So I bought SRS a couple of weeks ago at 116 and watched it move to 120 -- then steadily downward. Although I see RE (especially commercial) dropping going forward, I sold SRS last week at 105, figuring that SRS's present range is 90's-110's. I also fell for the belief that there will be a rally through the first week of January. (Still possible, of course.) I figured I would re-buy in the 90's. Of course, SRS is up since then.
I certainly expected volatility -- although once you actually see the losses it becomes a very different discipline. But now I'm wondering how I should play this going forward.
First, I have no clue what SRS inversely tracks; e.g., were at $112.50 and $DJUSRE and IYR are both at support levels. That's OK, we'll all band together and get our money out of ProShares at a later date.
Second, If you see IYR "DAILY" close below $64.70ish with above average volume take what ever money you got and buy it to ride it until it bottoms out. Or be cautious and WAIT for it to bottom, then rally to retest the 50 day M/A and then buy it to ride it down to the new bottom.
Also, don't be afraid of buying URE long if she bounces off 64.70 support, then "turn coat" at the 50 Day M/A and buy SRS long.
Every time my Buddie Bernanke injects cash or adjusts interest rates the fundamentals change against us SRS Longs; because, real estate is perceived as somewhat of an inflation hedge.