Lately, there has been some chatter about a dollar rally; and Alex mentioned that he had sold his gold and was now looking to short foreign currencies. SInce I agree, I went looking for an easy way to short the precious metals and oil. Since I don’t know a thing about futures, I pulled up my ETFs and settled on a couple. For oil, I went with DUG, which is the inverse of the oil stock index, a nice clean way of shorting the big oil producers. For the precious metals I found ZSL, a ProShare Ultra ETF that is the inverse of the price of silver (which would be SLV for a long silver trade).

This ETF is priced on the commodity, and in this case, a trader who is long the ETF is short the price of silver (not the mining stocks). There’s considerable concern that these commodity based ETFs are unsound and not accurate. They have had problems, and don’t work well for long-term holding; however, I find the ones like ZSL that trade over a million shares a day, easy to buy and sell with decent spreads and just fine for short-term trading. A word of explanation about my indicators. I prefer short-term trading, so I use a 2-day RSI, coupled with a 2-day FI and a 3,10,16 MACD, and look to hold for 2-4 days. I find this version of MACD very responsive and very good at showing profitable divergences on the daily charts.