ETF Advisers: Sell Into Market's Rally
After revisiting the November lows, the market will likely rally and take another leg down, says John Lansing, a technical analyst and founder of Trending123.com.
He projects the S&P 500 will hit 640, down 16% from its current level, by April. He sets his sights on the Dow at 6500, down 12.3%, and NASDAQ below 1100, or 29.6% south of Wednesday's level, roughly equal to the 2002 lows. Lansing bases his projections on an uptrend line on the NYSE composite index going back 40 years.
From its new April low, the S&P is likely to rally through the summer up to 1100, about 80% off its bottom, Lansing forecasts. "It will be the mother of all rallies like nobody has seen before," Lansing said. "All anybody has to do is keep their wits about them between now and April."
He recommended on Wednesday that his subscribers buy small positions in inverse ETFs, ProShares UltraShort MidCap400 (MZZ) and ProShares UltraShort QQQ (QID) and hold them just over the next couple of weeks.
"The QQQQs should start underperforming the Dow. And the small- and mid-caps have yet to take out their November lows, but they will," Lansing said.