ProShares UltraShort Financials (ARCA: SKF)

Latest news for ProShares UltraShort Financials (ARCA:SKF)

The Fund invests in financial instruments that ProShare Advisors believes, in combination, should produce daily returns consistent with the Daily Target. The Index is constructed and maintained by S&P Dow Jones Indices LLC. The Index represents the financials sector of the S&P 500 Index (S&P 500). The Index is one of eleven S&P Select Sector Indices (the Select Sector Indices), each designed to measure the performance of a sector of the S&P 500. Sectors are assigned using the Global Industry Classification Standard (GICS), which classifies securities primarily based on revenues. The Index includes equity securities of companies from the following GICS industries: banks; financial services; consumer finance; capital markets; mortgage real estate investment trusts (REITS); and insurance.

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ETFs to Watch August 27, 2013 (BOND, OIH, XLP)

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ETFs to Watch August 26, 2013 (EWY, JNK, SKF)

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ProShares ETFs REK, REW, SKF Trading Thursday Following Effect of 1:2 Reverse Stock Split; DUG, DXD, SBM, SDS, SQQQ, SRTY Trading Foll0owing Effect of 1:5 Reverse Stock Split

With Friday's declines, major U.S. indices are close to giving back all of their post-Federal Reserve gains that were accrued Wednesday. 

Weakness in U.S. stocks after the Fed-induced, no tapering surge is not surprising. History shows that equities often hit a rough patch in the weeks immediately following a big Fed day and Wednesday certainly qualifies as that.

	Related: <a href="http://www.benzinga.com/markets/bonds/13/09/3927740/no-post-fed-party-for-insurance-etfs">No Post-Fed Party For Insurance ETFs</a>.

	Possibly making the near-term forecast for stocks all the more gloomy is October is right around the corner and the tenth month of the year is mediocre at best for the bulls. It is actually the worst month for the Russell 2000 and the fourth-worst month for the Nasdaq Composite. With October near and enthusiasm for the no tapering rally all but gone, traders may want to consider the following ETFs.

	Direxion Daily Gold Miners Bear 3X Shares (NYSE: <a class="ticker" href="/stock/dust#NYSE">DUST</a>) 
	DUST has <a href="http://www.benzinga.com/markets/bonds/13/06/3713815/common-themes-among-q2s-best-etfs">been a champion for much of this year</a> as gold's bull market appears to be ending. Yes, the yellow metal got some help from the Fed Wednesday, but in indication of just how week the miners are, DUST is following up a strong showing Thursday with a Friday gain of almost 19 percent at this writing.

	DUST's bullish outlook is confirmed by the fact that even when it rallied last month, the Market Vectors Gold Miners (NYSE: <a class="ticker" href="/stock/gdx#NYSE">GDX</a>) was never able to <a href="http://www.finviz.com/quote.ashx?t=gdx&amp;ty=c&amp;ta=1&amp;p=d">to crack critical resistance at $31</a>.

	Direxion Daily Energy Bear 3X Shares (NYSE: <a class="ticker" href="/stock/ery#NYSE">ERY</a>) 
	Talk about a post-Fed dud: The U.S. Oil Fund (NYSE: <a class="ticker" href="/stock/uso#NYSE">USO</a>) is on pace to finish the week with a loss of about 1.5 percent. Bolstering the case for the Direxion Daily Energy Bear 3X Shares is the fact that September is usually a good time to short oil stocks, but that has not been the case this month as the Energy Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xle#NYSE">XLE</a>) was up 3.6 percent heading into Friday's trading session.

	With Syria concerns all but extinct for the moment, a disappointing no tapering performance and seasonal trends at play, the energy sector is not a screaming buy at the moment. Perhaps the Direxion Daily Energy Bear 3X Shares is for adventurous traders.

	ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) 
	SKF has an ugly chart, as do many leveraged bearish ETFs this year, but this fund <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/08/3843217/two-leveraged-etfs-for-rapid-near-term-gains">has had some moments in the sun</a>.

	There is risk with SKF because it is possible that large-cap banks will respond positively to falling interest rates, if that scenario occurs. However, there are reasons to believe SKF can go higher in the near-term. The fund is the double-leveraged, bearish answer to the iShares U.S. Financials ETF (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>).

	IYF has a six percent weight to J.P. Morgan Chase (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>), a company that generates more bad news than good these days. Additionally, IYF's exposure to regional banks and life insurance providers, albeit slight, is not a favorable trait if 10-year Treasury yields do decline in earnest.

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Here is the ETF Professor's ETF Watch List for Tuesday, August 27, 2013.

The ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) could be ready for new highs.

The Consumer Staples Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>) looks like it's in trouble.

Check in with the Market Vectors Oil Services ETF (NYSE: <a class="ticker" href="/stock/oih#NYSE">OIH</a>).

Emerging markets plays of the day: ProShares UltraShort FTSE China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>), iShares MSCI Taiwan ETF (NYSE: <a class="ticker" href="/stock/ewt#NYSE">EWT</a>) and the Market Vectors Poland ETF (NYSE: <a class="ticker" href="/stock/plnd#NYSE">PLND</a>).

Forex play of the day: CurrencyShares Australian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>).

Bond play of the day: PIMCO Total Return ETF (NYSE: <a class="ticker" href="/stock/bond#NYSE">BOND</a>).

Here is the ETF Professor's ETF Watch List for Monday, August 26, 2013.

The Market Vectors Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdx#NYSE">GDX</a>) will be in play as always.

The ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) will be worth a trade.

The iShares Silver Trust (NYSE: <a class="ticker" href="/stock/slv#NYSE">SLV</a>) looks strong.

So does the iShares MSCI Spain ETF (NYSE: <a class="ticker" href="/stock/ewp#NYSE">EWP</a>).

Emerging markets plays of the day: WisdomTree Middle East Dividend ETF (NASDAQ: <a class="ticker" href="/stock/gulf#NASDAQ">GULF</a>), iShares China Large-Cap ETF (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) and the iShares MSCI South Korea Capped ETF (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>).

Forex play of the day: CurrencyShares British Pound Trust (NYSE: <a class="ticker" href="/stock/fxb#NYSE">FXB</a>).

Bond play of the day: SPDR Barclays Capital High Yield Bond ETF (NYSE: <a class="ticker" href="/stock/jnk#NYSE">JNK</a>).

Here is the ETF Professor's ETF Watch List for Wednesday, August 21, 2013.

The ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) should be in play.

Give the PowerShares Buyback Achievers ETF (NYSE: <a class="ticker" href="/stock/pkw#NYSE">PKW</a>) a look.

Play some defense with the Consumer Staples Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlp#NYSE">XLP</a>).

Emerging markets plays of the day: iShares MSCI Capped Brazil ETF (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>), Market Vectors Indonesia ETF (NYSE: <a class="ticker" href="/stock/idx#NYSE">IDX</a>) and the iShares MSCI Emerging Markets ETF (NYSE: <a class="ticker" href="/stock/eem#NYSE">EEM</a>).

Forex play of the day: CurrencyShares Australian Dollar Trust (NYSE: <a class="ticker" href="/stock/fxa#NYSE">FXA</a>).

Bond play of the day: PowerShares Senior Loan Portfolio (NYSE: <a class="ticker" href="/stock/bkln#NYSE">BKLN</a>).

BKLN

ETFs to Watch August 21, 2013 (BKLN, EWZ, XLP)

August is living up to its reputation as a tough month in which to be long stocks.

	With Thursday's 1.4 percent tumble, the S&amp;P 500 is down more than three percent since the start of the month and nearly two percent in just the past five sessions.

	Related: <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/07/3796342/seasonal-trends-three-etfs-to-own-in-august">Seasonal Trends: Three ETFs to Own in August</a>.

	Eager bulls may find some comfort in knowing that August is half over, but they would do well to not get too cozy. In terms of performance, September is nothing to write home about. In fact, September is the worst month of the year for the S&amp;P 500, Dow Jones Industrial Average and the Nasdaq Composite, <a href="http://www.stocktradersalmanac.com/sta/home.do">according to the Stock Trader's Almanac</a>.

	Fortunately, there are a few leveraged ETFs investors can use over the coming weeks for rapid, and yes, large potential gains. The following duo looks especially promising.

	Direxion Daily Gold Miners Bull 3X Shares (NYSE: <a class="ticker" href="/stock/nugt#NYSE">NUGT</a>) 
	No, that is not an error on your monitor. The Direxion Daily Gold Miners Bull 3X Shares is really up more than 55 percent in just the past five days. NUGT is being reverse split 1-for-10 <a href="http://www.benzinga.com/news/13/07/3779977/direxion-announces-forward-reverse-splits-on-9-etfs">on August 20</a>.

	If the ETF keeps its current pace up, it could be trading at $140, $150 or higher after the split. Reason to consider: The Market Vectors Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdx#NYSE">GDX</a>), the ETF NUGT is the triple-leveraged equivalent of, is not only soaring itself, but has also broken through important technical resistance that should encourage fresh buying. GDX could easily run another $5 before seeing its next legitimate resistance area.

	ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) 
	Financial services has been of the year's top-performing sectors. So strong have been banks, brokers and insurance providers that the sector is close to toppling technology for the <a href="http://www.benzinga.com/trading-ideas/long-ideas/13/07/3792951/spy-banks-could-be-boss-again">largest sector weight in the S&amp;P 500</a>.

