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The one salient feature of the enclosed hourly chart of the ProShares UltraShort SPY (NYSE: SDS) is the series of lower highs and lower lows, which represents a powerful downtrend. However, after this morning’s new low at 51.47 and upside reversal to a high of 54.17, I have to consider that “something” ended on the downside and that a period of recovery rally already has started. If that proves to be the case, then the SDS will NOT break this morning’s low prior to trading higher – above 54.17 to at least 55.37 – and likely on the way to the 57.00 area “to probe serious resistance.” Of course, right now the SDS is consolidating around the mid-point of today’s range – setting up a very important directional move later this afternoon.
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!
