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By Mike Paulenoff, www.MPTrader.com
All of the action in the SDS off of the March high appears to have taken the form of a "declining wedge" pattern, which attempted to break to the downside last Friday, but could not sustain the breakdown into new low ground. Instead, the price structure has clawed its way back above the lower wedge boundary line prior to what my work argues should be a "violent" upmove that propels the SDS to test the upper boundary line of the wedge pattern, now in the vicinity of 58.00/25. Should the SDS hurdle and sustain above 58.25, then the declining wedge pattern will be complete, and the price structure will confirm that it is in the midst of a potent recovery raly period that projects to 61.00-62.00. For the time beint, the SDS has more work to do, but already is giving initial indications that the March-April downleg is complete.
Mike Paulenoff is author of www.MPTrader.com, a real-time diary of his technical analysis & trade alerts on ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international markets, plus key ETF component stocks in sectors like technology, mining, and banking. Sign up for a Free 15-day Trial!
