I am preparing to enter into 3x leveraged bearish ETFs to short the stock market. September and October are seasonally bearish, and I believe the stock market is likely to have a steep correction or crash after the Sept. 18 Fed pivot. The three ETFs that I am interested in are SOXS, SQQQ, and SPXS. I think SOXS has the highest risk, highest reward. SQQQ has moderate upside, and SPXS has the least upside.
SOXS seasonality is bearish next week, so the ideal entry is near the end of next week. The price is trading near a key white trendline, which was previously acting as resistance. I believe SOXS is trying to flip this white resistance level into support here. I have the green trendlines as other key support levels to monitor, and the red trendline as a key sell target.
SOXS has a moderate trend in September with 7.72% average gains. SOXS is hardly ever bearish so the seasonality isn’t very strong. However, September is one of the best performing months for SOXS.
SQQQ Has a Stronger Seasonality Trend
I feel the most comfortable with a SQQQ entry. I think SQQQ has a strong bullish seasonality trend in September, and I think there is a good amount of upside with less risk. I personally don’t want to bet against Pelosi’s NVDA calls but maybe she will close them out soon. SQQQ is trading near all time lows, I have the green lines as key support levels and the yellow trendline as the first key resistance target.
SQQQ is seasonally bearish next week, I prefer an entry sometime next week.
The seasonality trend is very bullish in September with +11% average gains.
SPXS Has a Similar Setup to SQQQ With Less ROI
SPXS is already trading near all time lows, and has a pretty similar setup as SQQQ with less returns. I have the yellow trendline as the first key resistance level to monitor on the way up. SPXS is also seasonally bearish next week so I prefer to enter next week if the price dips lower.
SPXS has a moderately bullish trend in September with 8% average gains. During presidential election years the stock market also tends to struggle in October so I will wait to re-evaluate the trade by the end of September. There might be a market crash, recession, black swan, world war, etc. so we’ll see what happens.
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