	The sector's previous success could make it ripe for a pullback and some recent, negative headlines pertaining to J.P. Morgan Chase (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>), one of the largest holdings in scores of bank ETFs, could prompt some near-term downside. Including SKF here is not a medium- or long-term bear call on financials, but it is hard to envision the sector remaining durable through a broader market pullback.

	SKF is close to moving above its 50-day moving average, which could stoke upside to the $24-$25 area. The fund is the double-leveraged inverse equivalent of the iShares Financial Sector ETF (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>).

	For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

	Disclosure: Author is long SKF.

NUGT

Two Leveraged ETFs For Rapid Near-Term Gains

Here is the ETF Professor's ETF Watch List for Wednesday, August 14, 2013.

Keep an eye on the iShares MSCI Japan ETF (NYSE: <a class="ticker" href="/stock/ewj#NYSE">EWJ</a>) and the iShares MSCI Hong Kong ETF (NYSE: <a class="ticker" href="/stock/ewh#NYSE">EWH</a>).

Give the Direxion Daily Gold Miners Bull 3X Shares (NYSE: <a class="ticker" href="/stock/nugt#NYSE">NUGT</a>) a look.

The ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) could be worth a trade.

Emerging markets plays of the day: iShares MSCI South Korea ETF (NYSE: <a class="ticker" href="/stock/ewy#NYSE">EWY</a>), iShares MSCI Frontier 100 Index (NYSE: <a class="ticker" href="/stock/fm#NYSE">FM</a>) and the Market Vectors Russia ETF (NYSE: <a class="ticker" href="/stock/rsx#NYSE">RSX</a>).

Forex play of the day: ProShares UltraShort Euro (NYSE: <a class="ticker" href="/stock/euo#NYSE">EUO</a>).

Bond play of the day: iShares J.P. Morgan USD Emerging Markets Bond ETF (NYSE: <a class="ticker" href="/stock/emb#NYSE">EMB</a>).

iShares JPMorgan USD Emerging Markets Bond Fund

Market Vectors Russia ETF Trust Shares of Beneficial Interest

ETFs to Watch August 14, 2013 (EMB, NUGT, RSX)

With 2012 drawing to a close in a matter of hours, it is fair to say it has been another wild, volatile and perhaps disappointing year for leveraged ETFs. 

Wild and volatile because, and this is no surprise, some of the best-performing ETFs on a percentage basis this year are leveraged funds. 

Disappointing because many leveraged funds continue to confound investors that hold these products for extended time frames. For example, the iShares Dow Jones U.S. Financial Sector Index Fund (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>), not a leveraged ETF, is up 22.6 percent this year. Presumably, that means the ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>), the double-leveraged inverse equivalent of IYF, is down 45.2 percent, right?

Wrong. SKF is off "just" 42 percent, which may be a slight disappointment for those that had fortitude to short that product in January and ride that short all year. To be sure, that strategy should not be employed by all investors. However, use of leveraged ETFs as short-term trades , not long-term investments, will continue to work in 2013. Here are 10 such funds to consider in the new year.

Direxion Daily Gold Miners Bear 3X Shares (NYSE: <a class="ticker" href="/stock/dust#NYSE">DUST</a>)
This list is no particular order, but if it was in order of preference, DUST might just appear in the top spot. The reason being is that gold mining stocks and ETFs <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/11/3135525/even-the-pros-struggle-with-gold-miners-etfs">continue to struggle relative to bullion</a>. Making matters worse is the fact this is becoming a long-running theme.

DUST proves the aforementioned point about the importance of not making leveraged ETFs investments. In 2012, the Market Vectors Gold Miners ETF (NYSE: <a class="ticker" href="/stock/gdx#NYSE">GDX</a>) has lost 11.6 percent, but DUST is far worse with a loss of 21.3 percent. Do things the right way and view DUST as a short-term trade and one will see this ETF has surged eight percent in the past month while GDX has tumbled 9.6 percent. 

Bullish alternative: Direxion Daily Gold Miners Bull 3X Shares (NYSE: <a class="ticker" href="/stock/nugt#NYSE">NUGT</a>).

Direxion Daily Financial Bull 3X Shares (NYSE: <a class="ticker" href="/stock/fas#NYSE">FAS</a>)
The infamous FAS has surged 78.2 percent this year. An impressive run to be sure, but investors could have done a lot better by simply buying shares of Bank of America (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>) in January and holding that stake the entire year. Dow component BofA has more than doubled this year. 

Well, that is hindsight and investors are now wondering if FAS can offer a sequel to its 2012 heroics in 2013. It is possible. Financials are slightly cheaper than the broader market as the Financial Services Select SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) has a P/E ratio below that of <a href="https://www.spdrs.com/product/fund.seam?ticker=SPY">the SPDR S&amp;P 500 (NYSE: </a><a class="ticker" href="/stock/spy#NYSE">SPY</a>).

A catalyst(s) for FAS could arrive in the first half of 2013 if regulators allow BofA and Citigroup (NYSE: <a class="ticker" href="/stock/c#NYSE">C</a>) to boost dividends and engage in much needed share repurchase programs.

Bearish alternative: Direxion Daily Financial Bear 3X Shares (NYSE: <a class="ticker" href="/stock/faz#NYSE">FAZ</a>).

ProShares UltraShort Oil &amp; Gas (NYSE: <a class="ticker" href="/stock/dug#NYSE">DUG</a>)
Here is another example of the dangers of holding a leveraged ETF over the course of a year. The index DUG is designed to deliver two times the daily inverse performance of the same index tracked by the iShares Dow Jones U.S. Energy Sector Index Fund (NYSE: <a class="ticker" href="/stock/iye#NYSE">IYE</a>). That ETF is up about 0.7 percent this year, but DUG has lost almost 15 percent. As is the case with DUST, there have been stretches of time where DUG has proven to be one of the better energy ETFs, though it is important to note those stretches do not last 10 or 12 months. 

Amid faltering production, integrated oil names could be in for another mediocre year in 2013, implying DUG is worth keeping an eye on.

Bullish alternative: ProShares Ultra Oil &amp; Gas (NYSE: <a class="ticker" href="/stock/dig#NYSE">DIG</a>).

Direxion Daily Technology 3X Bear Shares (NYSE: TECS)
It is not hyperbole to say tons of market participants are concerned about Apple (NASDAQ: <a class="ticker" href="/stock/aapl#NASDAQ">AAPL</a>). The largest U.S. company by market value traded over $700 in October, but appears destined to close the year below $530. 

Apple accounts for 17.2 percent of the Technology Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>), the ETF that tracks the same index TECS is designed to deliver three times the daily inverse performance of. When properly applied, TECS is useful either for those looking to profit from an Apple decline without having to incur the risks of shorting the stock directly, or the limitations of the options market. Additionally, since TECS trades for less than $10, those that are long Apple or XLK, can use TECS as an occasional hedge.

Bullish alternative: Direxion Daily Technology 3X Bull Shares (NYSE: TECL). 

ProShares UltraShort Yen (NYSE: <a class="ticker" href="/stock/ycs#NYSE">YCS</a>)
Of all the ETFs mentioned on this list, YCS may come with the most simple, obvious reasoning. The yen will close 2012 as the worst-performing developed market currency. Newly elected Japanese Prime Minister Shinzo Abe <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/12/3200690/play-the-japan-rally-with-these-etfs">has pledged to pressure the Bank of Japan</a> to engage in unlimited monetary easing and target two percent inflation.

At this juncture, it appears BoJ will acquiesce to Abe's demands. It is either that or risk losing its independence. 

Bullish alternative: ProShares Ultra Yen (NYSE: <a class="ticker" href="/stock/ycl#NYSE">YCL</a>).

Direxion Daily Small Cap Bull 3X Shares (NYSE: <a class="ticker" href="/stock/tna#NYSE">TNA</a>)
Small-caps have held up quite well in an environment made challenging by politicians' inability to solve the fiscal cliff. The iShares Russell 2000 Index Fund (NYSE: <a class="ticker" href="/stock/iwm#NYSE">IWM</a>) has gained 1.7 percent in the past month compared to a loss 0.8 percent for the SPDR S&amp;P 500 (NYSE: <a class="ticker" href="/stock/spy#NYSE">SPY</a>). 

That could be a promising sign regarding the chances of a January Effect, the scenario under which small-caps leader a broader market rally to start the new year. If small-caps do become a leadership group in the first quarter, then the Direxion Daily Small Cap Bull 3X Shares becomes useful as a short-term trade.

Bearish alternative: Direxion Daily Small Cap Bear 3X Shares (NYSE: <a class="ticker" href="/stock/tza#NYSE">TZA</a>).

ProShares Ultra FTSE China 25 (NYSE: <a class="ticker" href="/stock/xpp#NYSE">XPP</a>)To its credit, the ProShares Ultra FTSE China 25 has not deviated too far from double the returns of its unleveraged equivalent, that being the iShares FTSE China 25 Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>). Year-to-date, over the past six months, 90 days and 30 days, XPP has offered just over double the returns of FXI. 

That should not change the fact that leveraged ETFs are not intended to be held all year. However, with Chinese equities and plain vanilla China ETFs closing 2012 in strong fashion, XPP merits consideration for the year ahead. 

