Not Too Late to Hedge With Inverse ETFs

This column was originally published on RealMoney on March 7 at 2 p.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

On Monday, my indicators were confirming an intermediate-term downtrend in the market. The market looked very oversold and due for a sharp bounce sometime this week.

That bounce appeared big-time on Tuesday, fueled by a heavy amount of short-covering. The action was a classic sign of traders getting caught in a short squeeze when the market gaps higher in the morning. When the market didn't pull back in the afternoon and continued to go higher, it forced traders to buy back the stocks they shorted to prevent giving back all of their gains. ...