This week is shaping up to be another ugly and painful week in the market.  The major indexes were all down five to six percent or more on the day.  But that market pain has largely been avoided for those in the newly debuted Direxion triple leverage bear funds.  Take a look at the weekly chart for two of the stellar performers this week.

FAZ is up over 130% in just 5 days, and BGZ is up just half that mark at a still incredible 63% return!  For more information on these new 3X leveraged ETF’s, check out the Direxion website.  Be sure to check out the prospectus as these new ultra leveraged ETF’s carry significant risks not associated with other ETF’s.  Also be sure to carefully design any portfolio using such leveraged bear instruments.  Sooner or later, the blood on Wall Street may taper off and undergo a violent reversal.  Getting into these leveraged bear funds at the wrong time could potentially destroy your portfolio even more than the losses on your long positions.

My personal preferred method of using these leveraged bear funds is to use them as a balance – part of a combination with other long positions.  Check out Trading strategy – hidden jewel in the shorts for more information.  But as always, do so at your own risk!