Investors should note that XPP sharply outperformed the Direxion Daily China Bull 3X ETF (NYSE: <a class="ticker" href="/stock/yinn#NYSE">YINN</a>) in 2012. The two track different indexes and that likely explains the difference. Both funds are highly risky, but if one can grab better returns with a double-leveraged ETF over a similar triple-leveraged product, that is a deal that should be taken. 

Bearish alternative: ProShares UltraShort FTSE China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>).

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

Intraday Update

AAPL

iShares Dow Jones US Energy Sector Index Fund

YINN

Leveraged ETFs For The New Year: 7 for 2013

The decision late last month to delay the introduction of new capital requirements for large banks may keep bank share prices under a cloud of uncertainty for 2013. The new rules would require banks to raise new equity capital, shrink their balance sheets or some combination of the two.

The new rules, known as Basel III, were formulated with the idea of making large banks safer following the collapse of Lehman Brothers in 2008. Basel III requires large, too-big-to fail banks all over the world to hold enough capital to find themselves for 30 days in the event of another financial crisis.

When Lehman Brothers failed in September 2008, banks stopped lending to each other in the interbank market. Because Lehman had issued a lot of debt, which was widely held by banks, no one could determine how risky a loan to any particular institution might be. Liquidity and credit dried up immediately with devastating consequences that we are still living with today.

The new rules were supposed to go into effect on January 1, 2013. However, in late November, U.S. banking authorities unilaterally decided to delay indefinitely the implementation of the new rules. According to <a href="http://www.reuters.com/article/2012/11/30/us-banks-capital-idUSBRE8AT1FA20121130">Reuters</a>, “The 19 largest U.S. banks subject to the Fed's stress testing program represented over 90 percent of the assets of internationally active U.S. banks, and three-quarters of the assets of all U.S. banks…”

Reuters continued, “The rules, which triple the amount of basic capital banks need to hold, are meant to be phased in over a six-year period starting in January 2013.”

Although the U.S. says it is still committed to implementing Basel III, there are disagreements over how to implement the rules and how to unify the rules among every country's banking system. 

Following the U.S. decision to postpone Basel III, European banks petitioned the EU Internal Market Commissioner to allow European banks to delay the implementation of Basel III as well. "We are now very troubled over the possible repercussions that the most recent statement from the US Authorities may have for the international competitiveness of Europe's banks," the European Banking Federation wrote, asking the EU to delay the new rules until January 1, 2014.

Reuters wrote, “It said EU banks were facing sweeping regulatory changes including new capital requirements and liquidity buffers, and the creation of a EU supervisory authority. ‘All the while, our U.S. competitors will not have matching obligations imposed on them in parallel, or in a foreseeable future.'"

The European Banking Federation today asked the EU for a “…review of tougher financial regulations on the eve of their adoption as the region sinks into a recession, dimming prospects of raising $621 billion in capital needed to meet the rules,” <a href="http://www.bloomberg.com/news/2012-12-09/europe-s-banks-seek-basel-impact-study-on-eve-of-implementation.html">Bloomberg</a> reported.

While, on the surface, a delay in implementing the new rules seems positive for the banks, it does introduce a new level of uncertainty for 2013. For example, the delay in implementing the new rules may not necessarily delay the deadline for meeting the new capital requirements. The might mean that banks will have only five years to adjust their balance sheets instead of six years.

Bank may also remain reluctant to lend to each other for as long as there is uncertainty over how much capital they will need to support their assets in 2013 and beyond. While this is particularly true of European banks, this uncertainty could well spill over into the U.S. market. The sooner there is clarity over how much capital the banks needs, the better. 

Investors should be concerned over the timing of introducing the new capital requirements. If banks will be forced to raise significant amounts of new equity during a recession or during a market downturn, it could prove to be a costly exercise.

On the other hand, if regulators continue to postpone the implementation of the new capital requirements, it calls into question their commitment to the rules and to the idea of international coordination of bank capital.

Generally speaking, uncertainty is bad for share prices and banks are no exception. Investors may want to consider a short position in the SPDR S&amp;P Bank ETF (NYSE: <a class="ticker" href="/stock/kbe#NYSE">KBE</a>), particularly if KBE breaks below major support around the $22.50 to $22.75 area. If banks turn weaker, buying the Pro Shares Ultra Short Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) might also make sense

Global

Banks Under Cloud in 2013

Here is the ETF Professor's ETF Watch List for Monday November 5, 2012.

The Technology Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlk#NYSE">XLK</a>) will certainly be in play.

Ahead of the election, trade the ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>).

Keep an eye on the SPDR Gold Shares (NYSE: <a class="ticker" href="/stock/gld#NYSE">GLD</a>).

Emerging markets plays of the day: iShares MSCI Brazil Index Fund (NYSE: <a class="ticker" href="/stock/ewz#NYSE">EWZ</a>), Market Vectors Russia ETF (NYSE: <a class="ticker" href="/stock/rsx#NYSE">RSX</a>) and the iShares MSCI China Index Fund (NYSE: <a class="ticker" href="/stock/mchi#NYSE">MCHI</a>).

Forex play of the day: PowerShares DB Dollar Bullish (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>).

Bond play of the day: Vanguard Total Bond Market ETF (NYSE: <a class="ticker" href="/stock/bnd#NYSE">BND</a>).

MCHI

PowerShares DB US Dollar Index Bullish Fund

ETFs to Watch November 5, 2012 (EWZ, GLD, UUP)

Believe it or not, Election Day is just six days away. With the polls showing the chances of nail-biter are growing, markets and investors are apt to remain pensive until at least next Wednesday. Hopefully, there will not be a repeat of 2000 when a clear winner did not immediately emerge after the polls closed. 

Since it became clear that Republican Mitt Romney would be President Barack Obama's challenger, analysts, experts and pundits have been attempting to figure out which sectors and stocks will perform well assuming either outcome. 

An array of predictable calls have been made. Buy energy and financial services ETFs if Romney wins, some analysts and traders have said. Bet on health care <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/09/2939541/s-p-highlights-election-etfs">and telecom funds if President Obama is reelected</a>. 

There is always a chance that any reaction by sector ETFs to the election will be short-lived. However, it does pay to be prepared. With that, here is one last run through some sector ETFs that have the potential to rally on the back of an Obama reelection.

iShares Dow Jones US Telecom Index Fund (NYSE: <a class="ticker" href="/stock/iyz#NYSE">IYZ</a>)
A solid performer for most of 2012, the iShares Dow Jones US Telecom Index Fund has fallen on hard times recently, sliding 4.3 percent in the past month. An Obama victory could be just what IYZ and rival telecom funds need to get back on track. S&amp;P Capital IQ explained why in a September research note.

"President Obama has been supportive of broadband expansion, through government subsidies, enticing carriers to build out their networks. In addition, the Federal Communications Commission's chairman has been a proponent of moving wireless spectrum from television broadcasters to telecom carriers. If Governor Romney wins, a new chairman would take over and could scuttle these efforts," the research firm said.

Guggenheim S&amp;P 00 Equal Weight Health Care ETF (NYSE: <a class="ticker" href="/stock/ryh#NYSE">RYH</a>)
How the Guggenheim S&amp;P 500 Equal Weight Health Care ETF reacts to an Obama reelection will be interesting to see. The ETF spreads about 78 percent of its weight between health care services providers, equipment makers and traditional pharmaceuticals names. In other words, this ETF has, to this point, benefited from Obamacare.

RYH's 25.6 allocation to health care equipment and supply firms could be a thorn in the ETF's side, though. Obamacare contains a tax on medical device firms that <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/03/2449787/overturn-obamacare-these-etfs-could-benefit-ibb-ihi-ihf">could lead to the loss of tens of thousands of jobs and billions of dollars of lost economic output.</a>

ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>)
When he was running for president in 2008, then Sen. Obama was the toast of Wall Street. At this point in the election cycle in 2008, major financial services firms had donated <a href="http://galesburgplanet.com/posts/19882">$14.5 million to Obama</a>. Increased regulation and a Dodd-Frank Act later and Wall Street firms have given just $5.5 million to the President this year, according to the Center for Responsive Politics. 

Mitt Romney has raised more than triple that amount of $18.3 million. Price action in the sector arguably shows <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/10/3002948/are-financials-pricing-in-a-romney-win">the candidate banks prefer</a>. Hint: It is not the incumbent. 

PowerShares Build America Bond Portfolio (NYSE: <a class="ticker" href="/stock/bab#NYSE">BAB</a>)
The PowerShares Build America Bond Portfolio, which has over $1 billion in assets under management, does not get much press as a potential winner following an Obama victory. That is odd considering Obama wants to make the Build America Bond program a permanent fixture. The program terminated two years ago.

Created as part of the American Recovery and Reinvestment Act, Build America Bonds are taxable, but the federal government pays issuers subsidy payments equal to 35 percent of their interest costs, <a href="http://www.bondbuyer.com/issues/121_194/municipal-analysts-offer-opinion-romney-obama-tax-proposals-1044723-1.html">according to the Bond Buyer</a>. 

As the Bond Buyer notes, Republicans view BABs as a relic of of the Obama stimulus program and that could endanger these bonds under a Romney Administration.

For more on politics and ETFs, click <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/10/3002948/are-financials-pricing-in-a-romney-win">here</a>.

