Fundamentally, losses in the technology sector have weighed on broader sentiment. The innovation-heavy Nasdaq Composite is down roughly 0.8% on Friday afternoon and is projecting to incur a loss of over 4% below parity for the week.
U.S. initial jobless claims increased by 10,000 to 243,000 in the week ending July 13. This figure was slightly above economists' projection of 230,000.
The ETF: Generally, retail investors have little recourse but to sit and wait for the volatility to fade away. However, those who want to take an active approach with their portfolio may consider the Direxion Daily S&P 500 Bear 1X Shares (SPDN). The SPDN is an inverse exchange-traded fund. Rather than rising in value when the underlying S&P 500 swings up, this ETF becomes profitable when the benchmark index falls.
One of the benefits associated with the Direxion inverse fund is ease of access: investors simply buy units of SPDN, just like they would buy shares of any publicly traded enterprise. However, the main area to watch is the length of exposure. Due to the compounding effect of inverse funds, SPDN is not appropriate for trading periods greater than one day.
The SPDN Chart: While the major indices have struggled this week, the opposite framework held true for the SPDN ETF. In the past five sessions, the inverse fund was on pace for a 3% gain. Below are some factors to consider:
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