To elaborate on my previous comment re trading the XJO, I no...

To elaborate on my previous comment re trading the XJO, I no longer go long the index during a bull market, mainly because there is more upside gain, and volatility with smaller cap ASX stocks. My largest mistake during the last trading year was trying to short the XJO with BBOZ ETF while the longer-term BBOZ trend was down. BBOZ is currently a very bearish looking chart. Hence for me, no going short or long the index via BEAR or GEAR during a bull market.

However, I am open to shorting the XJO longer-term when the next bear market arrives. The BBOZ ETF is one option I may again use by entering once price trades above a rising ~ 130-day moving average. However, barring a sudden market crash, we are some time off that yet.

The other overseas ETF options are the more aggressive daily S&P 500 Bear 3x Shares (SPXS). The S&P 500 U.S. index goes down 1%, and SPXS ETF goes up ~ 3%. Of course an Australian trader needs a broker who also offers U.S. trading. My St George Directshares offers overseas trading. Also, IG, NAB, etc.

Perhaps the more profitable but potentially also volatile option is to determine the weakest sectors to short, then select the weakest stocks in those sectors. The standout weak sector at the start of the 2008 GFC was banking in the U.S. Things got so bad that traditional short selling (borrowing stocks from a broker, selling them, and buying back later to return to the broker) was banned for a while. I'm not sure if short CFD trades were also restricted during the last GFC bear market. But Assad Tannous (Melbourne) once told me that his brokerage firm made large profits by shorting the mining sector during the GFC.

Some of you will be still intraday trading the XJO index when the next bear market arrives. But does this make sense given that the large down days within a bear market are unpredictable? It is comparable to holding a strong up-trend stock like A2M where the big 4 or 6% up days come without warning. It is only those traders holding longer-term that benefit from these unusually sporadic unusually large percentage increase days.

http://etfdb.com/type/equity/all/inverse/