The short term model is very very close to overbought. It is close enough that I am going to suggest an inverse ETF trade. I suggest buying SDS the double inverse fund of the S&P 500. This will rise as the markets fall. For anyone trading this, for a risk management standpoint I would use a stop loss of 62.50. The current price is 64.19 and that is the price I will use for tracking the trade.
I had suggesting exiting the previous SSO trade already even though the short-term was not extremely overbought. I would definitely exit it now if you haven't already.
As an aside, I think ENER would be a good put option purchase right now. Also, I have puts on TEX which looks to be forming a triangle pattern that I would expect to break to the downside.
Trade Recommendation: Buy SDS with a market order today, 8/28/2008.
Pete
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