Dented Armor: It Might Be Time For These Inverse ETFs (DZZ, TZA, INDZ)

Memo to ESPN: Now that's how you make a reference with "armor" in it without offending an entire ethnic group. Fun at Mickey Mouse's expense aside, it's hard to not get the feeling today that this rally may be a little tired. We're not saying a new bear market is upon us, but there are some clues a pullback may be afoot. For example, the iShares Russell 2000 Index Fund

is down almost 1% today, more than quadruple the loss for the SPDR S&P 500

. Gold and silver are getting destroyed. Those are just a couple of examples. What's clear is that it may be time to consider some risk. Risk with leveraged and inverse ETFs that is.

Remember what we just said about IWM and SPY? That's why TZA merits consideration right now. This is thing about TZA: It is not for the faint of heart and if one cannot have strong conviction about being involved with this ETF, then one best stay away because in the 10 seconds it takes to type 10 words, TZA could move 10, 20 cents or more. You've been warned.

The Direxion Daily India Bear 3X Shares is another case of a risky leveraged ETF that might be worth a look because of signals being flashed from the land of small-caps. In this case we're talking about ETFs like the Market Vectors India Small-Cap ETF

, which have been on fire to start 2012, but have also weakened some in recent days. This isn't a proclamation that India ETFs are going to go in the tank for the rest of the year, but nothing moves up in a straight line and plenty of India funds are overbought. INDZ

on long India positions.

Unfortunately for the Nasdaq, Apple

does not yet account for 100% of the index. That means there's still a chance Apple can go up, but the index can go down. Or to make matters worse, Apple can pullback, meaning the chances of the Nasdaq going up are slim and none. The ProShares UltraShort QQQ is great tool for hedging a long position in Apple or an ETF that's

.

It's not so much a matter of being long-term bearish on crude as it is looking at the chart of the United States Brent Oil Fund

and discovering oil is overbought here and BNO is primed for a decline in the near-term. It may not be deep or last more than a few days and be advised that DTO is more tied to WTI than Brent, but a pullback is a pullback and that means DTO has some value here.

Obviously, Wednesday is one of those days where one wishes he could go back to Tuesday to back up the bus on the PowerShares DB Gold Double Short ETN because DZZ is up over 11% in late trading. Usually, a leveraged ETF or ETN with a price tag as low as DZZ's will be subject to a reverse split, but we haven't heard anything to that effect regarding DZZ. In other words, traders can hedge long positions in ETFs like the SPDR Gold Shares

and iShares Gold Trust

for less than $5 with DZZ.