There it is. The reaction to six straight days of losses.

After reaching oversold levels, the Dow bounced back with gains around 0.60%. Make note that this is off the day’s highs and 10% off average volume.

Volume fell as stocks rallied after being oversold.

What does it mean? Definite weakness still exists in the markets.

This suggests to me that we most likely won’t see anymore big gains before the market again resumes its slide. Instead, we will probably close out the week within 0.5% of the close today (barring any unexpected news).

As far as shorting the market goes, I think that picking up a short ETF might not be a bad idea. Check the futures and if the market starts out strong tomorrow, use it as an opportunity to get a decent price.

Also, I would go with an ETF based on the Dow 30 as it looks to have the most to lose. DOG is the 1x, DXD is the 2x and SDOW gives you 3x the inverse of the Dow 30. Here’s a chart of SDOW:

SDOW is up over 10% since June 1st