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Oversold List Shows Market at Tipping Point

TZA Chart TZA data by YCharts

Direxion Daily Small Cap Bear 3X (TZA) AKA "Taz"

Background: Direxion Daily Small Cap Bear 3X trades an average of 20 million shares per day.

52-Week Low: $13.35

Taz is the final leveraged ETF with sirens blaring on my computer. It is based on a theoretical leveraged index of small capitalization companies. Beyond learning that the shares are oversold, keep in mind that they don't have to correlate (inversely) on any given day to the underlying stocks. The underlying index basket is the Russell 2000.

The weekly chart based on my indicators (hat tip again to Tom DeMark) is an aggressively long buy signal. The daily chart, the chart that I use to time entries based on weekly signals, is slightly oversold and near very oversold (within a few days).

What does this mean to me? The chart suggests to me that I should anticipate a pullback in the aggressive move higher by small cap stocks.

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SYM TRADE IT LAST %CHG
SDS $21.00 2.24%
FAZ $12.41 3.94%
TZA $10.04 4.69%
SPY $207.95 -1.15%
IWM $124.43 -1.62%

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DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
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