Bonds

Politics

Events

General

iShares Dow Jones US Telecommunications Sector Index Fund

Rydex ETF Trust Rydex S&P Equal Weight Health ETF

In 7 Days, an Obama Win Could Send These ETFs Soaring

Here is the ETF Professor's ETF Watch List for Wednesday October 31, 2012.

The SPDR S&amp;P Insurance ETF (NYSE: <a class="ticker" href="/stock/kie#NYSE">KIE</a>) and the U.S. Natural Gas Fund (NYSE: <a class="ticker" href="/stock/ung#NYSE">UNG</a>) will certainly be in play.

Same goes for the PowerShares DB Crude Oil Double Short ETN (NYSE: <a class="ticker" href="/stock/dto#NYSE">DTO</a>).

Keep an eye on the ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>).

Emerging markets plays of the day: PowerShares India Portfolio (NYSE: <a class="ticker" href="/stock/pin#NYSE">PIN</a>), ProShares UltraShort Brazil (NYSE: <a class="ticker" href="/stock/bzq#NYSE">BZQ</a>) and the WisdomTree Emerging Markets Equity Income Fund (NYSE: <a class="ticker" href="/stock/dem#NYSE">DEM</a>).

Forex play of the day: PowerShares DB Dollar Bullish (NYSE: <a class="ticker" href="/stock/uup#NYSE">UUP</a>).

Bond play of the day: Vanguard Total Bond Market ETF (NYSE: <a class="ticker" href="/stock/bnd#NYSE">BND</a>).

PowerShares DB Crude Oil Double Short ETN

ETFs to Watch October 31, 2012 (DEM, SKF, UUP)

ProShares, the largest sponsor of inverse and leveraged ETFs, has filed a request with the Securities and Exchange Commission to use its own indexes for its ETFs. Maryland-based ProShares is the latest ETF sponsor to show interest in self-indexing.

Van Eck, parent company of Market Vectors, and WisdomTree (NASDAQ: <a class="ticker" href="/stock/wetf#NASDAQ">WETF</a>) currently self-index. Earlier this year, Market Vectors turned to its own indexes for the Market Vectors Coal ETF (NYSE KOL) <a href="http://www.benzinga.com/news/12/07/2750938/index-changes-coming-for-coal-gaming-etfs-bjk-kol">and the Market Vectors Gaming ETF (NYSE: </a><a class="ticker" href="/stock/bjk#NYSE">BJK</a>). Other popular Market Vectors ETFs that track firm-sponsored indexes include the Market Vectors Brazil Small-Cap ETF (NYSE: <a class="ticker" href="/stock/brf#NYSE">BRF</a>) and the Market Vectors Oil Services ETF (NYSE: <a class="ticker" href="/stock/oih#NYSE">OIH</a>).

Self-indexing can be viewed as cost-saving measure for ETF sponsors because those companies must pay fees to index providers such as MSCI (NYSE: <a class="ticker" href="/stock/msci#NYSE">MSCI</a>) and Russell Investments. Other ETF providers that have filed to self-index include iShares, the world's largest ETF provider, Northern Trust's (NASDAQ: <a class="ticker" href="/stock/ntrs#NASDAQ">NTRS</a>) FlexShares unit and Guggenheim Investments, <a href="http://www.indexuniverse.com/hot-topics/14995-proshares-looks-to-self-index-etfs.html">according to Index Universe</a>.

ProShares is the first large provider of inverse and leveraged ETFs to look to self-index. Most ProShares leveraged, or "geared," ETFs are benchmarked to the same index as their traditional counterparts. For example, the ProShares UltraShort FTSE China 25 (NYSE: <a class="ticker" href="/stock/fxp#NYSE">FXP</a>) seeks to provide twice the daily inverse returns as the FTSE China 25 Index. That is the same index the iShares FTSE China Index Fund (NYSE: <a class="ticker" href="/stock/fxi#NYSE">FXI</a>) tracks.

The ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) does the same thing with the Dow Jones U.S. Financials Index (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>). That is the same index tracked by the iShares Dow Jones U.S. Financial Sector Index Fund (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>).

ProShares had $22.4 billion in assets under management as of October 26, making it the sixth-largest U.S. ETF issuer, <a href="http://www.indexuniverse.com/sections/etf-league-tables/14956-etf-league-table-as-of-oct-26-2012.html">according to Index Universe data</a>.

For more on ETFs, click <a href="http://www.benzinga.com/etfs">here</a>.

MSCI

NTRS

WETF

ProShares Looking to Join Self-Indexing Movement

ProShares, the largest issuer of inverse and leveraged ETFs, is issuing a challenge to rival Direxion today with the introduction of two new triple-leveraged ETFs tracking the financial services sector. 

The new ProShares funds are the ProShares UltraPro Financial ETF (NYSE: <a class="ticker" href="/stock/finu#NYSE">FINU</a>) and the ProShares UltraPro Short Financials ETF (NYSE: <a class="ticker" href="/stock/finz#NYSE">FINZ</a>). Each fund features an annual expense ratio of 0.95 percent. The ProShares UltraPro Financials ETF is designed to three times the daily performance of the Dow Jones U.S. Financials Index. FINZ is designed to deliver three times the daily inverse performance of that index. 

The The iShares Dow Jones U.S. Financial Sector Index Fund (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>) is the non-leveraged ETF that tracks the Dow Jones U.S. Financials Index. 

ProShares, the sixth-largest ETF issuer, already sponsors the ProShares Short Financials (NYSE: <a class="ticker" href="/stock/sef#NYSE">SEF</a>), the ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) and the ProShares Ultra Financials (NYSE: <a class="ticker" href="/stock/uyg#NYSE">UYG</a>), all of which track the Dow Jones U.S. Financials Index. SKY and UYG are double-leveraged products.

However, the introduction of FINU and FINZ puts ProShares in direct competition with Direxion in the triple-leveraged financial services space. The Direxion Daily Financial Bear 3X Shares (NYSE: <a class="ticker" href="/stock/faz#NYSE">FAZ</a>) and the Direxion Daily Financial Bull 3X Shares (NYSE: <a class="ticker" href="/stock/fas#NYSE">FAS</a>) are two of the most heavily traded leveraged ETFs and have dominated the triple-leveraged financial services ETF space.

FAS and FAZ track the Russell 1000 Financial Services Index. Each fund charges 0.95 percent per year.

ProShares had 134 ETFs with $22.2 billion in assets under management at the end of June, according to ETF Industry Association data.

FINU

FINZ

ProShares Adds 2 Leveraged Financial Services ETFs

Wells Fargo (NYSE: <a class="ticker" href="/stock/wfc#NYSE">WFC</a>) and JP Morgan Chase (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>) help kick off the new earnings season this week when they post their first-quarter results on Friday. Citigroup (NYSE: <a class="ticker" href="/stock/c#NYSE">C</a>), Goldman Sachs (NYSE: <a class="ticker" href="/stock/gs#NYSE">GS</a>) and others follow early next week. Some analysts are looking to the financial sector for the season's best earnings reports, and so should be pleased with Well Fargo's anticipated earnings growth, but not so much with the earnings decline forecast for JP Morgan.

Here is a look at some banks whose share prices have grown between 18% and 40% since the beginning of the year. They all are trading at or near their 52-week highs as well.

Ameris Bancorp (NASDAQ: <a class="ticker" href="/stock/abcb#NASDAQ">ABCB</a>) shares are trading more than 24% higher than at the beginning of the year, despite pulling back more than 2% in the past week. The bank recently acquired Central Bank of Georgia from the FDIC after the latter bank failed. The Georgia-based Ameris has a $303.8 million market cap and a long-range EPS growth forecast of 9.0%. Over the past six months, the stock has outperformed competitors such as Capital City Bank Group (NASDAQ: <a class="ticker" href="/stock/ccbg#NASDAQ">CCBG</a>).

Banco de Chile (NYSE: <a class="ticker" href="/stock/bch#NYSE">BCH</a>) is more than 18% higher year to date but the share price has pulled back about 2% in the past week. This Santiago-based bank dramatically increased its top and bottom lines during the recession. It has a return on equity of 28.5% and a dividend yield of 3.9%. Its market cap is $13.5 billion. Short interest is 0.4% of the float. The stock has outperformed the likes of Banco Santander Chile (NYSE: <a class="ticker" href="/stock/san#NYSE">SAN</a>) and CorpBanca (NYSE: <a class="ticker" href="/stock/bca#NYSE">BCA</a>) over the past six months.

BB&amp;T (NYSE: <a class="ticker" href="/stock/bbt#NYSE">BBT</a>) shares are trading more than 23% higher year to date after pulling back more than 3% from a recent 52-week high. The Winston-Salem, N.C.-based S&amp;P 500 component just completed acquisition of Crump Group's insurance business. BB&amp;T has a market cap of $21.4 billion and a dividend yield of 2.6%. Over the past six months, the stock has outperformed competitors such as SunTrust Banks (NYSE: <a class="ticker" href="/stock/sti#NYSE">STI</a>) but narrowly underperformed Bank of America (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>).

