Classic Bear ETFs Hit New 52-week lows (SKF, QID, DOG)

The ProShares UltraShort QQQ (ETF) (NYSE:QID) and ProShares Short Dow30 (ETF) (NYSE:DOG) both hit new 52-week lows today and the coveted ProShares UltraShort Financials (ETF) (NYSE:SKF) came within 16 cents of reaching a new bottom.  While the major indexes charge higher, the inverse bearish ETFs are touching new lows which is cause for speculation.

WHAT GOES UP, MUST COME DOWN
A lesson from the "Down Under" with Lucy Battersby  -- Wave patterns show a bear market is ready to roar
A sharemarket correction of more than 10 per cent could be looming in the post-crisis recovery, according to a technical comparison of the current market with the bear market recovery from the 1989 crash.

The similarities between the Australian All Ordinaries Index over the past three years and the All Ords from 1989 to 1993 are striking, says private trader and consultant Robert Brain, who is a director of the Australian Technical Analysts Association.

''Sometimes, by studying how things unfolded in the past, we can draw a good insight into what might unfold next time around,'' he told BusinessDay. ''If we study that bear market of 1989-1993, we can understand one possible scenario for how the last bear market might unfold.''

Technical analysis maps movements in the price of shares, indices, commodities or currencies and gives traders a theoretical framework to analyse whether prices are following a trend.

The theory removes sentiment and ''gut feelings'' from trading, and it can take years of study to become a technical analyst, or chartist as they used to be called.

Mr Brain's chart shows a 30 per cent drop over 65 weeks in the All Ords from an October 1989 peak compared with the 54 per cent decline in the All Ords which started in October 2007.

Both the 1989 and 2008 declines resemble a classic five-wave ''Elliott Wave'' pattern, Mr Brain said. An Elliott Wave is a technical analysis principle that identifies rhythmical patterns in market performance.  Keep Reading - Click Here>>

Weapons of choice for betting on a market correction to the downside, there are classic plays (links to Google Finance):