.
Remembering that what goes up fast can come down fast, too, we like the idea of hedging potential market weakness with a hedge on financials.
The ProShares UltraShort Financials (SKF) allows you to profit from a decline in the financials, as this fund should appreciate about 2% for every 1% decline in the XLF.
A move to the $22 level appears likely for SKF over the next four to six weeks.