See also: <a href="http://www.benzinga.com/trading-ideas/long-ideas/12/04/2477581/these-financial-stocks-are-on-fire">These Financial Stocks Are on Fire</a>

Citizens Republic Bancorp (NASDAQ: <a class="ticker" href="/stock/crbc#NASDAQ">CRBC</a>) is almost 39% higher than at the beginning of the year and up more than 16% just in the past month. The Flint, Mich.-based company is expected to have swung to a profit in its April 26 report. It has a market cap of $633.6 million and an EPS growth forecast of 14.4% for the next year. The stock has outperformed larger competitors such as JP Morgan Chase, U.S. Bancorp (NYSE: <a class="ticker" href="/stock/usb#NYSE">USB</a>) and Wells Fargo over the past six months.

Credicorp's (NYSE: <a class="ticker" href="/stock/bap#NYSE">BAP</a>) share price is more than 23% higher year to date and near a mulityear high. Credicorp is a Peruvian full service bank providing services to customers in Peru, Bolivia and Panama. The $10.7 billion market cap company has a long-range EPS growth forecast of 15.1%, a return on equity of 22.6% and a dividend yield of 1.7%. Over the past six months, the stock has outperformed Banco Santander (NYSE: <a class="ticker" href="/stock/std#NYSE">STD</a>) and Banco Bilbao Vizcaya Argentaria (NYSE: <a class="ticker" href="/stock/bbva#NYSE">BBVA</a>).

Washington Federal (NASDAQ: <a class="ticker" href="/stock/wafd#NASDAQ">WAFD</a>) saw its share price rise more than 19% year to date but it has plateaued in the past two weeks. The Seattle-based savings and loan announced last week it will acquire South Valley Bancorp. Washington Federal's market cap is $1.8 billion and its dividend yield is 1.9%. The price-to-book ratio is 0.9 and the PEG ratio is in line with the industry average. The stock has outperformed the likes of Northwest Bancshares (NASDAQ: <a class="ticker" href="/stock/nwbi#NASDAQ">NWBI</a>) over the past six months.

Wells Fargo's (NYSE: <a class="ticker" href="/stock/wfc#NYSE">WFC</a>) share price is up almost 22% year to date and recently hit a multiyear high. EPS are expected to be about 7% higher year over year when the bank reports Q1 results this week, but revenues are predicted to be essentially flat. The $176.4 billion market cap company has a dividend yield of 2.6%. The operating margin is better than the industry average. The stock has outperformed competitors such as Bank of America, Citigroup and JP Morgan over the past year.

See also: <a href="http://www.benzinga.com/general/hedge-funds/12/04/2478880/top-stock-picks-of-best-performing-hedge-fund-managers">Top Stock Picks of Best Performing Hedge Fund Managers</a>

<div id="action-items">ACTION ITEMS:

Bullish: Investors interested in banks with healthy dividends may want to consider the following trades: 

<ul><li>BBVA Banco Frances (NYSE: <a class="ticker" href="/stock/bfr#NYSE">BFR</a>) has a dividend yield of 19.0%.</li>
<li>CorpBanca (NYSE: <a class="ticker" href="/stock/bca#NYSE">BCA</a>) has a dividend yield of 7.5%.</li>
<li>Westpac Banking (NYSE: <a class="ticker" href="/stock/wbk#NYSE">WBK</a>) has a dividend yield of 7.1%.</li>
<li>HSBC Holdings (NYSE: <a class="ticker" href="/stock/hbc#NYSE">HBC</a>) has a dividend yield of 6.4%.</li>
</ul>Bearish: Traders may prefer to consider these alternative positions:

<ul><li>ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) is trading near a 52-week low.</li>
<li>Direxion Daily Financial Bear 3X Shares (NYSE: <a class="ticker" href="/stock/faz#NYSE">FAZ</a>) is trading near a 52-week low.</li>
</ul>Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.</div>

Dividends

ABCB

BBVA

CCBG

CRBC

NWBI

WAFD

Wells Fargo, BB&T and Other Bank Stocks on a Roll

Here's a quick look at some of the top performing financial stocks, year to date. These stocks all have a market cap of more than $500 million and all pay a dividend.

Banco Macro (NYSE: <a class="ticker" href="/stock/bma#NYSE">BMA</a>) shares are trading almost 27% higher year to date despite pulling back more than 5% in the past week. The Argentine bank has grown rapidly over the past several years, and it has a solid balance sheet. Its market cap is $1.5 billion and it has a long-term EPS growth forecast of 13.7% and a dividend yield of 8.4%. Over the past six months, the stock has outperformed regional peers such as Banco Frances (NYSE: <a class="ticker" href="/stock/bfr#NYSE">BFR</a>) and Grupo Financiero Galicia.

Bank of America (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>) is more than 30% higher than a month ago, despite falling more than 2% in the past week. The lender just announced the hiring of 51 small business bankers to offer guidance and counsel to local small business owners. The bank was founded in 1874. It has a market cap of $72.3 billion and its dividend yield is 0.6%. But the stock has underperformed the likes of Citigroup (NYSE: <a class="ticker" href="/stock/c#NYSE">C</a>) and Wells Fargo (NYSE: <a class="ticker" href="/stock/wfc#NYSE">WFC</a>) over the past six months.

See also: <a href="http://www.benzinga.com/news/12/01/2286135/is-bank-of-america-in-major-trouble">Is Bank of America in Major Trouble?</a>

Greenhill &amp; Co. (NYSE: <a class="ticker" href="/stock/ghl#NYSE">GHL</a>) is up about 28% year to date, including a more than 8% rise in the past week. The investment bank recently posted better-than-expected Q4 results due in part to surging revenues. This New York-based company has a market cap of $1. 4 billion, a dividend yield of 3.9% and a long-term EPS growth forecast of 17.0%. The stock has outperformed competitors such as Jefferies Group (NYSE: <a class="ticker" href="/stock/jef#NYSE">JEF</a>) and Morgan Stanley (NYSE: <a class="ticker" href="/stock/ms#NYSE">MS</a>) over the past six months.

Grupo Financiero Galicia (NASDAQ: <a class="ticker" href="/stock/ggal#NASDAQ">GGAL</a>) is up about 32% in the past month. This is just one of several Argentine companies on the rise since an emerging markets analyst began buying the region's stocks. Based in Buenos Aires, the holding company has a market cap of $959.6 million, a dividend yield of 0.6%, a long-term EPS growth forecast of 46.0% and a P/E ratio of 4.4. Over the past month, the stock's performance has been largely in line with peers Banco Macro and Banco Frances.

ICICI Bank (NYSE: <a class="ticker" href="/stock/ibn#NYSE">IBN</a>) shares are trading about 37% higher year to date but are still down more than 15% from a year ago. India's largest private-sector lender posted a better-than-expected jump in Q3 net profit. Its dividend yield is 1.7%, the market cap is $20.9 billion and the long-term EPS growth forecast is 19.5%. The bank is based in Mumbai and was founded in 1955. But the stock has underperformed HDFC Bank (NYSE: <a class="ticker" href="/stock/hdb#NYSE">HDB</a>) and HSBC Holdings (NYSE: <a class="ticker" href="/stock/hbc#NYSE">HBC</a>) over the past six months.

Privatebancorp (NASDAQ: <a class="ticker" href="/stock/pvtb#NASDAQ">PVTB</a>) is almost 29% higher year to date, but still down more than 7% from a year ago. The company just reported better-than-expected Q4 EPS and a sizable decrease in nonperforming loans over the past year. This regional bank is based in Chicago and has a market cap of $1.0 billion. Its dividend yield is 0.3%. Over the past six months, the stock has outperformed competitors Fifth Third Bancorp (NASDAQ: <a class="ticker" href="/stock/fitb#NASDAQ">FITB</a>) and Northern Trust (NASDAQ: <a class="ticker" href="/stock/ntrs#NASDAQ">NTRS</a>).

See also: <a href="http://www.benzinga.com/analyst-ratings/analyst-color/12/01/2287727/jefferies-says-private-bancorps-recovery-is-showing-dece">Jefferies Says Private Bancorp's Recovery Is Showing Decent Growth Prospects</a>.

Janus Capital Group (NYSE: <a class="ticker" href="/stock/jns#NYSE">JNS</a>) is more than 24% higher year to date, including more than 4% in the past week. The Denver-based asset management holding company beat low Q4 EPS expectations. It has a $1.5 billion market cap and a dividend yield of 2.5%. The P/E ratio is lower than the industry average and the operating margin is better than the industry average. The stock has outperformed competitors such as Franklin Resources (NYSE: <a class="ticker" href="/stock/ben#NYSE">BEN</a>) over the past six months.

