• Subscribe
  • Log In
  • Home
  • Daily Diary
  • Asset Class
    • U.S. Equity
    • Fixed Income
    • Global Equity
    • Commodities
    • Currencies
  • Sector
    • Basic Materials
    • Consumer Discretionary
    • Consumer Staples
    • Energy
    • Financial Services
    • Healthcare
    • Industrials
    • Real Estate
    • Technology
    • Telecom Services
    • Transportation
    • Utilities
  • Latest
    • Articles
    • Video
    • Columnist Conversations
    • Best Ideas
    • Stock of the Day
  • Street Notes
  • Authors
    • Bruce Kamich
    • Doug Kass
    • Jim "Rev Shark" DePorre
    • Helene Meisler
    • Jonathan Heller
    • - See All -
  • Options
  • RMPIA
  • Switch Product
    • Action Alerts PLUS
    • Quant Ratings
    • Real Money
    • Real Money Pro
    • Retirement
    • Stocks Under $10
    • TheStreet
    • Top Stocks
    • Trifecta Stocks
  1. Home
  2. / Investing
  3. / ETFs

Adding Back Small-Cap Index Shorts on This Weakness

This reaction today is worrisome, but there isn't any major shift in market character yet.
By JAMES "REV SHARK" DEPORRE
Apr 28, 2017 | 11:43 AM EDT
Stocks quotes in this article: GOOGL, INTC, TZA

Earlier this week, market players were looking for a "sell the news" reaction to the announcement of President Trump's tax policies. That didn't happen, probably in part because it was so anticipated.

This morning we are seeing a "sell the news" reaction by the broader market to the very impressive earnings reports from Action Alerts PLUS holding Alphabet (GOOGL) and Amazon (GOOGL) . The big difference is that this sort of reaction wasn't anticipated. Both GOOGL and AMZN are trading up sharply, but the indices are struggling -- with small-caps, in particular, being weak.

This sort of reversal on good news is notable. It is not unusual for a reaction to earnings from a major stock to be the catalyst for a turning point. I recall quite clearly on Intel (INTC)  that earnings in 2009 were the catalyst for a major uptrend.

Despite Amazon and Alphabet, breadth is running nearly 2-to-1 negative and the number of new 12-month lows has fallen to around 400. I asked this morning whether Amazon and Alphabet could provide leadership, and the answer at this point is no.

I've added back some small-cap index shorts in the form of the Direxion Daily Small Cap Bear 3X ETF (TZA) , but haven't done much selling at this point. This reaction today is worrisome, but there isn't any major shift in market character yet.

Don't forget we will likely hear quite a bit next week about the old saying "sell in May and go away." Seasonality has not worked well in recent years, but I'm sure the bears will be happy to remind us of the possibility.

Get an email alert each time I write an article for Real Money. Click the "+Follow" next to my byline to this article.

At the time of publication, Rev Shark was long TZA, although positions may change at any time.

TAGS: Investing | U.S. Equity | ETFs | Funds | Earnings | Markets | Risk Management | Short-selling | Stocks

More from ETFs

Want a Break from Chip Stock Ugliness? Check Out This Biotech ETF and Stock

Bob Byrne
Jul 5, 2022 8:30 AM EDT

The SPDR S&P Biotech ETF is one of the better-looking charts on this trader's screen, as is an individual biotech name.

A Few Thoughts on How to Approach a Tougher Bear Market Than Most

Bob Byrne
Jul 1, 2022 8:30 AM EDT

A key goal is to keep from losing money while the current bear runs its course, and don't count on positive seasonality leading to the Fourth of July.

Welcome Break, Sellers at the Ready, Defense on Offense, GDP Sags, Yield Watch

Stephen Guilfoyle
Jul 1, 2022 7:20 AM EDT

Plus, disappointing personal spending figures and an explanation of how the Fed views inflation (hint: it isn't how you view it).

This ETF Boasts 'Inflation Protection,' but Will It Rise to the Occasion?

Mark Abssy
Jun 30, 2022 3:26 PM EDT

The Ionic Inflation Protection exchange-traded fund, the latest such ETF to hit the market, offers direct exposure to the consumer price index.

Zero-Covid? NATO's China Challenge, Quarter-End Volume, Yields, Trading Chevron

Stephen Guilfoyle
Jun 28, 2022 7:23 AM EDT

There was a time when Covid vaccine news was headline material. Not now, though, and this news could matter.

Real Money's message boards are strictly for the open exchange of investment ideas among registered users. Any discussions or subjects off that topic or that do not promote this goal will be removed at the discretion of the site's moderators. Abusive, insensitive or threatening comments will not be tolerated and will be deleted. Thank you for your cooperation. If you have questions, please contact us here.

Email

CANCEL
SUBMIT

Email sent

Thank you, your email to has been sent successfully.

DONE

Oops!

We're sorry. There was a problem trying to send your email to .
Please contact customer support to let us know.

DONE

Please Join or Log In to Email Our Authors.

Email Real Money's Wall Street Pros for further analysis and insight

Already a Subscriber? Login

Columnist Conversation

  • 07:34 AM EDT PAUL PRICE

    A $525,000 Vote of Confidence on Macerich (MAC)

  • 09:49 AM EDT JAMES "REV SHARK" DEPORRE

    This Weekend on Real Money

    Stop Wishing, Hoping, and Praying and Take Control...
  • 07:59 PM EDT PAUL PRICE

    Very Good Quarterly Numbers From Bassett Furniture (BSET)

    Bassett Furniture blew right through analysts es...
  • See More

COLUMNIST TWEETS

  • A Twitter List by realmoney
About Privacy Terms of Use

© 1996-2022 TheStreet, Inc., 225 Liberty Street, 27th Floor, New York, NY 10281

Need Help? Contact Customer Service

Except as otherwise indicated, quotes are delayed. Quotes delayed at least 20 minutes for all exchanges. Market Data & Company fundamental data provided by FactSet. Earnings and ratings provided by Zacks. Mutual fund data provided by Valueline. ETF data provided by Lipper. Powered and implemented by FactSet Digital Solutions Group.

TheStreet Ratings updates stock ratings daily. However, if no rating change occurs, the data on this page does not update. The data does update after 90 days if no rating change occurs within that time period.

FactSet calculates the Market Cap for the basic symbol to include common shares only. Year-to-date mutual fund returns are calculated on a monthly basis by Value Line and posted mid-month.

Compare Brokers

Please Join or Log In to manage and receive alerts.

Follow Real Money's Wall Street Pros to receive real-time investing alerts

Already a Subscriber? Login