This is an extraordinary chart picture from the high in the UltraShort S&P 500 ProShares (NYSE: SDS) at 118.24 (3/06/09) into this week's low at 35.50. The most salient feature is the fact that RSI momentum hit its most oversold level on 8/04 at 45.37, and thereafter, each successive lower price low has been accompanied by a higher low in the RSI. Each one of the divergences produced a potent rally, but none of the rallies has been able to hurdle its prior peak. This Mon.'s low at 35.50 represents the fourth pivot low AND the 3rd major positive divergence, since Aug. 4th. From the look of today's action, the SDS likely has started another recovery rally. The prior recovery rallies in the SDS off of the 8/28, 9/23, 10/21 lows has averaged 4.58 pts, which would argue for additional strength in the SDS off of 35.50 to a target of 40.10, or about 8% above current prices. With that said, let's notice that the Aug. -Nov. resistance line (across the recent rally peaks) crosses the price axis in the 40.55 area today, which will intersect closer to 40.00 in the next couple of days-- perhaps just as the SDS satisfies its recovery rally objective. Finally, if the upmove in the SDS inflicts damage to the 9 month downtrend, it will have to hurdle 41.90 to trigger an exodus from the major equity market ETFs.