<div id="action-items">ACTION ITEMS:

Bullish: Investors interested in exchange traded funds focused on financials might want to consider the following trades:

<ul><li>ProShares Ultra Financials (NYSE: <a class="ticker" href="/stock/uyg#NYSE">UYG</a>) is up more than 13% year to date.</li>
<li>iShares S&amp;P Global Financials (NYSE: <a class="ticker" href="/stock/ixg#NYSE">IXG</a>) is up more than 9% year to date.</li>
<li>iShares Dow Jones US Financial Services (NYSE: <a class="ticker" href="/stock/iyg#NYSE">IYG</a>) is up almost 8% year to date.</li>
<li>PowerShares Financial Preferred (NYSE: <a class="ticker" href="/stock/pgf#NYSE">PGF</a>) is up almost 8% year to date.</li>
</ul>Bearish: Traders may prefer to consider these alternative positions:

<ul><li>Direxion Daily Financial Bear 3X Shares (NYSE: <a class="ticker" href="/stock/faz#NYSE">FAZ</a>) is up more than 5% from a recent 52-week low.</li>
<li>ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) is up more than 3% from a recent 52-week low.</li>
</ul>Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.</div>

FITB

GGAL

iShares Trust S&P Global Financials Sector Index Fund

iShares Trust Dow Jones US Financial Services Index Fund

PowerShares Exchange Traded Fund Financial Preferred Portfolio

PVTB

Financial Sector Top Performers in January

News flash: Dow component J.P. Morgan Chase (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>) reports fourth-quarter <a href="http://www.benzinga.com/news/earnings/12/01/2252580/jpmorgan-chase-earnings-preview-revenue-eps-expected-to-fall">results Friday before the bell</a>. Analysts expect the bank to report a profit of 94 cents share on revenue of $23.44 billion.

Those numbers will be below what the bank reported in the fourth-quarter of 2010, shifting attention to what Jamie Dimon and friends have to say about the outlook for 2012. What's going with the investment banking business? Trading revenue? Write-downs for bad loans? And who can forget about the dividend that still languishes more than 50% below where it was before the financial crisis?

We're not saying tomorrow's report from J.P. Morgan Chase is the end all and be all of earnings season, but it should provide important clues regarding the health of the U.S. economy and the banking business overall.

Consider these ETFs beyond the Financial Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) as plays on the JPM earnings.

Market Vectors Bank and Brokerage ETF (NYSE: <a class="ticker" href="/stock/rkh#NYSE">RKH</a>)
The Market Vectors Bank and Brokerage ETF is another one of the old HOLDRs funds that made the conversion to being a Market Vectors ETF and JPM is the ETF's second-largest holding with an allocation of almost 9.9%. This is the first earnings season for the new version of RKH and a strong report from JPM could put in the ETF in position to break resistance at $78.

PowerShares KBW Bank ETF (NYSE: <a class="ticker" href="/stock/kbwb#NYSE">KBWB</a>)
Flying under the radar in terms of bank ETFs, we have the PowerShares KBW Bank ETF, which debuted last December after PowerShares opted to use some KBW indexes that were ditched by the SPDR funds. So yes, KBWB qualifies as a "new" ETF. JPM nudges Citigroup (NYSE: <a class="ticker" href="/stock/c#NYSE">C</a>) for the top spot in KBWB's lineup at almost 8.1%, but beyond JPM's earnings, consider KBWB because it has a distribution yield of 4.83%, according to the PowerShares Web site. The ETF is up almost 10% to start 2012.

iShares Morningstar Large Value Index Fund (NYSE: <a class="ticker" href="/stock/jkf#NYSE">JKF</a>)
The iShares Morningstar Large Value Index Fund isn't so much a play on JPM's earnings as it is a play on the positive sentiment that could be created with a bullish outlook from Mr. Dimon. JPM is the ETF's seventh-largest holding and financials are the ETF's second-largest sector weight, JPM is important to this ETF, but not a game-changer either way. Continued strength in U.S. larges-caps probably takes JKF to $64.

iShares Dow Jones US Financial Sector ETF (NYSE: <a class="ticker" href="/stock/iyf#NYSE">IYF</a>)
JPM is the second-largest holding in the iShares Dow Jones US Financial Sector ETF, an ETF that like XLF, has really started to show signs of life this year following a dreadful 2011. Investors should opt for XLF because it has the lower fees, but traders would be better served with IYF because it is more volatile than its SPDR counterpart. If JPM disappoints, it's critical IYF hold its 200-day moving average or the ETF could endure more near-term declines.

 

<div id="action-items">ACTION ITEMS: Bullish: Traders who believe that J.P. Morgan Chase shares are on the move higher, might want to consider the following trades: <ul><li>Long XLF or IYF. Either are suitable proxies for JPM.</li></ul><ul><li>Sell puts on JPM as an income play.</li></ul><ul><li>Buy the stock out right as potential dividend growth play.</li></ul>Bearish: Traders who believe that JPM could fall, may consider alternative positions: <ul><li>Long the ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>).</li></ul><ul><li>For more risk/reward, long the Direxion Daily Financial Bear 3X Shares (NYSE: <a class="ticker" href="/stock/faz#NYSE">FAZ</a>).</li></ul><ul><li>Short IYF.</li></ul>Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.</div>

Earnings

Technicals

Previews

Management

Reviews

iShares Morningstar Large Value Index Fund

KBWB

Will J.P. Morgan's Earnings Move These ETFs?

What a relief for shareholders of NYSE Euronext (NYSE: <a class="ticker" href="/stock/nyx#NYSE">NYX</a>). The Justice Department has cleared the way for Germany's Deutsche Boerse to <a href="http://www.benzinga.com/news/11/12/2225415/update-u-s-department-of-justice-clears-nyse-euronext-merger-with-deutsche-b-rse">acquire the operator of the New York Stock Exchange</a>. 

The DOJ has entered into a consent decree with NYSE Euronext and Deutsche Börse that allows the combination to proceed, while requiring the sale of the International Securities Exchange's (ISE) minority stake in the Direct Edge Holdings, LLC. ISE is wholly owned by Eurex, the derivatives exchange of Deutsche Börse. ISE has held its 31.54% minority stake in Direct Edge since 2008, and according to the consent decree, the parties will have at least two years from the date of closing their combination to complete this sale.

That's good news for NYX investors, but the exchange business is rife with cut-throat competition and ripe for consolidation as a result. With an eye toward 2012, let's have a look at some potential dance partners in what is likely to be another year of attempted consolidation in the securities exchange arena.

CBOE Holdings (Nasdaq: <a class="ticker" href="/stock/cboe#Nasdaq">CBOE</a>):
If 2012 does bring a spate of exchange consolidation, CBOE could be left out in the cold as the number of possible suitors for the options exchange has dwindled to one. That's the view of Macquarie, which <a href="http://www.benzinga.com/analyst-ratings/downgrades/11/12/2224355/macquarie-downgrades-cboe-holdings-to-neutral">downgraded the stock today</a>. In the view of the research, which rates CBOE Neutral with a $32 price target, the lone suitor for CBOE would be CME Group (NYSE: <a class="ticker" href="/stock/cme#NYSE">CME</a>).

CME Group:
That was a good segue to talking about the operator of the CME, CBOT, COMEX and NYMEX exchanges. Now infamous for its controversial margin hikes on various commodities in 2011, CME's $16 billion market cap makes the company more suitor than possible target. The shares are down more than 23% year-to-date and would need to rise to $270 to get out of technical danger. The stock is vulnerable on a move below $230, but it does pay a nice dividend of $5.60 a share.

Nasdaq OMX Group (NYSE: <a class="ticker" href="/stock/ndaq#NYSE">NDAQ</a>):
The operator of the Nasdaq exchange, among other boerses, was none too pleased about Deutsche Boerse moving on NYSE Euronext and it would seem Nasdaq OMX knows it needs to make another sizable purchase. The company tried to get its hands on the London Stock Exchange several years ago and it was reported earlier this year that LSE might want to bid on Nasdaq OMX. Interesting times await Nasdaq OMX in 2012. 

In a rough year for financials, the stock is up slightly and would start to look even more attractive on a move above $26.

IntercontinentalExchange (NYSE: <a class="ticker" href="/stock/ice#NYSE">ICE</a>):
IntercontinentalExchange tried to partner with Nasdaq in an $11 billion bid for NYSE Euronext, but that obviously didn't work out. There has ample speculation that ICE could be a takeover target itself. In fact, there has been speculation that a combine Deutsche Boerse-NYSE Euronext could eventually consider a move on ICE because it would need to increase its exposure to commodities trading. At the moment, it would appear that the most logical sutior(s) for ICE are based outside of the U.S.

 

<div id="action-items">ACTION ITEMS: Bullish: Traders who believe that exchange consolidation will rise might want to consider the following trades: <ul><li>Long the iShares Dow Jones US Broker-Dealers ETF (NYSE: <a class="ticker" href="/stock/iai#NYSE">IAI</a>). That ETF is home to several of the names mentioned here.</li></ul><ul><li>Long ICE. Even if the company isn't acquired, the stock has nice upside from current levels.</li></ul><ul><li>Long Nasdaq OMX. The company is attractive to any number of global buyers.</li></ul>Bearish: Traders who believe that consolidation in this sector is over  may consider alternative positions: <ul><li>Short CBOE. Only one potential partner means CBOE could be out in the cold.</li></ul><ul><li>Long the ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) as a short-term trade.</li></ul><ul><li>As a somewhat conservative play, long CME because the company doesn't need to be acquired.</li></ul>Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.</div>

Rumors

Asset Sales

Movers

CBOE

iShares Dow Jones US Broker Dealers Index Fund

NDAQ

Bid For Exchange Stocks Right Now

We recently noted that when used improperly, <a href="http://www.benzinga.com/trading-ideas/long-ideas/11/12/2210586/short-europe-etf-highlights-issues-with-leveraged-funds">leveraged ETFs can bring unpleasant surprises to investors</a>. In that case, we examined the disappointing year-to-date returns offered by the ProShares UltraShort Europe (NYSE: <a class="ticker" href="/stock/epv#NYSE">EPV</a>).

That inverse double-leveraged ETF is sharply down for the year while the Vanguard MSCI Europe ETF (NYSE: <a class="ticker" href="/stock/vgk#NYSE">VGK</a>), the fund EPV is supposed to be the bearish equivalent of, and every other long Europe ETF are also negative. 

While that example bolsters the argument that leveraged ETFs should only be used as short-term trades, not long-term investments, there are instances where leveraged ETFs have been abysmal failures over long holding periods.

Consider the following: The Financial Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>) was down more than 20% for the year at the start of trading today. Bank of America (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>) was down almost 65%. Wells Fargo (NYSE: <a class="ticker" href="/stock/wfc#NYSE">WFC</a>), JPMorgan Chase (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>) and Citigroup (NYSE: <a class="ticker" href="/stock/c#NYSE">C</a>) have all handed investors losses that go from bad (Wells) to worse (JPMorgan Chase) to borderline catastrophic (Citi).

So would it not have been an excellent idea to buy the ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>) or the Direxion Daily Financial Bear 3X Shares (NYSE: <a class="ticker" href="/stock/faz#NYSE">FAZ</a>) in January of this year and just let them marinate in your portfolio? Actually, it would have been a terrible idea in the case of FAZ and a mediocre one at best in the case of SKF, though owning SKF without mention of it being a short-term trading vehicle has been a favorite idea of some pundits.

Factoring in what looks like an 11% loss just today, FAZ will be down almost 20% year-to-date. With a one-day loss bordering on 8% today, SKF will now be up less than 3% for the year. 

In other words, SKF and FAZ have stunk up the joint as long-term investments, especially when considering one could have bought the Utilities Select Sector SPDR (NYSE: <a class="ticker" href="/stock/xlu#NYSE">XLU</a>) and captured excellent returns. That's right. A boring utilities ETF, with a yield of almost 4%, is up 14% year-to-date and that's without any of the heartburn leverage ETFs are so notorious for providing. 

Again, it's right there on the ProShares Web site and it's a reminder as to why investors should have a healthy amount of skepticism toward anyone that advocates the use of leveraged ETFs over time frames that go beyond a week or two.

"This Short ProShares ETF seeks a return that is -2x the return of an index or other benchmark (target) for a single day, as measured from one NAV calculation to the next. Due to the compounding of daily returns, ProShares' returns over periods other than one day will likely differ in amount and possibly direction from the target return for the same period."

Epic Fail Part II: Short Financial ETFs An Unpleasant Surprise In 2011

Even legends make mistakes. Legendary value investor Warren Buffett is no exception. The Oracle of Omaha was, by his own admission, lucky to eke a out profit in an old investment in US Airways (NYSE: <a class="ticker" href="/stock/lcc#NYSE">LCC</a>). He purchased shares of ConocoPhillips (NYSE: <a class="ticker" href="/stock/cop#NYSE">COP</a>) when oil was trading at record highs and is underwater on what is a relatively small part of Berkshire Hathaway's (NYSE: BRK-A, BRK-B) equity portfolio.

Those are just two examples, but the real stinker for Buffett these days is clearly Bank of America (NYSE: <a class="ticker" href="/stock/bac#NYSE">BAC</a>). With about 20 minutes to go in the trading day, Dow component BofA is trading below $5, a place the shares have not been in since early 2009. 

As the Wall Street Journal notes, Buffett is now $1.5 billion underwater on his sweetheart BofA investment that was announced earlier this summer. Put another way, $1.5 billion is nearly double the market cap of Patriot Coal (NYSE: <a class="ticker" href="/stock/pcx#NYSE">PCX</a>).

Or based on the $300 million in dividends that Berkshie gets to collect per year from BofA, if the stock didn't move at all, it would still take five years for those dividends to help Berkshire break-even. By the way, ordinary BofA shareholders are treated to a dividend of just 4 cents a share per year. So if you want to collect $300 million per year in income from the downtrodden bank like Buffett gets to, you'd have to buy something along the lines of 750 million shares.

Buffett has warrants to buy 700 million BofA shares at $7.14 a share, so even at $5, the stock would need to rise more than 40% for those warrants to be in the money.

And so much for diversifying a portfolio. Berkshire's equity stakes include eight stocks that can be considered pure play financials and that EXCLUDES BofA and General Electric (NYSE: <a class="ticker" href="/stock/ge#NYSE">GE</a>), which derives a substantial chunk of its revenue from financial services. 

Good thing Buffett's preferred holding period is "forever," as he has said in the past, because it might take that long for BofA to turn into a profitable trade for him.

 

<div id="action-items">ACTION ITEMS: Bullish: Traders who believe that Buffett is right on BofA might want to consider the following trades: <ul><li>Just buy the stock. It's almost like a no-expiration call option at this point and you'd be getting a better price than Buffett.</li></ul><ul><li>Take on many of the financials Berkshire owns with the Financial Select Secto SPDR (NYSE: <a class="ticker" href="/stock/xlf#NYSE">XLF</a>).</li></ul><ul><li>Buy JPMorgan Chase (NYSE: <a class="ticker" href="/stock/jpm#NYSE">JPM</a>), a far better choice among bank stocks.</li></ul>Bearish: Traders who believe that BofA has more problems ahead  may consider alternative positions: <ul><li>Long the ProShares UltraShort Financials (NYSE: <a class="ticker" href="/stock/skf#NYSE">SKF</a>), though only trade this ETF as a short-term play.</li></ul><ul><li>Write covered calls on existing BofA long positions. At least that's some income toward making up incurred losses.</li></ul><ul><li>Don't mess with bank stocks at all. Seriously.</li></ul>Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.</div>

Wall Street Journal

Movers & Shakers

It Might Take "Forever" For Buffett to Win On This One

<a href="https://investorplace.com">InvestorPlace - Stock Market News, Stock Advice &amp; Trading Tips</a>
While the buy-and-hold strategy makes the most intuitive sense, it&rsquo;s boring, which invariably leads curious investors down the path toward inverse ETFs. Just like any other exchange-traded fund, these bear trades represent a basket of securities under a single umbrella. However, the main difference is that when the underlying index falls, your holdings rise. Of course, the opposite is also true; hence the risks.



Still, inverse ETFs offer myriad advantages or conveniences. Some of them are as follows:



<ul><li>Convenience: You just buy the bear fund and don&rsquo;t have to worry about complex mechanisms.</li>



<li>Mitigation: You only lose what you put in which isn&rsquo;t always the case for other short trades.</li>



<li>Access: Both standard and inverse ETFs can be <a href="https://www.nerdwallet.com/article/investing/inverse-etfs#:~:text=Yes%2C%20ETFs%2C%20including%20inverse%20ETFs,the%20day%20and%20reset%20daily.">traded through a regular brokerage account</a>.</li>
</ul>At the same time, there&rsquo;s no such thing as risk-free investments. Below are some dangers to consider:



<ul><li>Compounding: Inverse ETFs undergo a daily rebalancing, forcing a short-term mentality.</li>



<li>Correlation: The inverse relationship of bear funds isn&rsquo;t always perfectly aligned.</li>



<li>Counterparty: Some inverse ETFs may use derivatives that countering parties may default on.</li>
</ul>To be sure, it&rsquo;s a risky endeavor. However, because it&rsquo;s one of the easiest ways to short the market, these inverse ETFs could see contrarian demand.



<h2>ProShares Short QQQ (PSQ)</h2>


<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/06/etf-1600-2-300x169.png" alt="Blocks that spell out ETF in front of jar with money and change."><div>Source: SHUN_J / Shutterstock</div></div>


One of the most popular inverse ETFs based on its average trading volume of 31.62 million units, ProShares Short QQQ (NYSEARCA:<a href="https://investorplace.com/stock-quotes/psq-stock-quote/">PSQ</a>) seeks daily investment results before fees and expenses that correspond to the 1X inverse of the daily performance of the Nasdaq 100 index. Of course, the technology sector has been on fire, which means that PSQ represents a clear laggard.



Since the beginning of the year, PSQ dropped almost 31% of market value. In the past five years, it slipped more than 69%, thus reinforcing the short-term nature of inverse ETFs. Remember, this is about getting in quickly and getting out with similar urgency.



Fundamentally, though, the PSQ could be intriguing because of the natural ebb and flow of the markets. Specifically, the target index began popping higher in late October, likely on <a href="https://www.cnbc.com/2023/12/05/fed-should-cut-rates-at-least-5-times-next-year-portfolio-manager-says.html">speculation that the Federal Reserve could cut interest rates next year</a>. However, if that doesn&rsquo;t pan out, the Nasdaq 100 could be due for a correction, one that you could benefit from.



<h2>Direxion Daily S&amp;P 500 Bear 1X Shares (SPDN)</h2>


<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/06/etf-1600-1-300x169.png" alt="Piggy banks with coins in them that spell out ETF."><div>Source: Maxx-Studio / Shutterstock</div></div>


Another popular example of inverse ETFs, the Direxion Daily S&amp;P 500 Bear 1X Shares (NYSEARCA:<a href="https://investorplace.com/stock-quotes/spdn-stock-quote/">SPDN</a>) features average trading volume of 7.44 million. According to its <a href="https://money.usnews.com/funds/etfs/trading-inverse-equity/direxion-daily-s-p-500-bear-1x-etf/spdn">prospectus</a>, the SPDN attempts to track 100% of the opposite of the daily performance of the S&amp;P 500 index. Notably, this fund invests at least 80% of its net assets in swap agreements, futures contracts, short positions or other financial instruments.



Stated differently, you&rsquo;ve got to watch for counterparty risk among other possible pitfalls. For now, the immediate challenge centers on the robust performance of the benchmark index. With the target index up 19% since the start of the year, it&rsquo;s a bit merciful that the SPDN is down &ldquo;only&rdquo; 15%.



Still, an argument exists that &ndash; based on the relative strength indicator (<a href="https://investorplace.com/stock-quotes/rsi-stock-quote/">RSI</a>) &ndash; the S&amp;P 500 rides in overbought territory. Yes, intense speculation surrounds the concept that the Fed may cut rates. However, inflation remains stubbornly high so I don&rsquo;t see this as a foregone conclusion. Therefore, this inverse ETF could be intriguing.



<h2>ProShares UltraShort Financials (SKF)</h2>


<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/06/etf-1600-3-300x169.png" alt="Tiles that say ETF on top of stacks of coins on a blue background"><div>Source: kenary820 / Shutterstock</div></div>


Dialing up the risk factor significantly, ProShares UltraShort Financials (NYSEARCA:<a href="https://investorplace.com/stock-quotes/skf-stock-quote/">SKF</a>) corresponds to <a href="https://money.usnews.com/funds/etfs/trading-inverse-equity/proshares-ultrashort-financials/skf">two times the inverse</a> of the daily performance of the S&amp;P Financial Select Sector Index. Because we&rsquo;re dealing with 2X leverage, the compounding effect becomes even &ldquo;worse&rdquo; when the fund rebalancing materializes. Basically, the percentage-based ebb and flow over time erodes your holdings on a net basis.



To give you an idea of how speculative the SKF is, consider the underlying index. Since the January opener, the S&amp;P Financial Select Sector gained nearly 4%. In sharp contrast, this bear fund dropped more than 14% of market value. That&rsquo;s a severe misalignment between the losses that should be printed versus what we actually see.



Still, the fundamental case for SKF centers on the lingering concerns related to the financial sector. As The Hill stated last month, the <a href="https://thehill.com/opinion/finance/4315718-the-regional-bank-crisis-is-not-over/">regional banking crisis is still not over</a>. Timed correctly, the SKF could be lucrative contrarian trade among inverse ETFs.



<h2>ProShares UltraShort Semiconductors (SSG)</h2>


<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2022/01/shutterstock_1917075950-300x169.png" alt="ETF Investment index funds concept with letter wooden blocks and lots of different currencies, ETFs to buy. Emerging markets ETFs"><div>Source: Eviart / Shutterstock.com</div></div>


When it comes to inverse ETFs that could blow up in your face, ProShares UltraShort Semiconductors (NYSEARCA:<a href="https://investorplace.com/stock-quotes/ssg-stock-quote/">SSG</a>) suffers from two clear disadvantages. First, the bear fund corresponds to two times the inverse of the daily performance of the Dow Jones U.S. Semiconductors index. As we just saw, leveraged ETFs can become discombobulated from their &ldquo;true&rdquo; correlations.



Second, the semiconductor space represents one of the hottest ecosystems of the year. With enterprises like Nvidia (NASDAQ:<a href="https://investorplace.com/stock-quotes/nvda-stock-quote/">NVDA</a>) storming higher due to the burgeoning development of artificial intelligence and machine learning, it&rsquo;s only the most intrepid of contrarians that would even consider betting against the sector. Then again, the audacious nature of the speculation could possibly yield dramatic returns.



Interestingly, the target semiconductor index peaked in the second half of November. Since then, the benchmark has slipped conspicuously. If traders anticipate that the index could continue its decline, the SSG may be enticing.



Keep in mind that in the trailing five sessions, SSG gained nearly 7%.



<h2>Direxion Daily S&amp;P 500 Bear 3X Shares (SPXS)</h2>


<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2019/07/etf-buy-sell-keyboard-300x169.jpg" alt="keyboard featuring etf on enter key. vangaurd etfs. Magnificent 7 Stocks"><div>Source: Shutterstock</div></div>


Dialing up the risk-reward profile to the maximum level, the Direxion Daily S&amp;P 500 Bear 3X Shares (NYSE:<a href="https://investorplace.com/stock-quotes/spxs-stock-quote/">SPXS</a>) should not be entered into lightly. If regular inverse ETFs require a quick-in, quick-out approach, you need to be that much more vigilant with SPXS. As the name of the fund suggests, the platform attempts to deliver the 3X inverse of the S&amp;P 500 index.



Another factor to consider is that per its <a href="https://money.usnews.com/funds/etfs/trading-inverse-equity/direxion-daily-s-p-500-bear-3x-etf/spxs">prospectus</a>, the SPXS under normal circumstances invests at least 80% of its net assets in swap agreements, futures contracts, short positions or other financial instruments. Therefore, the counterparty risk is extremely heightened with the Direxion Daily S&amp;P 500 Bear. Also, keep in mind that with an expense ratio of 1.08%, it&rsquo;s not cheap.



To give you an understanding of the dangers of triple leverage, the benchmark index gained 19% year-to-date. In sharp contrast, the SPXS cratered to the tune of 41%. Again, quick in, quick out.



Still, the benchmark index does look a little stretched. If the stars align, SPXS could be a big winner.



<h2>Direxion Daily FTSE China Bear 3X Shares (YANG)</h2>


<div><img width="300" height="169" src="https://investorplace.com/wp-content/uploads/2019/07/etfs1600july2019-300x169.jpg" alt='ETFs: A stock market ticker tape that reads "ETFs." representing international etfs'><div>Source: Shutterstock</div></div>


If we&rsquo;re going to be cynical with inverse ETFs, we might as well consider shorting global equities, particularly from competing nations. For that, we have the Direxion Daily FTSE China Bear 3X Shares (NYSEARCA:<a href="https://investorplace.com/stock-quotes/yang-stock-quote/">YANG</a>). According to its <a href="https://money.usnews.com/funds/etfs/trading-inverse-equity/direxion-daily-ftse-china-bear-3x-etf/yang">prospectus</a>, YANG seeks 300% of the opposite of the daily performance of the FTSE China 50 index.



Now, for some risk awareness. Under normal circumstances, YANG invests at least 80% of its net assets in swap agreements, futures contracts and other instruments that carry counterparty risk. Fundamentally, though, the case for YANG is appealing because of fading economic conditions in the world&rsquo;s second-largest economy. Per Foreign Affairs, a key negative catalyst stemmed from <a href="https://www.foreignaffairs.com/united-states/how-america-should-react-chinas-economic-slowdown#:~:text=China's%20slowdown%20is%20the%20result,localities'%20ability%20to%20issue%20debt.">overinvestment in property and infrastructure</a>.



Sure enough, YANG popped up about 34% since the start of the year. Further, as more questions rise regarding Chinese economic stability, the bear fund could continue its ascent. Still, with an expense ratio of 1.08% &ndash; the category average being 1.05% &ndash; caution is warranted.



<h2>ProShares UltraPro Short Russell 2000 (SRTY)</h2>


<div><img width="300" height="200" src="https://investorplace.com/wp-content/uploads/2019/05/mutual-funds-etfs-300x200.jpg" alt=""><div>Source: InvestorPlace unless otherwise noted</div></div>


Finally, closing out this list of inverse ETFs is the ProShares UltraPro Short Russell 2000 (NYSEARCA:<a href="https://investorplace.com/stock-quotes/srty-stock-quote/">SRTY</a>). According to its <a href="https://money.usnews.com/funds/etfs/trading-inverse-equity/proshares-ultrapro-short-russell2000/srty">prospectus</a>, the SRTY seeks daily investment results that correspond to three times the inverse of the daily performance of the Russell 2000 index. Because the underlying canvas targets small-capitalization companies, both big risks and big reward potential cover the market idea.



To be sure, those that decide to dive into SRTY will be taking on extreme dangers. Right now, the Russell 2000 is <a href="https://money.usnews.com/funds/etfs/trading-inverse-equity/proshares-ultrapro-short-russell2000/srty">up around 6%</a> since the January opener. On the other end of the aisle, the UltraPro Short ETF is down 26%. In other words, when you&rsquo;re trading 3X inverse ETFs and the underlying index moves marginally against your position, your portfolio could implode.



Still, the opposite could be true. For example, if the Fed decides to forego interest rate cuts and instead raises them to combat stubbornly high inflation, the equities sector could suffer badly. So, it really depends on your convictions.



On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article.&nbsp;The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com&nbsp;<a href="https://investorplace.com/corporate/investorplace-publishing-guidelines/" target="_blank">Publishing Guidelines</a>.
<div>A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Tweet him at @EnomotoMedia.</div><h3>More From InvestorPlace</h3>
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The post <a href="https://investorplace.com/2023/12/bear-market-bets-7-inverse-etfs-for-contrarian-investors/">Bear Market Bets: 7 Inverse ETFs for Contrarian Investors</a> appeared first on <a href="https://investorplace.com">InvestorPlace</a>.

Bear Market Bets: 7 Inverse ETFs for Contrarian Investors

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